According to the docket posted on the website, on April 18, 2002, the appellant court affirmed the decision of the district court.
As previously reported by the Form 10-Q for the Quarterly Period Ended June 30, 2000, on February 18, 2000, the district court dismissed with prejudice all eight consolidated putative class action lawsuits that had been filed in March and April 1999 against PathoGenesis Corporation, its chief executive officer and its chief financial officer. The court's order dismissed the consolidated cases and bars plaintiffs from filing another lawsuit on the matter. The plaintiffs then appealed the dismissal order to the United States Court of Appeals for the Ninth Circuit.
The original complaint asserts that defendants violated Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by making material misrepresentations and omissions that caused the Company's stock to trade at artificially inflated levels during the Class Period. In summary, the Complaint states that during the Class Period defendants made materially false and misleading statements about the market for its most important product, trobramycin solution for inhalation (TOBI). On March 22, 1999, the Company announced that its first quarter results would be far below consensus estimates. They announced sales of only $10 million, a net loss of $0.30 per share versus estimates of a $0.20 per share profit, and anticipated yearly sales only in the range of $62-63 million, dramatically less than the $90-100 million expected before the announcement. As a result of this announcement, PathoGenesis stock plummeted from $34 a share to close at $12 per share on March 23, 1999, a drop of approximately 66 percent.