A law firm recently announced that it filed a securities class action suit against a biotechnology company for alleged breaches of federal securities laws.
Gainey McKenna & Egleston explained that it initiated the litigation against PDL BioPharma, Inc. in the U.S. District Court for the District of Nevada. The class action lawsuit was filed on behalf of investors who purchased shares in the company between Nov. 6, 2013 and Sept. 16, 2014.
The complaint alleges that the biotech firm overstated several aspects of its business including its total revenue, royalty revenue, net income and net cash provided by operating activities. In addition, the company misled investors about the extent of its expenses. The litigation also claims that the biotech company didn't properly classify the royalty and milestone payments under an agreement with Depomed. Because of the aforementioned charges against PDL BioPharma, the lawsuit claims the investors were misled by the company's financial statements.
On Aug. 8, 2014, the company released a press statement explaining that it requested a five day extension, for filing its quarterly report for the period ending on June 30, from the Securities and Exchange Commission. PDL BioPharma said it needed the extra time in order to address comments made by the SEC and finish a review regarding accounting changes following the acquisition of Depomed royalty rights.
After the market had closed on Sept. 16, 2014, the company filed a Form 8-K with the SEC, stating that it had been notified by its accounting firm, Ernst & Young LLP, that it was resigning effective Sept. 11. Following news of the resignation, stock in the company fell $1.17 per share, or 12 percent, to close at $8.48 on Sept. 17.
For individuals who purchased shares in PDL BioPharma, and would like to be appointed lead plaintiff, a request must be sent to the court no later than Nov. 17, 2014. Investors who are interested in learning more about the class action lawsuit should contact Thomas McKenna or Gregory Egleston.
PDL BioPharma responds to litigation
The company, in a response to the lawsuit, stated that it would defend itself against the litigation.
"We believe that any claims alleging violations of securities laws are without merit and we intend to vigorously defend our position," John P. McLaughlin, president and chief executive officer of PDL, asserted in the statement. "We remain committed to our strategy of acquiring income generating assets and continuing to pay dividends to our shareholders."