According to the Company’s Form 10-K for the fiscal year ended March 31, 2008, on January 22, 2008, the Court appointed lead class plaintiff, and on February 6, 2008, plaintiffs filed their Consolidated Complaint. On February 26, 2008, the Company filed a Motion to Dismiss the Consolidated Complaint for failure to state a claim, and on May 20, 2008 the Court granted the Motion to Dismiss, giving plaintiffs ten days, until May 30, 2008, to amend their Complaint. Plaintiffs failed to amend their Complaint, and on June 6, 2008, the Court dismissed the case with prejudice.
The original complaint charges Micrus and certain of its officers and directors with violations of the Exchange Act. Micrus develops, manufactures, and markets implantable and disposable medical devices used in the treatment of cerebral vascular diseases.
Specifically, the complaint alleges that defendants issued materially false and misleading statements during the Class Period and failed to disclose: (i) that sales at Micrus Design, one of the Company’s key subsidiaries, were slowing dramatically and not meeting internal expectations as the subsidiary was encountering increasing competition; (ii) that the Company was experiencing increased regulatory issues in China and Japan which would delay and impede its ability to get its full complement of products approved for sale in those countries; and (iii) as a result of the foregoing, Defendants’ positive statements about the Company, its earnings, products and prospects were lacking in a reasonable basis at all times and materially false and misleading.
The complaint further alleges that on or around September 17, 2007, Micrus issued a press release announcing that it was revising its financial guidance and now expects fiscal 2008 revenues to be between $65 million and $75 million because of expected product approval delays in China as well as Japan and slower-than-anticipated sales in North America. In response to the announcement the price of Micrus common dropped from $23.57 per share to $17.37 per share on extremely heavy trading volume.
A similar, purported class action complaint has also been filed in the U.S. District Court for the Northern District of California.