UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

Plaintiff, Gwen Jordan, individually and on behalf of all other persons similarly situated, by her undersigned attorneys, alleges upon personal knowledge as to herself and his own acts, and on information and belief as to all other matters, based upon, inter alia, the investigation conducted by and through her attorneys, which included, among other things, a review of the public documents and announcements made by defendants, Securities and Exchange Commission ("SEC") filings, and press release regarding QLT Inc. ("QLT" or the "Company") as follows:

This is a class action on behalf of all purchasers of the securities of QLT during the period August 1, 2000, through and including December 14, 2000 (the "Class Period"), to recover damages caused by defendants' violation of the federal securities law. During the Class Period, defendants issued to the investigating public false and misleading financial statements, press releases, ad other information concerning the market for Visudyne, a drug made by the Company that was recently approved by the FDA to treat wet age-related macular degeneration ("AMD"), an eye disease that causes blindness in elderly people.

On December 14, 2000, QLT announced that it expected to miss its sales estimate for the fourth-quarter ended December 31, 2000. QLT attributed the shortfall to slower than expected growth in demand for Visudyne due to lack of reimbursement from governmental health administration authorities, private health insurers, and other third party payers for the cost of Visudyne treatment in Europe and the United States. QLT also lowered its sales for the year 2001.

This disclosure, discussed more fully below, contradicted the information about the demand for Visudyne issued by defendants to the market during the Class Period. On December 14, 2000, the Company's common stock plummeted approximately 31% on extremely heavy volume, losing $12.375 per share from the prior day's close of $40.438 per share. Also during the Class Period, when the price of QLT stock was at its highest level of the year, defendants Julia Levy and Kenneth Galbraith collectively sold over 157,00 shares of QLT stock, reaping proceeds of approximately CN$18.32 million.

The claims asserted arise under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 ("1934 Act"), 15 U.S.C. §§ 78j(b) and 78(a), and the rules and regulation promulgated thereunder by the SEC, including Rule 10b-5, 17 C.F.R. § 240.10b-5.

This Court has jurisdiction over the subject matter of this action pursuant to Section 27 of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1331.

Venue is proper in this District pursuant to Section 27 of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1391(b). Many of the acts and transactions constituting the violations of law alleged herein, including the offer and sale of securities an dissemination to the investing public of false and misleading information occurred, in part, in this District.

In connection with the acts, transactions and conduct alleged herein, defendants, directly and indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to, the United States mails, interstate telephone communications and the facilities of the national securities exchanges.

Plaintiff purchased shares of QLT common stock during the Class Period as shown in the annexed certification, and was damaged thereby.

Defendant QLT is headquartered in Vancouver, British Columbia, Canada. As of September 30, 2000, QLT had approximately 67.7 million shares outstanding. During the Class Period, QLT's common stock was actively traded on the Nasdaq Stock Market.

QLT develops and commercializes proprietary pharmaceutical products or use in photodynamic therapy, an emerging field of medicine that utilizes light-activated drugs in the treatment of disease. QLT's primary commercial product is Visudyne. Since the Company's introduction to Visudyne to the market in April 2000, it has accounted for approximately 80% of QLT's revenues.

QLT had a duty to promptly correct any public statements issued by or on behalf of the Company which had become false or misleading.

Defendants knew or recklessly disregarded that the misleading statements and omission complained of herein would adversely affect the integrity of the market for the Company's securities and would cause the price of the Company's securities to become artificially inflated. Defendants acted knowingly or in such reckless manner as to constitute a fraud and deceit upon plaintiff and the other members of he class (defined below).

Defendant Julia Levy ("Levy") is President, Chief Executive Officer, and a Director of QLT, since February 1996. Levy is a co-founder of the Company and had served as its Senior Vice President and Acting President and Chief Executive Officer prior to February 1996.

Defendant Kenneth Galbraith ("Galbraith") was QLT's Executive Vice President, Chief Financial Officer, and Corporate Secretary. Galbraith retired from the Company on October 31, 2000.

