Law Firm Probes AQST Investor Losses Amid Critical Anaphylm FDA Decision

What happened

Faruqi & Faruqi, LLP has initiated an investigation into claims for Aquestive Therapeutics investors who suffered significant losses, indicating potential legal scrutiny. This news surfaces just ahead of the January 31, 2026 PDUFA date for Anaphylm, the company's pivotal needle-free epinephrine film, which is the core of its single-asset strategy. The DeepValue report rates AQST as a 'POTENTIAL SELL' due to an encumbered balance sheet with negative equity, rising cash burn, and intense competition from neffy, pricing the stock for smooth approval despite high risks. With scenarios ranging from $3.50 in a bear case to $10.50 in a bull case, the report warns of unfavorable risk-reward skewed toward downside from regulatory or commercial disappointment. The legal probe adds a new layer of uncertainty, potentially exacerbating investor anxiety and volatility during this binary catalyst period.

Implication

Investors should interpret this legal notice as a warning sign that could trigger further stock declines if the probe reveals material disclosure issues or leads to costly lawsuits. It compounds the existing financial vulnerabilities highlighted in the DeepValue report, including negative equity, substantial operating losses, and heavy reliance on Anaphylm's success. Near-term, this may dampen bullish sentiment and increase selling pressure, particularly with the PDUFA date imminent and market consensus already crowded. Over the longer horizon, potential legal outcomes could strain liquidity, hinder refinancing efforts for high-coupon debt, and distract management from launch execution. Consequently, the overall investment case becomes even more skewed toward the bear scenario, reinforcing the 'POTENTIAL SELL' rating and caution against holding positions through this volatile period.

Thesis delta

The legal investigation does not alter the core thesis that AQST is a high-risk, single-asset play with limited upside due to structural balance sheet constraints and competitive pressures. However, it introduces incremental governance and litigation risk that could hasten negative outcomes, such as accelerated equity dilution or regulatory setbacks. This strengthens the conviction in the 'POTENTIAL SELL' rating by adding another potential catalyst for downside realization, especially if the probe uncovers issues that erode investor confidence ahead of the PDUFA date.