According to the complaint, ViroPharma develops, licenses, and markets pharmaceutical products that address serious disease. The Company's principal product is Vancocin, an antibiotic which is used for the treatment of Clostridium Difficile Associated Diarrhea ("CDAD").
On December 14, 2011, at the beginning of the Class Period, ViroPharma issued a
press release which announced the "modernization of labeling" for Vancocin made effective through the FDA approval of a supplemental new drug application ("sNDA"). The December 14 press release quoted the statement of ViroPharma's CEO that: "This new label provides physicians a better understanding about how to treat and monitor patients suffering from the serious and often life threatening infections that require oral Vancocin therapy". According to the December 14, 2011 press release this understanding included "a specific dosing regimen for CDAD."
The Company stated in the December 14, 2011 press release, that, as a result of the changes in the Vancocin label, which provided physicians with a better understanding about how to treat and monitor patients with CDAD: "ViroPharma believes that Vancocin meets the requirements for, and thus has, three years of [marketing] exclusivity, and that generic Vancomycin capsules will not be approved during this period."
The complaint alleges that as a result of the foregoing representations in the December 14, 2011 press release, the market price of ViroPharma stock rose sharply, increasing 17.9% on heavy volume of approximately 4.8 million shares, increasing $4.21 per share, to close at $27.80 per share on December 14, 2011.
On April 10, 2012, the Company announced the FDA had told the Company that
Vanconcin's new label "would not qualify for three additional years of [market] exclusivity because it was not a "significant new use or indication." That same day, the Company revealed that the Federal Trade Commission notified the Company that it was initiating an investigation into whether the Company had engaged in "unfair methods of competition" with respect to Vancocin.
The complaint alleges that the Defendants' statements regarding market exclusivity for Vancocin, which recklessly assumed that the FDA would treat its label changes as new "conditions of use," and their failure to disclose these facts, rendered those statements materially false and misleading at all relevant times. As a result of the Company's April 10 revelations that its claim of market exclusivity was denied by the FDA because it was not a significant new use or indication, and the FDA's approval of competing generic drugs, ViroPharma shares declined $6.17 per share or 22%, to close at $22.44 per share on April 10, 2012.
On August 10, 2012, the Court issued an Order appointing lead plaintiff and approving the selection of lead counsel.
On October 19, 2012 Plaintiffs filed their Amended Class Action Complaint.
On May 16, 2014, the Court issued an Order denying defendants' motion to dismiss.
A Stipulation of Settlement was filed on April 29, 2015. This Settlement was preliminarily approved on May 7. The Settlement was granted final approval and this case was dismissed with prejudice on January 25, 2016.