Inhibikase Therapeutics

Kurta Law is investigating brokers who recommended that their clients purchase shares of Inhibikase Therapeutics. This investment came with substantial risks that made it unsuitable for many investors. These risks appear in the prospectus, the SEC filing that companies use to disclose their business strategy and related risks prior to offering the securities for sale. Unsuitable investments violate FINRA Rule 2111 and Regulation Best Interest, and investors who incur losses may be able to recover via FINRA arbitration.

If your broker recommended that you invest in Inhibikase Therapeutics, you may have a claim against the firm through FINRA arbitration.  FINRA arbitration offers a quicker and cheaper remedy for investors than suing in civil court. Contact (877) 600-0098 or email info@kurtalawfirm.com to speak to a securities attorney for free today.

What is Inhibikase Therapeutics?

According to its website, Inhibikase Therapeutics is biotechnology company that focuses on the development of drugs capable of reversing the effects of neurodegenerative diseases.”

At the time of the prospectus filing, Inhibikase Therapeutics was working on developing c-Abl kinase inhibitor products that it claimed were effective in pre-clinical models at halting the progression of Parkinson’s Disease. Investors should note that the firm’s products had not yet proven effective in humans at the time of the stock offering, while showing some level of toxicity in animals test subjects.

Investors should also know that Inhibikase Therapeutics registered an emerging growth company, meaning that it can make limited disclosures in its prospectus. Less information generally means more risk.

Inhibikase Therapeutics Stock

Inhibikase Therapeutics (IKT) investments involve a high degree of risk, according to the company’s prospectus. On December 21, 2020, the company’s stock closed at $58.80 per share, and at the close of April 1, 2024, the stock traded at $2.15 per share. This massive drop in value was not surprising, given the risks clearly disclosed in the company’s prospectus.

Risks Associated With Inhibikase Therapeutics Investments

Brokerage firms that approve an investment are required to understand the risks associated with an investment. Furthermore, brokers must accurately represent the risks associated with certain investments.

The prospectus states at the beginning of the “Risk Factors” section: “We have incurred net losses since our inception, including net losses of $5,722,983 and $2,152,453 for the years ended December 31, 2019 and 2018, respectively, and $1,639,908 for the nine months ended September 30, 2020. As of September 30, 2020, we had an accumulated deficit of $13,823,638.”

Inhibikase had yet to show that it was capable of successfully developing drugs that could be taken to market, with such development costing extraordinary amounts of capital. Additionally, as the company admits, drug development for neurodegenerative diseases has not seen significant success. Drug development is an inherently risky business, as drugs that are still in development may be rendered obsolete by competitors. 

The company’s future financial success was wholly predicated upon its ability to develop and expand its products beyond its preclinical trials, which the firm admits could very well reveal unforeseen complications: “We cannot guarantee that any positive results in preclinical studies will successfully translate to human patients. Additionally, we cannot guarantee that additional preclinical studies will show positive results. It is not uncommon to observe results in human clinical trials that are unexpected based on preclinical testing, and many product candidates fail in clinical trials despite promising preclinical results.”

Other Risks Associated with Commercialization:

The risks associated with this type of investment do not end in the laboratory. Besides the scientific proof that Inhibikase still required, the prospectus stated that it would have to overcome the following business hurdles to successfully commercialize.

• Securing substantial additional funding.
• Successfully outlasting competitors.
• Building a strong intellectual property portfolio.
• Successfully navigating industry changes.
• Acquiring broad market acceptance by healthcare professionals.
• Building and maintaining appropriate clinical sales, distribution, and marketing capabilities through third parties.

Failure of any one of these goals could result in a total business failure and a complete loss for investors.

ThinkEquity Underwriter

ThinkEquity served as the underwriter of Inhibikase Therapeutics. Investors should know about this broker’s potential conflicts of interest. An underwriter should keep potentially overly risky investments from trading on the public stock market. But because underwriters make money by bringing new stocks to market, they may have the motivation to overlook certain risks.

What Can I Do If I Suffered Losses?

If you lose money investing in Inhibikase Therapeutics, consider reaching out to a Kurta Law securities attorney. Our securities attorneys have 5-star reviews on Google and a proven track record when it comes to securing fair settlements for our clients. Call (877) 600-0098 or email info@kurtalawfirm.com.