Analyst Summary
- Allarity Therapeutics reached a final settlement with the SEC regarding past disclosures concerning interactions with the FDA related to its Dovitinib NDA submitted in 2021.
- The settlement confirms the agreement in principle announced on January 30, 2025, and involves Allarity consenting to a cease-and-desist order without admitting or denying the SEC’s findings.
- The settlement resolves the SEC’s investigation with findings of violations of non-scienter-based provisions under Sections 17(a)(2) and (3) of the Securities Act of 1933, as well as Section 13(a) of the Securities Exchange Act of 1934 and related rules.
- Allarity has agreed to pay a one-time civil penalty of $2.5 million as part of the settlement and will continue to cooperate with the SEC in any related litigation.
- The company’s cash position is expected to support operations into 2026, and the $2.5 million penalty does not affect its financial outlook or ability to execute its Phase 2 program in advanced ovarian cancer, initiate the Phase 2 trial of stenoparib in combination with temozolomide for recurrent small cell lung cancer, or proceed with its share repurchase plan.
- The company is now focusing on advancing its novel PARP/Wnt inhibitor, stenoparib, through its clinical development plans.
Potential Implications
Company Performance
- The resolution of legal matters allows Allarity to fully focus on its clinical development programs, particularly stenoparib.
- The company’s financial outlook remains unaffected by the settlement, with sufficient cash to support operations into 2026 and continue planned clinical trials and share repurchase program.
Stock Price
- The settlement could positively impact the stock price by removing uncertainty related to the SEC investigation.
- Focus on clinical development and potential positive trial results for stenoparib could drive stock appreciation.