According the docket posted, on October 7, 2005, the Fairness Hearing was held before U.S. District Judge Jose E. Martinez. On January 13, 2006, the Court entered the Final Judgment Order granting the motion for final approval of settlement, plan of allocation and application for attorneys' fees and reimbursement of expenses. The case is closed.
In a press release dated September 9, 2005, the action has been certified as a class action and a settlement for $2,500,000 in cash has been proposed. A hearing will be held before the Honorable Jose E. Martinez, United States District Court, Southern District of Florida, 301 N. Miami Avenue, Miami, Florida 33128 at 9:30 a.m. on October 7, 2005 (the "Settlement Fairness Hearing"), to determine whether the proposed settlement of this class action should be approved by the Court as fair, reasonable, and adequate, and to consider the application of Plaintiffs' Counsel for attorneys' fees and reimbursement of expenses.
In a press release dated May 14, 2005, generic drug maker Andrx Corp. agreed to pay $2.5 million to settle a shareholder lawsuit related to a drop in the company's stock after negative news about its version of the antidepressant Wellbutrin. Stockholders filed seven lawsuits after Andrx announced on March 5, 2003, that it would take a $26.3 million charge for generic Wellbutrin inventories that weren't sold because of Food and Drug Administration concerns over their expiration dates, according to settlement papers. In documents filed April 22 in U.S. District Court in Miami, Andrx denied any wrongdoing and said it settled the suit after concluding "that further conduct of the litigation would be protracted and expensive." The settlement must be approved by a judge at a later hearing, where shareholders' lawyers will ask for $750,000 in fees to be paid from the settlement fund, according to court papers.
By the Notice of Pendency of Class Action, the Court consolidated the seven cases by Order dated June 25, 2003. By Order dated September 4, 2003, Judge Martinez appointed Michael J. LoMedico, James Truong, Octavio Suarez and Joseph Stocke to serve as “Lead Plaintiffs,” and appointed the law firms of Berger & Montague, P.C. and the Law Offices
Bernard M. Gross to serve as co-lead counsel, and the law firm of Vianale & Vianale LLP to serve as liaison counsel. Lead Plaintiffs filed their consolidated amended class action complaint on October 20, 2003. The parties briefed and argued Defendants’ motion to dismiss, and that motion was granted without prejudice by Order dated March 8, 2004. Lead Plaintiffs filed their Second Amended Complaint on March 29, 2004. After the parties had fully briefed Defendants’ motion to dismiss that complaint, an agreement was reached to engage in mediation in an effort to
reach a settlement of the litigation. The parties attended a mediation before Honorable Nicholas Politan (Ret.) on March 8, 2005. As a result of a series of full and frank discussions, the parties reached an agreement in principle
to settle the Litigation for the sum of $2,500,000, and subsequently executed a Stipulation of Settlement dated April 22, 2005 reflecting the terms of the settlement (the “Stipulation of Settlement”).
The original Complaint, defendants artificially inflated the price of Andrx securities by failing to disclose that Andrx's generic version of Wellbutrin SR had a short expiration period and that the Company's stockpile of this drug would likely expire before the Company had obtained FDA approval to market the drug. Andrx had told investors that it expected FDA approval to market its generic version of
Wellbutrin(R) SR, an antidepressant, by year-end 2002. CEO Lane told
investors on October 31, 2002 that Andrx was "continu[ing] to build
inventories of [Wellbutrin] and other generic products prior to their
launches." No disclosure was made, however, of the drug's short
commercial life and the likelihood that if the Company's stockpile of
the drug was not soon sold, the Company would need to write off the
inventory's value or record a charge against it. On March 5, 2003,
Andrx announced that it would take a $26.3 million charge against its
generic versions of Wellbutrin(R) SR/Zyban(R) that were produced but
not marketed because of FDA concerns over the drugs' expiration dating.
Andrx would also have to resubmit its applications to produce generics
of these drugs. The Company's stock price sank 31% on the news.