The lawsuit centers on claims that Aardvark failed to disclose significant safety concerns identified during clinical trials for ARD-101, a therapy intended to treat hyperphagia in Prader-Willi Syndrome. According to the complaint, the company's public disclosures downplayed the risks of reversible cardiac observations, specifically QRS prolongation, which surfaced at doses above target therapeutic levels.

These omissions allegedly led to a material overstatement of the company’s commercial and regulatory prospects. The market reacted sharply to the unfolding situation: on February 27, 2026, Aardvark shares dropped over 56% after the company announced a voluntary pause of its Phase 3 HERO trial. The stock fell an additional 32.1% on May 14, 2026, when the FDA imposed a full clinical hold on the firm’s investigational new drug application, effectively halting all ongoing studies.

Reed Kathrein, the partner at Hagens Berman leading the investigation, asserts that the firm is examining allegations that the company misrepresented the drug's safety profile and development trajectory. Investors who suffered losses during the identified period have until October 13, 2026, to move the court for appointment as lead plaintiff. The firm is also inviting whistleblowers with non-public information to come forward, citing potential rewards under SEC programs for original information regarding corporate negligence.