Aardvark Therapeutics, Inc. Class Action Lawsuit - AARD

The filed complaint alleges that Aardvark Therapeutics, Inc made materially false and/or misleading statements and/or failed to disclose that: (i) ARD-101 was less safe than defendants had led investors to believe; (ii) accordingly, ARD-101’s clinical, regulatory, and commercial prospects were overstated; and (iii) as a result, the offering documents were materially false and/or misleading and failed to state information required to be stated therein.

In order to be eligible to join the AARD class action lawsuit, you must have incurred a loss on shares of Aardvark Therapeutics, Inc. purchased during the class period listed above.

If you suffered a loss in Aardvark Therapeutics, Inc. during the relevant time frame, you have until October 13, 2026 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.

Key Facts About Aardvark Therapeutics, Inc. (NASDAQ: AARD)

●       The Allegation: The complaint alleges Aardvark overstated the safety, regulatory prospects, and commercial outlook of ARD-101, its lead drug candidate for hyperphagia associated with Prader-Willi Syndrome. Defendants allegedly told investors ARD-101 was "well-tolerated," "99% restricted to the gut," and unlikely to cause systemic or cardiac toxicity.

●       The Stock Drop: AARD fell $7.02 per share, or 56.2%, to close at $5.47 per share on March 2, 2026, after Aardvark announced a voluntary pause of the Phase 3 HERO trial due to reversible cardiac observations; AARD later fell $2.16 per share, or 32.1%, to close at $4.57 per share on May 15, 2026, after the FDA placed a full clinical hold on ARD-101.

●       Class Period & Defendants: The class period runs from February 13, 2025 through May 14, 2026, inclusive. Defendants include Aardvark Therapeutics, Inc., Tien-Li Lee, M.D. (Chief Executive Officer and Director), Nelson Sun (Chief Financial Officer, and Chief Operating Officer since February 9, 2026), Bryan Jones, Ph.D. (Chief Operating Officer until February 9, 2026), Jeffrey Chi, Ph.D., CFA (Director), Roy D. Baynes, M.D., Ph.D. (Director), Susan E. Graf, RPh, MBA (Director), and Victor Tong, Jr. (Director).

●       Lead Plaintiff Deadline: October 13, 2026. Investors who wish to seek appointment as lead plaintiff must apply by the deadline. 

Introduction

A securities class action lawsuit has been filed against Aardvark Therapeutics, Inc. in the Southern District of California. The case concerns Aardvark's February 13, 2025 IPO and later purchases through May 14, 2026.

The complaint alleges defendants made materially false and misleading statements about ARD-101's safety profile. Investors were told the drug was well-tolerated and largely gut-restricted, but later disclosures described cardiac observations.

Aardvark shares fell sharply after the company paused the Phase 3 HERO trial. The stock fell again after the FDA placed a full clinical hold on ARD-101.

Company Profile

Aardvark Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing small-molecule therapies designed to inhibit hunger and treat metabolic diseases. At the time of its IPO, its lead product candidate was ARD-101, an oral gut-restricted small-molecule agonist being evaluated in the Phase 3 HERO trial for hyperphagia associated with Prader-Willi Syndrome.

Class Period

February 13, 2025 – May 14, 2026

Investors who purchased Aardvark Therapeutics, Inc. securities during the class period might be eligible to join the Aardvark Therapeutics, Inc. securities class action lawsuit.

Allegations

The complaint brings Securities Act and Exchange Act claims tied to Aardvark's IPO and subsequent public statements during the trading period. According to the lawsuit, Aardvark sold 5,888,000 shares of common stock in its February 13, 2025 IPO at $16.00 per share, raising proceeds of $87,613,440 after underwriting discounts and commissions. The Registration Statement was filed on Form S-1 on January 23, 2025, declared effective on February 12, 2025, and followed by a Form 424B4 Prospectus on February 13, 2025.

The Offering Documents allegedly represented that ARD-101 had limited systemic absorption, was approximately 99% restricted to the gut, had minimal systemic exposure, and was well-tolerated in clinical trials to date. They also stated that ARD-101 resulted in no serious adverse events, no renal or hepatic safety limitations, and no evidence of immunosuppression. The complaint alleges these statements omitted material facts because ARD-101 was less safe than defendants led investors to believe, which overstated the drug's clinical, regulatory, and commercial prospects.

After the IPO, Aardvark and its executives allegedly continued to reinforce the same safety narrative. The company's March 31, 2025 Form 10-K stated that limited systemic absorption reduced the potential for systemic toxicity. In May 2025, Defendant Tien-Li Lee said Aardvark had dosed more than 70 patients with ARD-101 and had not seen anything more than a grade 2 adverse event, while Defendant Bryan Jones described ARD-101 as having a "Very, very clean" safety profile and said the chance of side effects was "very, very low" because the drug did not expose other tissues.

The complaint further alleges that defendants repeated these claims at investor conferences and in SEC filings through late 2025. On September 8, 2025, Defendant Lee stated that the company's target 800 mg twice-daily dose was "far below the toxic limit" of ARD-101 and that lack of systemic exposure diminished concern for "cardiac toxins." Plaintiffs allege defendants knew or recklessly disregarded that ARD-101 was less safe than they had led investors to believe and that its clinical, regulatory, and commercial prospects were overstated.

The Truth Emerges

The alleged truth began to emerge when Aardvark issued a February 27, 2026 press release announcing that it was voluntarily pausing enrollment and dosing in the Phase 3 HERO trial. The company attributed the pause to "reversible cardiac observations at above target therapeutic doses" found during routine safety monitoring in a healthy volunteer study. Aardvark also said it no longer anticipated announcing topline data from the HERO trial in the third quarter of 2026.

Analysts responded by reducing price targets and citing increased uncertainty around ARD-101. Morgan Stanley Research downgraded Aardvark from Overweight to Equal-weight and cut its price target from $29 to $7, citing uncertainty around the path forward for ARD-101. BTIG reduced its target from $26 to $9, citing increased risk around the HERO trial, while Bank of America Securities reduced its target from $25 to $21.

The truth continued to emerge on May 14, 2026, when Aardvark announced that the U.S. Food and Drug Administration had placed a full clinical hold on its investigational new drug application for ARD-101. The clinical hold applied to all ongoing studies under the IND, including the Phase 3 HERO trial and the Phase 3 open-label extension trial. This disclosure allegedly contradicted earlier statements suggesting that Aardvark had a clear path forward and that ARD-101's safety profile remained encouraging.

Market Reaction

Aardvark's stock fell $7.02 per share, or 56.2%, to close at $5.47 per share on March 2, 2026, after the company announced the voluntary pause of the HERO trial. That closing price was approximately 65.8% below the $16.00 IPO offering price, reflecting the market's reaction to the first major safety-related disclosure.

After the FDA full clinical hold was announced, AARD fell another $2.16 per share, or 32.1%, to close at $4.57 per share on May 15, 2026. That closing price was approximately 71.4% below the $16.00 offering price. Analysts again reduced or withdrew price targets, with Morgan Stanley cutting its target from $7 to $3, Bank of America Global Research cutting its target from $18 to $4, and BTIG downgrading the stock to Neutral and rescinding its $9 target.

Next Steps

●       Lead Plaintiff Deadline: October 13, 2026

●       After the lead plaintiff deadline, the Court will consider any lead plaintiff motions.

●       Defendants may file a motion to dismiss.

●       If the case proceeds, the Court may later consider class certification.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. Prior results do not guarantee similar outcomes.