According to a press release dated March 17, 2005, in February 2005, the lead plaintiffs filed an Agreed Motion and Proposed Order of Voluntary Dismissal in In re Noven Pharmaceuticals, Inc. Securities Litigation. On March 15, 2005, United States District Judge Patricia A. Seitz granted the plaintiffs' Agreed Motion and entered an Order voluntarily dismissing this lawsuit without prejudice.
The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities.
Specifically, the complaint alleges that defendants' false and misleading statements
regarding the rationale and marketing strategies for approval of MethyPatch(R)
permitted Noven to artificially inflate the value of its technology to
shareholders and thereby minimize the impact of financial uncertainties
relating to serious marketed product issues during the Class Period. Moreover,
it allowed defendants to reap bonuses and insider trading proceeds. The facts, which were known by each of the defendants but concealed from
the investing public during the Class Period, were as follows: (a)
MethyPatch(R) did not possess the safety and efficacy of immediate release oral
methylphenidate products; (b) The utility and advantages for MethyPatch(R) had
been misrepresented by pointing to unmet needs and product advantages that did
not and would not exist by the time Noven expected NDA approval; (c) The FDA
was aware of the reasons why MethyPatch(R) would not be considered as safe or
efficacious as Noven had claimed; (d) Transdermal drug delivery systems have
been the source of serious medication errors that would complicate the
product's contemplated use; and (e) For one or more reasons related to the
safety or efficacy of the product, the MethyPatch(R) NDA submitted on June 27,
2002 would not be "approvable" as submitted. As a result of the defendants'
false and misleading statements, Noven's stock traded at inflated prices during
the Class Period, increasing to as high as $27.45 on June 17, 2002, whereby the
Company's top officers and directors reaped bonuses and insider trading
proceeds, selling more than $500,000 worth of their own shares.