On September 30, 2019, Cabaletta filed a registration statement on Form S-1 with the SEC in connection with the IPO, which, after amendment, was declared effective by the SEC on October 24, 2019 (the “Registration Statement”). On October 25, 2019, Cabaletta filed a prospectus on Form 424B4 with the SEC in connection with the IPO, which incorporated and formed part of the Registration Statement (the “Prospectus” and, together with the Registration Statement, the “Offering Documents”). Pursuant to the Offering Documents, Cabaletta conducted the IPO, selling approximately 6.8 million shares of common stock priced at $11.00 per share, for approximate proceeds of $69.5 million to the Company after applicable underwriting discounts and commissions, and before expenses. The complaint alleges that, the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) top-line data of the Phase 1 Clinical Trial indicated that DSG3-CAART had, among other things, worsened certain participants’ disease activity scores and necessitated additional systemic medication to improve disease activity after DSG3-CAART infusion; (ii) accordingly, DSG3-CAART was not as effective as the Company had represented to investors; (iii) therefore, the Company had overstated DSG3-CAART’s clinical and/or commercial prospects; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times. On December 14, 2021, Cabaletta issued a press release “report[ing] top-line data on biologic activity from the two lowest dose cohorts in the DesCAARTes Phase 1 clinical trial of DSG3-CAART for the treatment of patients with mucosal Pemphigus Vulgaris (mPV).” Among other results, Cabaletta reported that two cohort participants had “disease activity scores that worsened . . . after DSG3-CAART infusion” and thus “reduced or discontinued selected systemic therapies prior to DSG3-CAART infusion, as required by the protocol”, while another participant “subsequently received systemic medication to improve disease activity after DSG3-CAART infusion.” On this news, Cabaletta’s stock price fell $9.15 per share, or 73.14%, to close at $3.36 per share on December 14, 2021. As of the time this Complaint was filed, the price of Cabaletta common stock continues to trade below the $11.00 per share Offering price, damaging investors.
The alleged class includes : All persons and entities other than Defendants that purchased or otherwise acquired: (a) Cabaletta common stock pursuant and/or traceable to the Offering Documents issued in connection with the Company’s initial public offering conducted on or about October 24, 2019; and/or (b) Cabaletta securities between October 24, 2019 and December 13, 2021, both dates inclusive.[IPO]
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