Northern District Of California Dismisses Putative Class Action Against Biopharmaceutical Company With Prejudice

On March 3, 2026, Judge Richard Seeborg of the United States District Court for the Northern District of California granted a motion to dismiss a proposed class action complaint (the “Amended Complaint”) alleging that a biopharmaceutical company (the “Company”) and certain corporate officers violated Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”). In re BioAge Labs, Inc. Sec. Litig., No. 25-cv-00196 (N.D. Cal. Mar. 3, 2026). After dismissal of the original complaint (the “Original Complaint”) in October 2025—which we covered here—plaintiff amended the complaint to include additional alleged statements they argued were misleading even under the Court’s earlier decision. The Court dismissed the Amended Complaint with prejudice.

In 2024, the Company, which develops products to address metabolic disease, was conducting phased clinical trials of its lead product candidate, a weight-loss drug. Approximately two months after the phase two trial began, the Company went public. The Company’s IPO offering materials allegedly acknowledged that the risk of trial failure was high and that the materialization of “severe, unexpected” risks or low efficacy might lead the Company to abandon the trial. Nine weeks after the IPO, the Company discontinued its trial because a handful of participants allegedly developed transaminitis—a condition characterized by elevated liver enzymes in the blood that is allegedly a common, non-serious side effect of weight-loss drugs. Plaintiff claimed that (1) defendants’ offering materials created the false impression that transaminitis did not pose a substantial risk to the clinical trial because they allegedly only discussed the risk of “unexpected, atypical, or more severe” side effects, and (2) the offering materials’ hypothetical language about side effects—i.e., using qualifiers like “if,” “may,” or “could”—created an impression that transaminitis had not already presented in participants.

The Court rejected plaintiff’s first theory based on the risks posed to the trial by transaminitis because it relied on the impermissible negative inference that defendants’ choice to acknowledge that unexpected or severe risks to the trial somehow implied that more common, less serious side effects posed no risk to the trial. The Court found that plaintiff’s inclusion of new statements from the offering documents regarding the Company’s goal of improving “tolerability” of weight loss drugs and the occurrence of a mild side effect that had occurred in a patient at the time of the IPO did not change the analysis. The Court determined that a reasonable investor would still understand that defendants were concerned about—not tolerant of—the impact of all side effects during the trial.

The Court then rejected plaintiff’s second theory based on the allegedly conditional nature of the Company’s risk disclosures. The Court noted that defendants’ risk disclosures explicitly discussed the risks to the trial if “serious,” “atypical,” and “more severe than the known” side effects occurred. And, as the Court observed, plaintiff contended throughout its Amended Complaint that transaminitis was a common or mild side effect of weight-loss drugs. As such, the hypothetical language addressing more serious side effects could not apply to the risk of transaminitis. The Court further held that plaintiff had not plausibly alleged that transaminitis had manifested among the trial’s participants at the time of the IPO.

Finding that plaintiff failed to cure the Original Complaint’s defects in its Amended Complaint, the Court dismissed the action with prejudice.