• In October 2020, YmAbs announced a plan to commercialize Omburtamab but failed to get FDA approval for it.
• Despite lacking sufficient evidence and not meeting the FDA’s requirements, Y-mAbs submitted an application to commercialize Omburtamab. 
• In October 2022, the FDA’s committee unanimously voted against granting the license for Omburtamab. 
• The market reacted sharply to the news, with Y-mAbs stock plunging to a historic low of $3.15 by the end of October 2022.
• Following the sudden stock price drop, in January 2023, shareholders sued the company.
• Y-mAbs has agreed to a $19.65 million settlement with shareholders to resolve the lawsuit. Affected investors can now file a claim to receive their payment.

Overview

Y-mAbs stock peaked at $54.1 in late 2020, fueled by high hopes for its cancer treatment, Omburtamab. However, the FDA’s 2020 Refusal to File and subsequent Complete Response Letter citing missing efficacy data undermined its progress, leading to a 71.65% stock drop by October 2022. After that, in January 2023, investors filed a class-action lawsuit, claiming that the company misled them about Omburtamab’s approval chances. Recently, Y-mAbs ultimately reached a $19.65 million settlement with the affected shareholders to resolve this scandal. 

Omburtamab - the Achilles’ Heel for Y-mAbs Ambitions

Y-mAbs Therapeutics, founded in 2015, quickly positioned itself as a promising player in the oncology field, focusing on developing novel antibody-based therapies.

Its flagship drug, Omburtamab, was designed to target central nervous system and leptomeningeal metastases in pediatric neuroblastoma patients. 

Y-mAbs aimed to commercialize Omburtamab, promoting it as a breakthrough treatment for children suffering from one of the deadliest forms of cancer.

“We are excited to share these results that significantly broaden the potential reach of Omburtamab, which would be addressing a clear unmet medical need. The results pave the way for our multicenter phase 2 study in DIPG later this year, where we expect to give up to three repeated doses of Omburtamab,” stated Thomas Gad, founder, Chairman and President.

After its IPO, Y-mAbs stock surged 58% in 2020, peaking at $54 as investors expressed strong confidence in its future plans.

Then, on October 3, 2022, Y-mAbs claimed that the research data for Omburtamab trials was satisfactory. They remained confident that they would meet the additional data requirements requested by the FDA.

“The disease burden these patients and their families are facing represents a significant unmet medical need, which we hope to be able to address with OMBLASTYS after our PDUFA date on November 30, 2022.”

However, despite high claims from Gad, Y-mAbs couldn’t convince the FDA to start commercial production of Omburtmab.

The FDA Shatters the Omburtamab Venture

The FDA dashed any remaining hopes for Omburtamab's viability when it issued a Complete Response Letter.

In response, Thomas Gad said: “We are disappointed by the CRL but not surprised based on the outcome of the ODAC meeting on October 28. We want to express our gratitude to all the patients, their families, and investigators who have participated in our clinical trials and advocated for the advancement of Omburtamab.”

The fallout from Omburtamab became even more devastating with the FDA's detailed response. Y-mAbs failed to address the FDA’s concerns over the lack of viability and efficacy in the patient trial data, which were required before submitting the BLA in March 2022. This oversight complicated the situation further as the company neglected to meet the FDA's demands for more diversified data and larger testing volumes.

After that, on October 5, 2020, Y-mAbs provided an update on Omburtamab, downplaying any significant obstacles to receiving the BLA. 

“We will request a Type A meeting with the FDA as soon as possible, and plan to work in close dialog with the Agency to amend the BLA with the goal of resubmitting the BLA before the end of 2020” stated the press release from Y-mAbs.

However, the company couldn’t convince the FDA through a series of meetings and resubmissions.

Investors’ confidence in Y-mAbs suffered a serious blow in October 2022 when the FDA, after months of review, ultimately rejected the company's Biologics License Application for Omburtamab.

This rejection revealed that the FDA had raised substantial concerns regarding the drug’s efficacy, particularly due to gaps in the data used to support its intended application in treating CNS/leptomeningeal metastases.

The day after the FDA revelations, Y-mAbs stock dropped 19.16%, eventually hitting a historic low of $3.10.

After that, on January 18, 2023, investors sued Y-mAbs for misleading about the FDA approval.

Resolving The Case

To resolve the lawsuit from investors, Y-mAbs has agreed to a cash settlement of $19.65 million. If you invested in Y-mAbs, you may be eligible to claim a portion of this settlement to recover your losses.

After the setback with Omburtamab, Y-mAbs shifted its focus to "Danyelza," an FDA-approved drug as of 2023, aiming to stabilize operations. The company implemented a restructuring plan, cutting expenses by 28% and its salesforce by 35%, while projecting $60–65 million in net revenue from Danyelza sales. While these efforts improved its financial standing, the recovery relied more on cost-cutting than significant revenue growth. The stock, however, never recovered to its 2020 peak of $54 and, by November 2024, had fallen nearly 80%, trading at just $11.

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