The complaint charges Flamel and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Flamel is a biopharmaceutical company that develops polymer-based delivery technologies for medical applications. Its lead product is COREG CR for use in the treatment of moderate to severe congestive heart failure, left ventricular dysfunction following myocardial infarction and hypertension.
According to the complaint, throughout the Class Period, defendants made a series of false and misleading statements regarding the prospects for COREG CR. Specifically, the complaint alleges that defendants were in possession of undisclosed clinical trial data showing that Coreg CR was no more effective than Coreg IR, the twice-daily version of the drug.
On August 23, 2007, in an article entitled “Flamel Technologies Shares Dive on Disappointing Coreg Study Results,” the Associated Press reported that a study of its once-daily heart disease drug failed to show any benefit over the twice-daily version. On this news, Flamel’s ADR price dropped from $12.68 to $9.56 per share. This decrease in Flamel’s ADR price was a result of the artificial inflation caused by defendants’ misleading statements coming out of the ADR price.
As summarized by the Company’s FORM 20-F for the fiscal year ended December 31, 2008, on November 9, 2007 a putative class action was filed in the United States District Court for the Southern District of New York against the Company and certain of its current and former officers entitled Billhofer v. Flamel Technologies, et al. The complaint purports to allege claims arising under the Securities Exchange Act of 1934 based on certain public statements by the Company concerning, among other things, a clinical trial involving Coreg CR and seeks the award of damages in an unspecified amount. By Order dated February 11, 2008, the Court appointed a lead plaintiff and lead counsel in the action. Pursuant to an agreed-upon scheduling order, the lead plaintiff, on March 27, 2008, filed an amended complaint which continued to name as defendants the Company and certain previously named officers and directors but omitted other persons who had initially been sued and asserted the same claims based on the same events as alleged in the initial complaint. On May 12, 2008, the Company filed a motion to dismiss the entire action with prejudice. That motion has been fully briefed and is awaiting resolution by the Court. None of the individual defendants named in the amended complaint have been served in the action and they did not join in the Company’s motion.
On July 01, 2010, Pursuant to Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure it was stipulated and agreed between and among the parties that one of the defendants be voluntarily dismissed without prejudice.
On September 20, 2010, the formerly appointed Lead Plaintiff Billhofer's motion to withdraw as Lead Plaintiff was granted, and another plaintiff was substituted as Lead Plaintiff in this action.
On March 6, 2012, the Court issued an Opinion granting Plaintiff's motion for class certification.
On March 8, 2013, the Court issued an Order granting defendants' motion for summary judgment. The First Amended Complaint was dismissed with prejudice.