Defendants Levy and Galbraith are collectively referred to as the "Individual Defendants." The Individual Defendants, by reason of their management positions and responsibilities during the time relevant to this Complaint, were "controlling persons" of QLT within the meaning of Section 20 of the Exchange Act, and had the power an influence to control QLT and exercised such control to cause the Company to engage in the violations and improper practices complained of herein. The Individual Defendants, because of their positions as officers and director of QLT had access to adverse, non-public information concerning Visudyne, including, among other things, the market for Visudyne and the severe difficulties being encountered by retinal physicians in securing reimbursement from public and private insurance carriers and governmental agencies, both in the United States and in Europe.

The statements made by defendants as outlined below were materially false and misleading when made. Defendants had no reasonable or adequate basis to justify or support the statements identified below concerning Visudyne and the demand for its product. The true status of Visudyne reimbursement and sales demand which was known or recklessly disregarded by the defendants, remained concealed from the investigating public throughout the Class Period. Defendants, who were under a duty to disclose those facts, misrepresented or concealed them during the Class Period.

Plaintiff brings this action as a class action pursuant to Federal Rules of Civil Procedure 23(a) an (b)(3) on behalf of all persons who purchased QLT securities during the Class Period (the "Class"). Excluded from the Class are defendants, any entity in which they have a controlling interest or is a parent or subsidiary of or is controlled by the Company, and the defendants' officers, directors, affiliates, legal representatives, heirs, predecessors, successors, and assign.

The members of the Class are so numerous that joinder of all members is impracticable. While the exact number of Class members is unknown to plaintiff at this time and can only be ascertained through appropriate discovery, plaintiff believes that there are hundreds, if not thousands, of members of the Class who traded QLT securities during the Class Period. As noted at September 30, 2000, QLT had more than 67 million shares outstanding.

Common question of law and fact exist as to all members of the Class and predominate over any questions affecting solely individual members of the Class. Among the question of law and fact common to the class are whether:

the federal securities laws were violated by defendants' acts as alleged herein;

the Company issued false and misleading financial statements during the Class Period;

defendants acted knowingly or recklessly in issuing false and misleading statements;

the market prices of the Company's securities during the Class Period were artificially inflated because of defendants' conduct complained of herein; and

The members of the Class have sustained damages and, if so, what is the proper measure of damages.

Plaintiff's claims are typical of the claims of the members of the Class, as plaintiff and members of the Class, as plaintiff and members of the Class sustained damages arising out of defendants' wrongful conduct in violation of federal law as complained of herein.

Plaintiff will fairly and adequately protect the interest of the members of the Class and has retained counsel competent and experienced in class actions and securities litigation. Plaintiff has no interests antagonistic to or in conflict with those of the Class.

A class action is superior to other available methods for the fair and efficient adjudication of the controversy since joinder of all members of the Class is impracticable. Furthermore, because the damages suffered by the individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for the Class members to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action.

Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-on-the-market doctrine in that:

defendants made public misrepresentations or failed to disclose material facts during the Class Period.

the omissions and misrepresentations were material;

the securities of the Company traded in an open and efficient market;

the misrepresentations and omissions alleged would tend to induce a reasonable investor to misjudge the value of the company's securities; and

plaintiff and members of the Class purchased their QLT stock between the time defendants failed to disclose or misrepresented material facts and the time the true facts were disclosed, without knowledge of the omitted or misrepresented facts.

Based upon the following, plaintiff and members of the Class are entitled to the presumption of reliance upon the integrity of the market.

The statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to any of the false statements alleged herein, because none of the statements pleaded herein were identified as "forward-looking statements" when made. Nor did meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the statements accompany those statements. To the extent that the statutory safe harbor does apply to any statement pleaded herein, defendants are liable for those false forward-looking statements because, at the time each of those statements were made, the speaker actually knew the forward-looking statement was false and/or the statement was authorized and/or approved by an executive officer of the Company, who actually knew that those statements were false when made.

Visudyne is a pharmaceutical that treats AMD, a disease whose afflicted are virtually all over the age of 65. AMD comes in two forms - wet and dry. Currently, there are no treatments for "dry" AMD, which accounts for approximately 90% of the AMD cases. Visudyne treats a subset of "wet"AMD.

Prior to and during the Class Period, QLT repeatedly overstated the market for Visduyne. Marketing materials in QLT's SEC filings represented that, "worldwide approximately 500,000 new cases of wet AMD develop annually, of which 200,000 develop in North America, 200,000 develop in Europe and 100,000 develop in the remainder of the world."

