A federal court has dismissed a proposed class action lawsuit filed by investors against Spero Therapeutics, Inc., concerning statements made about a clinical trial and the potential FDA approval of tebipenem pivoxil hydrobromide. The lawsuit, initiated after the FDA provided negative feedback in 2022 regarding the antibacterial pill intended for treating complicated urinary tract infections (cUTIs), alleged that Spero and its top leaders acted with fraudulent intent. The U.S. District Court for the Eastern District of New York ruled that the investors did not adequately substantiate this claim.
Background of the Lawsuit
The investors' lawsuit was triggered by the FDA's unfavorable response to tebipenem pivoxil hydrobromide, an investigational drug aimed at addressing cUTIs. Spero Therapeutics had announced on March 31, 2022, that the FDA had indicated deficiencies in the application for approval. This announcement led to a decline in the company's stock price and prompted the lawsuit, with investors claiming they were misled by Spero's earlier optimistic statements.
Court's Decision
The court's decision hinged on the investors' inability to sufficiently prove that Spero Therapeutics and its leadership acted with the requisite intent for securities fraud. The ruling underscores the challenges plaintiffs face in demonstrating fraudulent intent in securities litigation, particularly when dealing with complex scientific and regulatory matters. The court's dismissal of the case provides some relief for Spero Therapeutics, allowing the company to focus on its research and development efforts without the distraction of ongoing litigation.
