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Case Status:    SETTLED
On or around 06/06/2001 (Date of order of final judgment)

Filing Date: January 25, 1999

According to the docket, on March 1, 2001, the Court entered the Order by U.S. District Judge Owen M. Panner preliminarily approving the settlement. On June 6, 2001, the Court entered the Order granting the Plaintiff’s motion for final approval of the settlement. Further, the Court granted the motion awarding plaintiffs’ attorneys $523,359.59 in expenses and $1,725,000 in attorney's fees. The 4 Class Representatives were awarded compensatory awards in amount of $10,000 each, paid from the Settlement Fund. The Court entered the Final Judgment of Dismissal with Prejudice and dismissed the consolidated action with prejudice.

As reported by the Company’s Form 10-Q for the quarterly period ended January 31, 2001, the Company and certain officers of the Company have been named as defendants in a consolidated First Amended Class Action Complaint filed July 6, 1999 in the United States District Court for the District of Arizona under the caption In re Zila Securities Litigation, No. CIV 99 0115 PHX EHC. The First Amended Class Action Complaint seeks damages in an unspecified amount on behalf of a class consisting of purchasers of the Company's securities from November 14, 1996 through January 13, 1999 for alleged violations of the federal securities laws. Specifically, the plaintiffs allege that in certain public statements and filings with the Securities and Exchange Commission the defendants made false or misleading statements and concealed material adverse information related to OraTest(R) that artificially inflated the price of the Company's common stock in violation of the federal securities laws. In February 2001, the parties entered into a settlement agreement. The settlement agreement is subject to court approval. If approved, Zila's insurers will pay the entire $5.75 million settlement amount and the litigation will be dismissed.

In an earlier Form 10-K filed for the fiscal year ended July 31, 2000, in September 2000, the Court denied the defendants' motion to dismiss the First Amended Class Action Complaint and ordered that the matter proceed to trial on the issue of liability commencing on February 26, 2001.

The original complaint charges Zila and certain of its senior officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that defendants misrepresented the status of the clinical trials and the Company's application to the FDA for approval of its OraTest(R) oral cancer detection device. During the Class Period, Zila represented that it had submitted strong and compelling evidence of the product's efficacy to the FDA and that it expected approval. On January 13, 1999, an FDA advisory panel unanimously voted against approval. One panel member said, "I cannot think of a single credible scientific organization that would accept the research offered by the company." Zila's stock plummeted 44% upon disclosure of the recommendation of non-approval.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Biotechnology & Drugs
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: ZILA
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. Arizona
DOCKET #: 99-CV-00115
JUDGE: Hon. Earl H. Carroll
DATE FILED: 01/25/1999
CLASS PERIOD START: 11/14/1996
CLASS PERIOD END: 01/13/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  2. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
COURT: D. Arizona
DOCKET #: 99-CV-00115
JUDGE: Hon. Earl H. Carroll
DATE FILED: 07/06/1999
CLASS PERIOD START: 11/14/1996
CLASS PERIOD END: 01/13/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berman DeValerio Pease & Tabacco PC
    One Liberty Square, Berman DeValerio Pease & Tabacco PC, MA 02109
    617.542.8300 ·
  2. Bernstein Litowitz Berger & Grossmann LLP (former San Diego)
    12544 High Bluff Drive, Suite 150, Bernstein Litowitz Berger & Grossmann LLP (former San Diego), CA 92130
    858.793.0070 858.793.0323 · blbg@blbglaw.com
  3. Bonnett, Fairbourn, Friedman & Balint, PC (Phoenix)
    4041 N. Cental Avenue, Suite 1100, Bonnett, Fairbourn, Friedman & Balint, PC (Phoenix), AZ 85012-3311
    602.274.1100 ·
  4. Faruqi & Faruqi LLP (New York) (former)
    320 East 39th Street, Faruqi & Faruqi LLP (New York) (former), NY 10016
    212.983.9330 212.983.9331 · Nfaruqi@faruqilaw.com
  5. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  6. Pomerantz LLP (New York)
    600 Third Avenue, Pomerantz LLP (New York), NY 10016
    212.661.1100 212.661.8665 · info@pomerantzlaw.com/
  7. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date