Aardvark Therapeutics faces class action after 56% stock plunge

Aardvark Therapeutics faces a securities class action alleging it misled investors about the safety of lead drug candidate ARD-101, after the stock plunged 56.2 percent.

"We're investigating the suit's allegations, including that Aardvark allegedly misled investors about ARD-101's development, its safety and efficacy," Reed Kathrein, the Hagens Berman partner leading the firm's investigation, said.

The complaint, filed by Hagens Berman Sobol Shapiro LLP, covers investors who bought Aardvark common stock in the company's Feb. 13, 2025 initial public offering or acquired securities between that date and May 14, 2026. The suit alleges the offering documents failed to disclose that ARD-101 was significantly less safe than represented, including unexpected reversible cardiac observations such as QRS prolongation at above-target doses. Robbins LLP has filed a separate class action over the same disclosures.

Aardvark announced Feb. 27, 2026 it was voluntarily pausing its Phase 3 HERO trial for hyperphagia in Prader-Willi Syndrome after finding "reversible cardiac observations at above target therapeutic doses" in a healthy volunteer study. The stock fell $7.02, or 56.2 percent, to close at $5.47 on March 2. On May 14, the FDA placed a full clinical hold on the investigational new drug application for ARD-101, halting the HERO trial and open-label extension. Shares fell another $2.16, or 32.1 percent, to $4.57 on May 15.

Investors who suffered losses have until Oct. 13, 2026 to seek appointment as lead plaintiff. Hagens Berman, which has secured more than $2.9 billion in this area of law, also invites whistleblowers with non-public information to contact the firm under the SEC whistleblower program, which offers rewards up to 30 percent of successful recoveries.

The lawsuit adds legal and financial pressure on a clinical-stage biopharmaceutical company whose sole lead candidate is now under a full FDA hold, leaving its regulatory path uncertain. Investors will watch for any FDA response to Aardvark's data review and whether additional law firms file similar claims before the October lead plaintiff deadline.

This article is for informational purposes only and does not constitute investment advice.