A securities class action lawsuit involving a medical product firm was recently dismissed in court.
Unilife Corporation will no longer be dealing with the class action claim against it, as the company announced that the plaintiff – the company’s shareholders – withdrew the lawsuit willingly from the U.S. District Court for the Middle District of Pennsylvania.
The reason for the dismissal of the suit was due the shareholders in the case not having a lead plaintiff. The court set a deadline of Dec. 31, 2013 for a lead plaintiff to come forward, and there were no shareholders who took advantage of the opportunity.
Unilife added that the lawsuit was based on allegations from an employee who is no longer attached to the company, and the issues surrounding the claim had no merit.
The company typically works with the development and supply of drug delivery systems through injectable means. It is based in York, Pa., which is where it performs much of its manufacturing.
Lawsuit filed in November
Multiple law firms alerted shareholders of the initial lawsuit in November. Pomerantz, Grossman, Hufford, Dahlstrom and Gross, LLP, noted it filed the class action lawsuit in the U.S. District Court for the Middle District of Pennsylvania on Nov. 1.
This action involved all shareholders who acquired stock in the company during the class period between July 13, 2011, and Sept. 9, 2013. The initial allegations from this lawsuit was that the company violated the Securities Exchange Act of 1934, specifically Sections 10(b) and 20(a), as well as Rule 10b-5.
Specifics regarding the action included allegations that the company’s Unifill type of syringes were not in compliance with the Food and Drug Administration, while it also had its quality management system also not in compliance. The lawsuit also noted that the company may have inflated its Unifill production, even though there was not the same level of demand for the product.
Talbot Smith, a former employee of the company, filed a grievance on Aug. 20, 2013, due to his job being eliminated after he reported some of the aforementioned issues to authorities. In the beginning of September of that year, an article in Forbes was released that explained the company’s manufacturing plant was running at less than 5 percent of its total ability. This initially caused the company’s stock to fall markedly.