QLT repeated these statements on its web site, claiming that the number of new wet AMD cases, comprising of the Company's total market for Visudyne, was approximately 500,000 annually, with 200,000 of these new cases developing in North America.

By all accounts, the launch of Visudyne in April 2000 was successful, resulting in positive financial results for the Company. Armed with the foregoing, defendants made knowingly or recklessly false statements about Visudyne.

On August 1, 2000, QLT issued a press release announcing its financial results for the second quarter and first half of 2000. For the three months ended June 30, 2000, QLT reported net income of CN$14,207,000 or CN$0.21 per common share compared to a net loss of CN$6,086,000 or CN$0.10 per share for the first quarter of 2000. Galbraith attributed the results largely to Visudyne: "the Company's net loss was greatly reduced this quarter due to the Company's share of profits from sales of Visudyne. . . . " Commenting further on Visudyne, Galbraith stated:

Global sales of Visudyne of approximately U.S. $25.5 million during the second quarter significantly exceeded expectations due mainly to the stellar launch in the U.S. which commenced April 13, 2000.

Strong sales performance in the second quarter in the U.S. clearly illustrates that AMD is a significant public health concern. Our co-development and marketing partner, CIBA Vision, the eye care unit of Novartis, executed an extremely effectively launch immediately following approval to ensure that Visudyne was broadly available to the thousands of patients diagnosed each month in the U.S. with this devastating condition.

In addition to the positive statements about Visudyne referenced above, as reported by Dow Jones News, the Company was "'comfortable' with projections that sales in 2000 will be between $95 million and $100 million, with revenue flowing largely from expected sales of the anti-blindness drug Visudyne."

During a teleconference with analysts following the release of QLT's second quarter financial results, defendant Galbraith stated that he expected a strong fourth quarter for Visudyne sales. Further, when asked by analysts whether the strong second quarter results might be a one-time phenomenon cause by pent-up demand, Galbraith said that demand for the drug is continuing to build and that, "I don't think this is going to be a one-quarter blip."

As a result of the above statements, QLT's stock escalated from $65.875 on July 31, 2000, to $80,1875 on August 7, 2000, a 52-week high for the stock.

The statements concerning the demand and/or sales for Visudyne, set forth in paragraphs 30 through 32 above, were materially false and misleading for, at least, the following reasons:

after the launch of Visudyne, CIBA Vision then-experiencing significant impediments regarding reimbursement issues with regulatory agencies in the United States and Europe, the severity of which was not disclosed to the investing public. For example, defendants knew that Visudyne's market potential was held back by the delay in formulating reimbursement criteria by public agencies such as the United States Health Care Financing Administration ("HFCA"). In the United States this meant that reimbursement criteria were subject to the decisions of each state agency responsible for such matters. With no uniform criteria, some states were refusing to reimburse physicians for the treatment, thereby impacting future sales of the drug. Defendants also knew that until HCFA established its reimbursement criteria, there was no money in Medicare to provide physicians with reimbursement for treatment;

the demand for Visudyne was dependent upon, inter alia, the ability of doctors to obtain reimbursement from public and private insurance plans. Defendant knew that because Visudyne was a new drug, where none existed previously, there was significant reluctance to provide reimbursement for the treatment without a track record. Therefore, doctors were reluctant to adopt Visudyne therapy until these reimbursement issues were resolved;

the market for Visudyne was not as large as represented. According to the U.S. National Institutes of Health and the American Health Assistance Foundation, only approximately 65,000 new wet AMD cases develop each year in the United States, and 20,000 in Canada. According to market analysts, Visduyne costs approximately $1,300 wholesale. Therefore, defendants lacked any basis to project sales of $95 million and $100 million for the remainder of 2000;

in light of the foregoing (a)-(c_, Galbraith lacked any factual basis to state that demand for Visudyne was continuing to build on that, "I don't think this is going to be a one-quarter blip."

