According to the law firm press release, the complaint charges Impax and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Impax is a specialty pharmaceutical company engaged in the development, manufacture and marketing of bio-equivalent pharmaceutical products, or generics, in addition to the development of branded products.
Prior to the Class Period, Impax had received a warning letter from the U.S. Food and Drug Administration (“FDA”), dated May 31, 2011, related to an inspection of its Hayward, California facility, which cited problems in deviation from current Good Manufacturing Practices (“GMP”). The complaint alleges that throughout the Class Period, defendants violated the federal securities laws by disseminating false and misleading statements to the investing public in connection with their efforts to correct manufacturing deficiencies at the Company’s Hayward facility, and the impact the deficiencies would have on the Company’s ability to gain FDA approval for RYTARYTM (“Rytary”), an extended-release drug for treatment of Parkinson’s disease. As a result of defendants’ false statements during the Class Period, Impax’s stock traded at artificially inflated prices, reaching a high of $27.02 per share on October 2, 2012.
On March 4, 2013, Impax announced that the FDA had completed an inspection of the Company’s Hayward facility. The FDA’s inspection covered three areas, including a re-inspection of the Hayward facility in connection with the May 2011 warning letter to verify the implementation of corrective actions by the Company; a Pre-Approval Inspection for Rytary, as analytical method validation and a portion of the stability data was generated at the Hayward facility; and a general GMP inspection. Based on its inspection, the FDA issued a new Form 483 (a form used by the FDA to document and communicate deficiencies in a company’s quality system discovered during an on-site inspection), which stated it had found twelve problems at the Hayward facility that the Company needed to correct. The Company further indicated that due to the continuing manufacturing deficiencies, it did not expect to be able to launch Rytary until 2014. On this news, Impax’s stock plummeted $5.20 per share to close at $14.80 per share on March 5, 2013, a one-day decline of 26% on high volume.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company failed to maintain proper quality control and manufacturing practices at its Hayward facility in violation of current GMP; (b) the Company failed to take proper remedial actions to correct quality control issues previously identified by the FDA in prior inspections at the Hayward facility; and (c) the Company failed to disclose the extent of the adverse impact the manufacturing deficiencies at the Hayward facility could have on the Company’s ability to successfully launch its new drug, Rytary.
On July 2, 2013, the Court granted the motions to consolidate Mulligan v. Impax Laboratories, Inc., et
al., C-13-1037 EMC and Haverhill Retirement System v. Impax Laboratories, Inc., et al., C-13-
1566-EMC, granted Boilermaker Blacksmith National Pension Trust (Boilermaker)'s motion for appointment as lead plaintiff, and granted Boilermaker's motion for approval of class counsel.
On July 16, 2013, a plaintiff filed a Notice voluntarily dismissing plaintiff's claims without prejudice. Plaintiff's counsel also withdrew from this action.
On September 13, 2013, the lead plaintiffs filed their Amended and Consolidated Complaint.
On April 18, 2014, the Court issued an Order denying Defendants' Motion to Dismiss.