According to the latest docket posted, on December 14, 1999, the Court entered the Order signed by U.S. District Judge Louis C. Bechtle granting the lead plaintiffs’ motion for voluntary dismissal with prejudice pursuant to FRCP 41(a)(2) and 23(e). The consolidated action is dismissed with prejudice and the case closed.
As previously reported by the Company's Form 10-Q for the quarterly period ended June 30, 1999, on June 25, 1998, defendants filed a motion to dismiss the complaint. On December 1, 1998, the Court denied defendants' motion. On December 22, 1998, defendants answered the complaint, denying all liability and raising various affirmative defenses. The Court certified the action as a class action on behalf of all persons who purchased the Company's securities between December 2, 1997 and December 16, 1997. Discovery has been completed. At the conclusion of discovery, plaintiffs' counsel indicated that they would dismiss the action subject to notice to the class and approval by the Court. On August 6, 1999, plaintiffs
filed a motion for approval of class notice and to dismiss the action thirty days after notice is given.
The original complaint charges Centocor and its chief executive officer with violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934. According to the complaint, during the Class Period, defendants disseminated numerous announcements concerning the signing of a European marketing partner for Avakine in the fourth quarter of 1997 and its corresponding positive effect on the financial results of the company. Plaintiff alleges that these public statements were materially false and misleading because they failed to disclose that Centocor was not and would not be able to sign a European marketing partner and receive an up-front payment of approximately $27 million in the fourth quarter of 1997 and would not be able to achieve earnings of 50 cents a share for fiscal 1997.