Following defendants' positive statements about Visudyne, and as QLT stock was peaking, Levy and Galbraith collectively sold over 157,000 shares of QLT stock for proceeds of approximately CN$18.32 million, as shown below:

From August 30 through August 31, 2000, defendant Levy sold 36,000 shares of QLT for a total proceeds of approximately CN$3,99 million. On September 1, 2000, defendant Levy sold 6,000 shares of QLT for total proceeds of approximately CN$660,000.

On August 8, 2000, defendant Galbraith sold 86,100 shares of QLT for total proceeds of approximately CN$10.4 million. On September 8, 2000, defendant Galbraith sold 29,700 shares of QLT for total proceeds of approximately CN$3.43 million. Through these sales, defendant Galbraith unloaded approximately 85% of his QLT securities holdings.

On October 11, 2000, QLT issued a press release announcing its sales of Visudyne for the third quarter of 2000. The press release stated, in part:

QLT Announces Visduyne (TM) Sales for Third Quarter Company Confident of Continued Strong Growth in Sales

VANCOUVER, Canada-Following today's release of third quarter sales by Novartis AG (NYSE: NVS), QLT Inc. (NASDAQ: QLT1; TSE: QLT) reported global Visudyne (TM) therapy sales of U.S. $31 million (CDN $46.5 million or 53 million Swiss Francs) for the quarter ended September 30, 2000.

QLT expects to release its full financial results on Tuesday, October 17, 2000.

"We are pleased with the 22% growth of Visudyne sales in the third quarter versus the second quarter, which was consistent with expectations," said Julia G. Levy, QLT's president and CEO. "The strong endorsement by retinal specialists of Visudyne clearly point to a product launch which, to date, has been the fastest introduction in the ophthalmology pharmaceutical sector in the U.S. We are confident in CIBA Vision's ability to continue the strong growth in sale since the U.S. and rapidly introduce Visudyne in Europe and other markets as approvals are received."

As a result of the above statements, QLT's stock escalated from $50.43 on October 10, 2000, to $55 on October 11, 2000.

Defendant Levy's statements were materially false and misleading for the reasons set forth in paragraph 34(a)-(c), above. Levy knew or recklessly disregarded that:

CIBA Vision was still experiencing significant obstacles regarding reimbursement with regulatory agencies in the United States and Europe, the severity of which was not disclosed to the investing public. Levy knew that the public agencies in Europe and HCFA (the reimbursement arm of Medicare) still had not formulated reimbursement criteria sufficient to satisfy the demand of retinal physicians, who were reluctant to adopt the Visudyne therapy until clear standards were created.

The demand for Visudyne was dependent upon, inter alia, the ability of doctors to obtain reimbursement from public and private insurance plans. Levy knew that because Visudyne was a new drug, where none existed previously, there was significant reluctance to provide reimbursement for the treatment without a tract record. Similarly, defendants knew that because the drug was new, there was no money in Medicare to provide physicians with reimbursement for the treatment. Therefore, doctors were reluctant to adopt the Visudyne therapy until these reimbursement issues were resolved;

the market for Visudyne was not as large as represented. According to the U.S. National Institutes of Health and the American Health Assistance Foundation, only approximately 65,000 new wet AMD cases develop each year in the United States, and 20,000 in Canada. Accordingly to market analysts, Visudyne costs approximately $1,300 wholesale. Therefore, Levy lacked any basis to profess confidence in "CIBA Visions's ability to continue the strong growth in sales in the U.S. and rapidly introduce Visudyne in Europe and other markets as approvals are received."

On October 17, 2000, defendants made a series of false and misleading statements about Visudyne that let the market to believe, among other things, that the demand for Visudyne remained strong.

First, QLT issued a press release announcing its financial results for the third quarter of 2000. The press releases stated, in part:

QLT announces Third Quarter Financial Results Strong Growth in Visudyne (TM) Sales Results in First Quarter of Profitability

VANCOUVER, Canada - QLT Inc. (NASDAQ: QLTI1; TSE: QLT) today reported financial results for both the third quarter and first nine months of 2000. All amounts, unless specified otherwise, are in Canadian dollars.

For the three months ended September 30, 2000, QLT reported net income of $4,251,000 or $0.06 per common share (U.S. $0.04 per common share) compared to a net loss of ($9,715,000) or ($0.15) per common share (U.S. $0.11 per common share) for the same period in 1999.

