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OSI Pharmaceuticals, Inc. Summary: According to a press release dated March 14, 2008, OSI Pharmaceuticals, Inc. announced that it has reached a preliminary agreement to settle a putative class action lawsuit filed on or about December 16, 2004 in the U.S. District Court for the Eastern District of New York against OSI, certain of its current and former executive officers and current and former members of its Board of Directors. Under the terms of the settlement, the pending action will be dismissed with prejudice and without any admission of liability on the part of the Company or any of the individually named defendants. The amount of the settlement is $9 million. Approximately, $500,000 will be paid by OSI, and the balance of the settlement will be paid by OSI insurer. The settlement will have no impact on the Company's 2008 financials. The terms of the settlement are subject to court approval.
As summarized by the Company’s FORM 10-K for the fiscal year ended December 31, 2007, on or about December 16, 2004, several purported shareholder class action lawsuits were filed in the United States District Court for the Eastern District of New York against our company, certain of our current and former executive officers, and the members of our Board of Directors. The lawsuits were brought on behalf of those who purchased or otherwise acquired our company’s common stock during certain periods in 2004, which periods differed in the various complaints. The Court appointed a lead plaintiff who, on February 17, 2006, filed a consolidated amended class action complaint seeking to represent a class of all persons who purchased or otherwise acquired our company’s common stock during the period from April 26, 2004 through November 22, 2004. The consolidated complaint alleges that the defendants made material misstatements and omissions concerning the survival benefit associated with our company’s product, Tarceva, and the size of the potential market of Tarceva upon FDA approval of the drug. It alleges violations of Sections 11 and 15 of the Securities Act of 1933, as amended, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The consolidated complaint seeks unspecified compensatory damages and other relief. On April 7, 2006, we filed a motion to dismiss the consolidated amended complaint. Briefing on this motion was completed on June 21, 2006. In an opinion dated March 31, 2007 (and entered on the docket on April 4, 2007), the Court granted in part and denied in part the motion to dismiss. The Court dismissed claims against some of the individual defendants and dismissed the Section 11 and 15 claims, but granted the plaintiff 30 days leave to replead the Section 11 claim in accordance with the Court’s order and to renew the Section 15 claim. The plaintiff did not amend, and thus those claims were dismissed with prejudice. The parties have now informed the Court that they have reached an agreement in principle to settle this action. The parties are in the process of finalizing the settlement papers, which will then be subject to Court approval.
The original complaint alleges that defendants OSIP, certain officers and/or directors violated Section 11, 12(a)(2) and 15 of the Securities Act of 1933 having caused, allowed or permitted false and materially misleading registration statement and prospectus dated November 10, 2004 to be issued, whereby $445,000,000 of OSIP's stock was sold to the investing public at artificially inflated prices. In addition, defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations about the Company's new anti-cancer drug Tarecva, which failed to disclose and /or misrepresented the following adverse facts, among others, that the defendants knew, at least as early as October 26, 2004 that: (1) the Food and Drug Administration ("FDA") would require that OSIP disclose in it labeling for Tarceva that no survival benefit was observed in the epidermal growth factor receptor ("EGFR")-negative subgroup; and (2) OSIP did not have sufficient data to claim that Tarceva provided a survivability benefit for EGFR-negative patients. As a result of the foregoing, the defendants' positive statements only served to artificially inflate the Company's stock price.
The complaint further alleges that on November 19, 2004, a Piper Jaffray analyst report commented on the FDA's approval of Tarceva and a "surprise" in the labeling of Tarceva. The "surprise" in labeling shows that contrary to the Company's prior representation to the investing public, there is currently no scientifically significant data for OSIP's statement that Tarceva provided a survivability benefit for EGFR-negative patients. The revelation in this analyst report caused OSIP's stock price to drop from $64.25 per share on November 18, 2004 to $58.16 per share on November 19, 2004, on volume of 18,496,800 -- over ten times the previous day's volume. The Company's common stock price continued to drop following the publication of the Piper Jaffray analyst report to $54.22 per share on Monday, November 22, 2004.
INDUSTRY CLASSIFICATION:
SIC Code: 2835
Sector: Healthcare
Industry: Biotechnology & Drugs
| COMPANY/ISSUER NAME: | OSI Pharmaceuticals, Inc. |
| COMPANY/ISSUER TICKER: | OSIP |
| COMPANY WEBSITE: | http://www.osip.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Ronald Kassover, et al. v. OSI Pharmaceuticals, Inc., et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint - Jury Trial Demanded | |||
| Type: Complaint | Date on the document: 12/16/2004 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| In Re: OSI Pharmaceuticals, Inc. Securities Litigation | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| Consolidated and Amended Class Action Complaint for Violations of Federal Securities Laws | |||
| Type: Complaint | Date on the document: 02/17/2006 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 06/21/2006 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 09/07/2007 | ||
| Stipulation of Settlement | |||
| Type: Settlement | Date on the document: 03/14/2008 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 03/18/2008 | ||
| OTHER DOCUMENTS | |||
| Case Name and/or Number: | |||
| Type: | Date on the document: | ||
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