According to a press release dated November 03, 2010, the complaint charges Vivus and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants made false and misleading statements about the Company's weight loss drug Qnexa. More specifically, the Company failed to disclose that: (a) the studies conducted by Vivus and submitted to the Endocrinologic and Metabolic Drugs Advisory Committee of the FDA (the "FDA Panel") could not support FDA Panel approval for Qnexa's use to treat obesity as a chronic condition, and, at the very least, longer-term clinical studies would be needed to determine whether Qnexa was safe for its intended use to treat chronic obesity; (b) the trial results showed worrisome adverse effects of the type that scuttled approval for other obesity drugs, including: increased risk of suicide, cardiovascular events, and birth defects; (c) four to seven times as many patients taking the highest dose of Qnexa, compared to patients taking lower doses or placebos, dropped out of the study because of adverse side effects such as anxiety, sleep disorders, or depression; and (d) Qnexa would likely receive a "Pregnancy Category X" label from the FDA due to risks of birth defects (teratogenicity), instead of the proposed "Pregnancy Category C" label, thereby potentially eliminating a huge swath of potential Qnexa customers.
On July 15, 2010, the FDA Panel held a hearing to review Qnexa. Following the lengthy review and discussion, the FDA Panel voted against recommending Qnexa based on concerns regarding adverse effects and the unknown impact of long-term use beyond the 56-week clinical study period. The FDA Panel voted 10-to-6 in the negative on the question of whether the "overall risk-benefit assessment of Qnexa is favorable to support approval." When news of the vote was publicly announced on July 15, 2010, the market price of Vivus common stock plummeted, falling $6.70 per share, or 55%, in one day on unusually high trading volume of over 42.3 million shares. On October 28, 2010, the FDA followed the recommendation of the FDA Panel and rejected Vivus's NDA for Qnexa.
On February 2, 2011, Judge Phyllis J. Hamilton granted the motion to appoint John Ingram as lead plaintiff. Further, according to the Order, Lead Plaintiff’s choice of counsel is approved. Brower Piven, A Professional Corporation, is approved as lead counsel for the Class and Milberg LLP is approved as liaison counsel for the Class.
On April 04, 2011, an amended complaint was filed by the lead plaintiffs against the defendants. The defendants responded by filing a motion to dismiss the Amended Complaint on June 3, 2011.
According to the Order signed by Judge Hamilton on October 13, 2011, the court finds that the amended complaint fails to specify each statement alleged to have been misleading, and also fails to state the reason or reasons why each such statement is misleading. Because the court cannot ascertain from the amended complaint exactly which statements plaintiff claims were misleading, or why, the court grants the motion to dismiss, with leave to amend, and does not address the other arguments raised by defendants. The amended complaint shall be filed no later than November 9, 2011. Defendants response shall be filed no later than December 7, 2011.
On November 9, 2011, the plaintiffs filed a Second Amended Class Action Complaint. The defendants responded by filing a motion to dismiss the complaint on December 30, 2011.
On September 27, 2012, the Court issued the Order granting defendants' motion to dismiss and dismissing this action with prejudice.