"We are extremely pleased that the strong growth in Visudyne (TN) sales has resulted in the treatment of a significant number of additional patients with age-related macular degeneration (AMD), the leading cause of blindness among people over the age of 50," said Kenneth H. Galbraith, QLT's Executive Vice President and CFO."

"We were able to accomplish our corporate goal of profitability a calendar quarter earlier than expected due to a combination of 22% growth in Visudyne sales, strong investment and other income and lower than expected costs.

"Global sales of Visudyne of approximately U.S. $31 million during the third quarter slightly exceeded expectations due to continued growth in the U.S. market and higher than expected contributions from European and other markets for which approvals were recently received," said Galbraith.

We are confident that our co-development and marketing partner, CIBA Vision, the eye care unit of Novartis, will continue its efforts to ensure that Visudyne is made widely available to the thousands of patients diagnosed with this devastating condition each month in the United States, Canada, Europe and other markets where approvals have been received.

Commercial Visudyne sales in North America represented U.S. $22 million or approximately 71% of total Visudyne sales in the third quarter. The remaining U.S. million was related to sales in Europe and other markets.

Second, in a Dow Jones News article, defendant Galbraith was quoted as stating, "QLT Inc. sees 30-50% growth in Visudyne sales for the fours quarter over the third quarter."

Third, in a television interview on CNN, defendant Galbraith discussed the potential for Visudyne, as follows:

We're about six months in the marketplace in the U.S. and the uptick for the product looks excellent.

* * *

Well our expectation is that we can make this the top selling eye care product ever which would be about 6 to $700 million dollars US in sales by 2003. So we're off to a good start. We have a little ways to go. We do about 100 million this year and hopefully grow that to 6 to 700 by 2003. So pretty good growth rates.

Fourth, defendant Levy spoke with analysts during a conference call hosted by the Company. On the call, defendant Levy stated, "Docs are still doing lots of new patients in September and October. That's why we're confident about Q4[sales]." When asked about sales estimated for the year 2001, Levy stated, "We think sales will be a hot higher. That will leverage our fixed costs." Finally, when asked about the Company's outlook for the fourth quarter ended December 31, 2000, Levy stated, "I don't think we want to go through all the components [of earnings]. We just want to $40-50M in sales of Visudyne. We're comfortable with the 35% quarter-over-quarter growth [from the third quarter 2000]."

During the conference call with analysts, Levy also responded to questions regarding the reimbursement status of Visudyne treatments, as follows:

I don't have state by state data. Some of the states have solved earlier problems - Texas and California. Doctors are getting paid. Negotiations are ongoing. At the analyst meeting in August - there were some pockets where things weren't as good as we liked - we've made progress in Texas, Florida, and Ohio - the payment procedures are much clearer. Some of the hiccup that was there in July and August has gone away. HCFA [Health Care Financing Administration] is going through its normal process of establishing a national policy.

 

When asked about reimbursement approval in the four major European countries,

defendant Levy responded:

France will come on board very soon. We've already been given high priority status. Italy is reimbursed right now. Germany could be late this year or early 2001.

Finally, when asked about the Company's revenues for September 2000, defendant Levy

responded:

We'd like to get away from monthly sales and talk about quarterly. Obviously, it was much greater than 1/3 of the total. We'll find out next year when we have no reimbursement issues what summer really looks like. That's why we're confident about Q4.

As a result of the above statements, QLT's stock escalated from $53.6875 on October 13, 2000 to $57.065 on October 17, 2000.

The statements in the foregoing press release, news report, and conference call were materially false and misleading. Defendants knew or recklessly disregarded the facts set forth in paragraphs 34(a)-(c) above.

On October 18, 2000, in an article in The Globe and Mail, defendant Galbraith was quoted as stating, "the company expects fourth-quarter sales of the drug [Visudyne] to be between $40 million and $50 million, bringing sales for the year to more than $100 million."

Defendant Galbraith's statement in The Globe and Mail was materially false and misleading for the reasons set forth in paragraph 34(a)-(c), above. Galbraith knew or recklessly disregarded that the reimbursement issued and consequent impact on demand had not been sufficiently rectified to justify his sales expectation.

