Shares in Mesoblast Limited (ASX: MSB) were once the talk of the ASX, but they've been plummeting recently.
The Mesoblast share price has fallen 11.5% since the company's last announcement on 30 April.
In the April update, Mesoblast released its quarterly results and the results from those aged under 65 involved in its COVID-19 acute respiratory distress syndrome trial.
But it's what might not have been released that could have investors worried.
Class action lawsuits against Mesoblast
Last week, the Australian Financial Review (AFR) reported that its attempts to get information from Mesoblast about participants of the trial aged over 65 had been unsuccessful.
It's likely the company's silence is not doing much to soothe anxious investors. Particularly, as Mesoblast is no stranger to failing to disclose important information on its drug Remestemcel-L.
As the Motley Fool touched on in October last year, Mesoblast is facing multiple class-action lawsuits in the US. It has been accused of making false or misleading statements to investors and failing to disclose adverse facts about Remestemcel-L.
In addition, an Australian law firm is preparing to engage in a class-action claim against Mesoblast, according to the AFR. The firm states Mesoblast engaged in misleading or deceptive conduct to investors and breaches of disclosure when it promoted Remestemcel-L's prospects.
The Australian law firm, Phi Finney McDonald, is alleging that Mesoblast misrepresented Remestemcel-L's effectiveness and potential benefits or the significance of trial results. It also alleges Mesoblast failed to disclose flaws in study design and statistics to the market.
Phi Finney McDonald's director Tim Finney was quoted by the AFR as saying:
In terms of the potential application for COVID induced ARDS – we intend to allege Mesoblast made claims regarding the success of trials that did not compare apples to apples in terms of clinical outcomes.
We're yet to hear anything more from Mesoblast, nor anything out of the courts involved in the class actions against Mesoblast.
Mesoblast share price snapshot
The Mesoblast share price has performed poorly on the ASX of late and is down 24% year to date. It's also fallen 48% over the last 12 months.
The company has a market capitalisation of around $1.1 billion, with approximately 648 million shares outstanding.
