Vallon Pharmaceuticals

Kurta Law is investigating brokers who recommended that their clients purchase shares of Vallon Pharmaceuticals. 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 Vallon Pharmaceuticals, 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 Vallon Pharma?

Vallon Pharma was a biotechnology company that focused on the development of drugs intended to treat disorders within the central nervous system.

At the time of the prospectus filing, Vallon Pharma was working on developing ADAIR, a drug that was intended to be an abuse-deterrent formulation of dextroamphetamine used in the treatment of ADHD and narcolepsy.

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

In December of 2022, Vallon merged with GRI Bio, another pharmaceutical company focused on the development of anti-inflammatory drugs.

Vallon Pharma Stock

Vallon Pharma Therapeutics (GRI) investments involve a high degree of risk, according to the company’s prospectus. The company debuted at $8.00 per share and recently trade at $0.53 per share. This massive drop in value was not surprising, given the risks clearly disclosed in the company’s prospectus.

Risks Associated with Vallon Pharma 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 not yet demonstrated our ability to generate revenue, and we may never be able to produce revenues or operate on a profitable basis. We have incurred losses since our inception (January 11, 2018) and expect to experience operating losses and negative cash flow for the foreseeable future.”

At the time of the prospectus filling, ADAIR was the only product that Vallon had in clinical development. The prospectus indicates that the success of the business largely depended on ADAIR’s successful completion of these clinical trials, which was far from certain: “Even though ADAIR is in the clinical development stage, it has an uncertain chance of successfully completing clinical development and gaining regulatory approval.”

Other Risks Associated with Commercialization:

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

• Securing substantial additional funding.
• Developing and maintaining successful strategic relationships.
• Building a strong intellectual property portfolio.
• Gaining broad market acceptance for product candidates.
• Staving off competitors.
• Adapting to changing regulations.
• Building and maintaining appropriate clinical sales, distribution, and marketing capabilities through third parties.
• Developing additional products to solidify market presence.

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 Vallon Pharma. 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 a motivation to overlook certain risks.

What Can I Do If I Suffered Losses?

If you lose money due to investing in Vallon Pharma, 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.