On November 2, 2000, an article in The Glove and Mail reported that QLT's associate director of investor relations told Dow Jones that "he found out yesterday that reimbursement issues for QLT's hot-selling Visudyne treatment for blindness in seniors have now been resolved by Health Care Finance Administration, the reimbursement arm of Medicare in the United States."

As a result of the above statement, QLT's stock escalated from $49,73 on October 31, 2000, to $53,75 on November 2, 2000.

On November 10, 2000, QLT issued a press release which stated, in part:

Health Care Financing Administration Issues National Coverage Policy for Visudyne Therapy

ATLANTA and VANCOUVER, British Columbia, Nov. 10/NCW/CIBA Vision Corporation, the eye care unit of Novartis AG (NYSE: NVS - news), and QLT Inc. (Nasdaq: QLT1; Toronto today announced that the Health Care Financing Administration (HCFA) has issued its national coverage policy for Visudyne (TM) (vereporfin for injection) therapy in patients with predominantly choroidal neovascularization (CNV) secondary to age-related macular degeneration (AMD) - leading cause of blindness. The decision, posted November 9 by HCFA, is the result of a series of consultations with physicians, clinical investigators and representatives from CIBA Vision and QLT.

HCFA, in its memorandum, establishes guidelines for patient coverage. Most importantly, the policy clarifies that the level of visual acuity at which patients may be eligible for Visudyne therapy will be left to the judgment of the treating physician.

"We are pleased with the endorsement from the HCFA that Visudyne therapy offers a significant benefit on visual function in patients with the predominantly classic form of wet AMD," said Dan Myers, President of CIBA Vision's North American Ophthalmics group. "This decision now clarifies the reimbursement status of Visudyne enabling patients to be treated with this sight-saving new therapy."

"Dr. Julia Levy, President and Chief Executive Officer of QLT commented, "This is excellent news for patients and physicians. HCFA has confirmed the value that Visudyne therapy represents to patients affected by the wet form of AMD by providing guidelines in support of our FDA approval label."

Despite reporting that HCFA has established reimbursement guidelines for Visudyne, defendants, nevertheless, failed to disclose the true impact that the delay between April 2000 and November 2000 had on demand for Visudyne. That announcement would come approximately one month later.

On December 14, 2000, QLT shocked investors by issuing a press release announcing that its sales expectations for Visudyne for the fourth quarter of 2000 would not be met. Contrary to the Company's prior announcements, the press release reported that fourth quarter demand for Visudyne was expected to grow only 20 to 25% over the third quarter, translating into sales of approximately US$36-38 million, a far cry from the US$40-50 million the Company had assured analysts and the market in mid-October. Defendants attributed the shortfall to a lack of demand and acknowledged that their statements concerning sales of Visudyne were not reasonably based on fact. In this regard, Levy stated that "[expectations after such a strong second quarter may have been a little too bullish given that we did not have a clear resolution on reimbursement." Levy also admitted that CIBA Vision had faced "obstacles" regarding "reimbursement related issues in Europe and in the U.S."

The market's response to this news was swift and punitive as the Company's common stock fell approximately 31% from its close of $40.4375 on December 13, 2000, to a low of $24 per share on Thursday, December 14, 2000.

In a December 15, 2000 article in The Globe and Mail, Levy further admitted that "getting public and punitive insurance plans t reimburse doctors in the United States has been a struggle because this is a new drug for a disease where there was previously no other treatment." Accordingly, "there was no pool of money in Medicare for Visudyne."

At a December 19, 2000 healthcare conference sponsored by analysts at Dain Rauscher Wessel in New York City, Levy acknowledged that the reimbursement issues were a problem that the Company's management failed to properly address.

As alleged herein, defendants acted with scienter in that defendants knew or recklessly disregarded that the public documents and statements issued or disseminated in the name of QLT were materially false and misleading; knew or recklessly disregarded that such statements or documents would be issued or disseminated to the investing public; and knowingly and substantially participated or acquiesced in the issuance or dissemination of such statement or documents as primary violations of the federal securities laws. The Individual Defendants further demonstrated their fraudulent state of mind by selling over 157,000 shares of QLT stock reaping proceeds of approximately CN$18.32 million in illegal insider sales during the months of August and September while after the dissemination of false information, the price of QLT;'s stock was peaking.

