On September 04, 2008, a notice of appeal was filed by the Plaintiffs. On October 10, 2008, a mandate was made withdrawing the notice of appeal.
The Court appointed Avon as lead plaintiff, on October 5th, ahead of a group of competing German investors that had also sought to be appointed the lead plaintiffs. US securities law firm, Coughlin, Stoia, Geller, Rudman and Robbins LLP has been appointed lead counsel in the case. This is the first time that a UK local authority Pension Fund has been appointed lead plaintiff in a case against a UK listed company.
On November 13, 2007, the plaintiffs filed an Amended Complaint. Defendants filed a motion to dismiss one month later, on December 13, 2007. After hearing arguments on the motion, the judge granted the request for dismissal and denied plaintiffs' request to replead, citing that "plaintiffs do not sufficiently plead scienter, and the statements plaintiffs identify as false and misleading are forward-looking statements and thus are not actionable." On May 28, 2008, the plaintiffs filed a Motion for Reconsideration on the Order on the Motion to Dismiss. On August 12, 2008, an Opinion And Order was made denying the Motion for Reconsideration on the Order on Motion to Dismiss, filed by the Plaintiffs.
The original Complaint alleges that during the Class Period defendants, GlaxoSmithKline PLC and certain of its officers, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by publicly issuing a series of false and misleading statements regarding Avandia, GSK's popular diabetes drug. In particular, the Complaint alleges that GSK failed to adequately disclose the fact that it had performed a meta-analysis (a pooled analysis of several clinical trials) related to Avandia which showed an increased risk of heart attacks. Preliminary results of this analysis were presented to the FDA in September 2005 and updated results were disclosed to the FDA in August 2006. However, the results of GSK's meta-analysis were never adequately disclosed to the investing public.
As alleged in the Complaint, on May 21, 2007, before the close of trading, the results of a meta-analysis on Avandia conducted by a doctor with the Cleveland Clinic was reported and published in the New England Journal of Medicine (the "Journal"). Similar to GSK's meta-analysis conducted in 2005 and 2006, the results of the meta-analysis published in the Journal revealed that Avandia increased the risk of heart attacks and possibly heart-related deaths. As a result of the reports regarding the meta-analysis, the price of GSK securities declined US$4.53 per share, or 7.8%, to close at US$53.18 per share, on unusually heavy trading volume.
On September 18, 2009, upon consideration of plaintiffs' arguments on appeal, the appellate court concluded that they are without merit. Accordingly, the judgment of the district court was affirmed.