The pharmaceutical company Alexion has been served with a securities class action lawsuit concerning false or misleading statements about alleged sales practices. To learn more this case, visit Battea’s Alexion case summary.
Specifically, the class action suit alleges that Alexion and certain of its officers engaged in inappropriate sales practices around Soliris, its most popular prescription drug. As a result of these practices, it is alleged that Alexion’s Soliris revenues are not going to remain as high on an ongoing basis as they have been, and that as a result all statements the company made about the drug publicly were false or misleading.
The company first raised eyebrows when it canceled its attendance at a major health care conference, which was to include a presentation, and did not file a quarterly report with the U.S. Securities and Exchange Commission within two days of its earnings announcement in late October. Less than a week later, the company revealed that sales practices for Soliris – which accounted for some 92 percent of its sales this year – were under investigation. The company delayed its third-quarter financial reporting at that time as well.
The suit has a class period from Feb. 10, 2014, to Nov. 9, 2016.
What the company says
On Nov. 9 – the end of the class period, Alexion announced that it had filed a notice with the SEC about its late quarterly reporting, and that its board of directors was conducting an investigation after hearing from a former employee about its sales practices related to Soliris. However, it noted that the company had not yet determined whether instances of the drug not being ordered for patients actually happened, or any similar issues. The company also retained independent help to aid in the investigation.
“The Audit and Finance Committee and its counsel are working diligently to complete the investigation, but at this time it is uncertain when this investigation will be completed and what the results of such investigation will be,” the company said.
A little more than a month later, however, it was announced that Alexion’s CEO and CFO had both resigned, and that the investigation was nearing its completion.
Meanwhile, investors and those in the pharma industry are dubious as to what’s going on with the investigation, according to a report from Bloomberg News. The fact that the details of the investigation are being held under wraps – what the company is even investigating remains a secret – has some investors nervous, and the company’s stock has taken a significant hit as a result. Problematically, the fact that some 92 percent of Alexion’s sales are tied up in the Soliris drug under investigation has many on edge; if sales volume on Soliris were to drop even slightly, that would have a potentially massive negative impact on the firm’s bottom line.
How has the stock price moved?
Even before these latest issues, Alexion had been a little up-and-down in recent months. While the stock’s year-to-date high price of about $190 per share was observed in early January, it has fallen appreciably since then. More recently the stock has mostly moved between $120 and $130 per share, but slipped below those marks first when Alexion canceled its appearance at the industry conference, and then when it announced it had delayed its filings.
Then, in the wake of the leadership change announcement, the company’s stock plummeted further, falling from $132.07 per share to $110.01 in a single day.
For more information on this case or other class action litigations, please contact Sam Wankel, Senior Vice President, Research, Battea Global Litigation Research, Inc., at 203-987-4949 or firstname.lastname@example.org.