Plaintiff repeats and realleges each and every allegation contained in the foregoing paragraphs as if fully set forth herein.

This Count is asserted against defendants and is based upon section 10(b) of the 1934 Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder.

During the Class Period, defendants directly engaged in a common plan, scheme, and unlawful course of conduct, pursuant to which it knowingly or recklessly engaged in acts, transactions, practices, and courses of business which operated as a fraud and deceit upon plaintiff and the other members of the Class, and made various deceptive and untrue statements of material facts and omitted to state material in order to make the statements made, in light of the circumstances under which they were made, not misleading to plaintiff and the other members of the Class. The purpose and effect of said scheme, plan, and unlawful course of conduct was, among other things, to induce plaintiff and the other members of the Class to purchase Columbia common stock during the Class Period at artificially inflated prices.

During the Class Period, defendants, pursuant to said scheme, plan, and unlawful course of conduct, knowingly and recklessly issued, caused to be issued, participated in the issuance of, the preparation and issuance of deceptive and materially false and misleading statements to the investing public as particularized above.

As a result of the dissemination of the false and misleading statements set forth above, the market price of the Company's common stock was artificially inflated during the Class Period. In ignorance of the false and misleading nature of the statements described above and the deceptive and manipulative devices and contrivances employed by defendants, plaintiff and the other members of the Class relied, to their detriment, on the integrity of the market price of the stock in purchasing then Company's common stock. Had plaintiff and the other members of the Class known the truth, they would not have purchased said shares or would not have purchased them at the inflated prices that were paid.

Plaintiff and the other members of the Class have suffered substantial damages as a result of the wrongs herein alleged in an amount to be proved at trial.

By reason of the foregoing, defendants directly violated section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that it: (a) employed devices, schemes, and artifices to defraud; (b) made untrue statements of material facts or omitted to state material facts in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (c) engaged in acts, practices, and a course of business which operated as a fraud and deceit upon plaintiff and the other members of the Class in connection with their purchases of Columbia common stock during the Class Period.

Plaintiff repeats and realleges each and every allegation contained above as if fully set forth herein.

The Individual Defendants acted as controlling persons of the Company within the meaning of section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level positions, participation in and/or awareness of the Company's operations, and/or intimate knowledge of the Company's expansion plans and implementation thereof, the individual defendants had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company, including the content and dissemination of the various statements that plaintiff contends are false and misleading. The Individual Defendants was provided with or had unlimited access to copies of the Company's reports, press releases, public filings and other statements alleged by plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected.

In particular, the Individual Defendant had direct and supervisory involvement in the day-to-day operations of the Company and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the securities violations as alleged herein, and exercised the same.

By virtue of his position as a controlling person, the Individual Defendants are liable pursuant to section 20(a) of the Exchange Act. As a direct and proximate result of the wrongful conduct, plaintiff and other members of the Class suffered damages in connection with their purchases of the Company's securities during the Class Period.

WHEREFORE, plaintiff, on his own behalf and on behalf of the Class, prays for judgment as follows:

Declaring this action to be a proper class action and certifying plaintiff as class representative under Rule 23 of the Federal Rules of Civil Procedure;

Awarding compensatory damages in favor of plaintiff and the other members of the Class against the Defendants for the damages sustained as a result of the wrongdoings of the Defendants, together with interest thereon;

Awarding plaintiff the fees and expenses incurred in this action, including reasonable allowance of fees for plaintiff's attorneys, and experts;

Granting extraordinary equitable and/or injunctive relief as permitted by law, equity and federal and state statutory provisions sued on hereunder, including attaching, impounding, imposing a constructive trust upon or otherwise restricting the proceeds of Defendants' trading activities or their other assets so as to assure that plaintiff has an effective remedy; and

Granting such other and further relief as the Court may deem just and proper.

PLAINTIFF DEMANDS A TRIAL BY JURY

Dated: February 13, 2001

By:___________________________

Fred Taylor Isquith, Esq. (FI-6782)

Gregory M. Nespole, Esq. (GN-6820)

270 Madison Avenue

New York, New York 10016

(212) 545-4600

NADEEM FARUQI

320 East 39th Street

New York, NY 10016

Telephone: 212/983-9330