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Case Status:    SETTLED
On or around 03/11/2009 (Date of order of final judgment)

Filing Date: October 12, 2004

The original complaint alleges that since August 2003, Chiron has supplied approximately half of the flu vaccines administered in the United States. Chiron manufactures its flu vaccine ("Fluvirin") in Liverpool, England, in a plant it acquired in July, 2003. In 2003, Fluvirin sales accounted for approximately 12% of the Company's overall revenues. During the Class Period, defendants reported impressive revenue growth, driven in material part by sales of Fluvirin during the 2003-2004 flu season. Chiron was under contract to provide its flu vaccine to the United States for the 2004-2005 flu season and represented that it would provide the U.S. market with more Fluvirin in 2004 than in 2003, as it increased production at the Liverpool plant. Unbeknownst to investors, however, serious problems at the Liverpool plant threatened Chiron's ability to provide the vaccine for the 2004-2005 flu season. Problems with the plant had been documented since 2000 by the Food and Drug Administration ("FDA"). In June 2003, the FDA documented "systemic quality-control issues" at the Liverpool plant and found high levels of bacteria in unfinished vaccines. These, and other problems, which were known to or recklessly disregarded by defendants, signaled to defendants that the plant suffered from serious issues that could lead to unsafe vaccines and/or a serious disruption in the Company's ability to produce the vaccine for the U.S. market. The complaint details additional reasons why the Company's Class Period statements were materially false and misleading.

The complaint further alleges that on October 5, 2004, Chiron announced that "the UK regulatory body, the Medicines and Healthcare Products Regulatory Agency has today temporarily suspended the company's license to manufacture Fluvirin(R) influenza virus vaccine in its Liverpool facility, preventing the company from releasing any of the product during the 2004-2005 influenza season." In reaction to this disclosure, the price of Chiron common stock plummeted from a closing price of $45.42 per share on October 4, 2004, to a closing price of $37.98 per share on October 5, 2004, a one day drop of 16.3% on unusually heavy trading volume of over 25 million shares. The Company's last-minute announcement that it would be unable to deliver Fluvirin sparked widespread concern of a U.S. flu pandemic. Numerous articles on the matter reported that significant problems at the Liverpool plant were documented by the FDA in 2000 and June 2003, while the plant was owned by another pharmaceutical company. On October 12, 2004, Chiron received a grand jury subpoena from the U.S. Attorney's office for the Southern District of New York, seeking documents and materials relating to the growing scandal. On October 13, 2004, the Wall Street Journal reported that the SEC has initiated an informal investigation of Chiron, "to determine if the company failed to adequately disclose the extent of problems at the Liverpool, England, facility that made its influenza vaccines."

According to the Company’s FORM 10-K for the fiscal year ended December 31, 2005, between October 2004 and December 2004, five securities class action lawsuits were filed against Chiron and certain Chiron officers on behalf of purchasers of Chiron securities for class periods ranging from July 23, 2003 through October 13, 2004. Four of the suits were filed in the United States District Court for the Northern District of California. One action, although originally filed in the United States District Court for the Eastern District of Pennsylvania, was later transferred to the United States District Court for the Northern District of California. In March 2005, the Court named lead counsel and plaintiff, and in April 2005, lead plaintiff filed a consolidated complaint. The consolidated complaint alleges, among other things, that the defendants violated certain provisions of the federal securities laws by making false and misleading statements from July 23, 2003 through October 5, 2004 concerning the amount of FLUVIRIN® vaccine Chiron projected to produce and Chiron’s historical and forecasted financial results, and seeks unspecified monetary damages and other relief from all defendants.

On May 25, 2005, the defendants filed a motion to dismiss the Consolidated Amended Complaint. On March 29, 2007, the parties filed a Stipulation and Agreement of Settlement. The settlement is in the amount of $30,000,000.

According to an article dated December 5, 2007, in an order rejecting a class action settlement in a securities case, San Francisco Chief District Judge Vaughn Walker ripped the firm [Milberg Weiss] for asking for too much money. … The ruling came Friday in In Re Chiron Corporation Securities Litigation, in which plaintiffs accused the drug company of not disclosing facts about its failure to bring a flu vaccine to market in 2003 and 2004. A settlement agreement of $30 million plus interest was reached in March between the plaintiffs and the drug company, which is represented by Skadden, Arps, Slate, Meagher & Flom. Walker denied Milberg's motion for preliminary settlement approval in his ruling and has set a case management conference for Dec. 20.

On November 19, 2008, a final order and an order approving a plan of allocation were filed. The final order released the claims and dismissed them against the parties on the merits and with prejudice. On November 21, 2008, an Order Awarding Attorneys' Fees approving the terms and conditions of the Stipulation and Agreement of Settlement.

COMPANY INFORMATION:

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

SECURITIES INFORMATION:

Ticker Symbol: CHIR
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: N.D. California
DOCKET #: 04-CV-04293
JUDGE: Hon. Vaughn R. Walker
DATE FILED: 10/12/2004
CLASS PERIOD START: 01/12/2004
CLASS PERIOD END: 10/04/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. DeCarlo & Connor
    533 South Fremont Avenue, 9th Floor, DeCarlo & Connor, CA 90017-1706
    213.488.4100 213.488.4100 ·
  2. Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco)
    100 Pine Street, Suite 2600, Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco), CA 94111
    415.288.4545 415.288.4534 · info@lerachlaw.com
  3. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    655 West Broadway, Suite 1900, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 ·
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 04-CV-04293
JUDGE: Hon. Vaughn R. Walker
DATE FILED: 04/14/2005
CLASS PERIOD START: 07/23/2003
CLASS PERIOD END: 10/05/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Milberg Weiss Bershad & Schulman LLP
    355 South Grand Avenue, Suite 4170, Milberg Weiss Bershad & Schulman LLP , CA 90071
    213.617.9007 213.617.9185 · info@milbergweiss.com
  2. Milberg Weiss Bershad & Schulman LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg Weiss Bershad & Schulman LLP (New York), NY 10119
    212.594.5300 212.868.1229 · info@milbergweiss.com
No Document Title Filing Date
No Document Title Filing Date