According to the Company’s Form 10-K for the fiscal year ended December 31, 2004, several securities fraud class action complaints were filed in March 2002, alleging that the Company and certain of its current and former officers and directors engaged in securities fraud and/or made material misrepresentations regarding the regulatory status of the Company’s ANDA for a generic version of Tiazac. The amended class action complaint sought a class period for those persons or institutions that acquired our common stock from April 30, 2001, through February 21, 2002. In November 2002, the U.S. District Court for the Southern District of Florida granted in part the Company’s motion to dismiss the amended consolidated class action complaint and determined that all but one of the statements allegedly made in violation of the federal securities laws should be dismissed as a matter of law. The Court’s decision reduced the class period to six weeks commencing January 9, 2002, and ending February 21, 2002. The Court also later granted the Company’s motion to strike all allegations of insider trading from the complaint. In December 2003, defendant’s motion for summary judgment was granted and a final judgment was entered in favor of the defendants. The plaintiffs have filed a of appeal of the motion to dismiss and the summary judgment orders. On August 6, 2004, the Court entered a final judgment and granted final approval of the settlement stipulation entered by the defendants and the class members.
By the Notice of Pendency, the settlement established was in the amount of $544,500.
The Complaint alleges that Andrx and certain of its directors and officers 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 to the market during the Class Period, thereby artificially inflating the price of Andrx common stock. Specifically, the Complaint alleges that Andrx issued a series of
statements concerning its generic version of the drug Tiazac(R) that the
only thing holding up the drug from reaching the market was continuing
patent litigation with Biovail Corp. in connection with Tiazac(R). The
defendants failed to disclose that in fact, Andrx had difficulty making
a stable version of generic Tiazac(R), including that it had amended
its original application to the FDA thirteen times. When Andrx
announced on February 21, 2002 that the FDA had raised "certain issues"
concerning the generic Tiazac(R), Andrx's stock price dropped from
$42.61 per share on February 21, 2002 to $34.96 per share on February
22, 2002, on volume of 15,767,100 - over seven times the prior day's