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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowA biopharmaceutical company has agreed to settle with the Indiana Public Retirement System and a class of investors after the company was accused of making false statements regarding the safety of one of its drugs, leading investors to purchase stocks they otherwise would not have.
The proposed $69 million settlement resolves claims that ChemoCentryx Inc., along with its former president and CEO, repeatedly made false representations about the design and safety of the company’s vasculitis drug avacopan, and its communications with the U.S. Food and Drug Administration. Avacopan has the brand name Tavneos.
“This outcome is the result of the diligent investigation and advocacy by the Indiana Public Retirement System and our counsel, Bernstein Litowitz Berger & Grossmann LLP,” said an INPRS spokesperson in a written statement. “We believe this result not only delivers substantial value to affected investors but also advances public safety.”
ChemoCentryx, which is now owned by California-based Amgen, denies the allegations.
“We continue to believe that the claims in this case are without merit and the settlement includes no admission of liability or wrongdoing,” said an Amgen spokesperson in a written statement to The Indiana Lawyer on Tuesday.
The lawsuit started in 2021, shortly after the FDA published a report questioning the interpretability of data used to support ChemoCentryx’s drug avacopan.
In 2019, ChemoCentryx and its former president announced that a study the company completed showed results for the drug that “exceeded” their expectations.
“With today’s data it is clear that the time of making patients sick with steroid therapy in an attempt to make their acute vasculitis better may at last be over,” the company’s former president, Thomas Schall, said in a public statement in 2024.
After news of the study, ChemoCentryx stock soared, according to court documents.
But following the release of the FDA’s report, the stock plummeted.
Over one day, the stock dropped by 45%, down from its May 3, 2021, closing price of $48.82 to a May 4, 2021, close of $26.63 per share, according to court documents.
“This represents a one-day loss of approximately $1.5 billion in market capitalization,” the complaint stated.
On May 5, 2021, attorneys for Block & Leviton LLP sued ChemoCentryx on behalf of one investor for damages in the Northern District of California, but they requested the court grant a class of similarly situated plaintiffs.
Last year, a federal judge granted ChemoCentryx’s request to dismiss the case.
But after the Indiana Public Retirement System, which is the lead class representative, appealed the decision, the parties agreed to settle.
A judge preliminarily approved the settlement in June, but the court will formally decide on the matter on Oct. 22, 2026.
Eligible class members — those who purchased or acquired the common stock of ChemoCentryx from Nov. 26, 2019, through May 6, 2021 — must submit a claim form to be included in the settlement by Oct. 1.
The case is Jonnie Homyk v. ChemoCentryx, Inc., and Thomas J. Schall, 4:21-cv-03343-JST.
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