Yes, unfortunately it's true. Jagex announced that it's suspending development on Stellar Dawn to make sure the company is in the best position possible by concentrating on Transformers Universe and RuneScape. While the studio was able to shuffle most of Stellar Dawn's team around to new positions, the decision still resulted in the loss of 12 jobs.
In a prepared statement, CEO Mark Gerhard was highly complimentary of Stellar Dawn's team and progress. "Jagex has always been committed to developing the highest quality games and services. This is not a decision we have taken lightly; the Stellar Dawn team has achieved a great deal developing the game and should rightly be proud of their achievements so far."
Stellar Dawn fans might find hope in the language being used by the team in the forum announcement, as the title's development is described as being "paused" and a "temporary move" instead of being outright cancelled.