Plaintiff's law firm issued a press release on August 27, 2018. According to the press release, Lannett develops, manufactures, packages, markets, and distributes solid oral (tablets and capsules), extended release, topical, and oral solution finished dosage forms of drugs that address a wide range of therapeutic areas. Lannett also produces, through its subsidiary Cody Laboratories, Inc., active pharmaceutical ingredients. Lannett derives the majority of its revenue from the sale of drugs that are bioequivalent to certain patented drugs once their patent expires.
At all relevant times, Lannett has had an exclusivity agreement with its primary supplier, Jerome Stevens Pharmaceuticals ("JSP"), set to expire on March 23, 2019. JSP's products have historically accounted for at least one-third of Lannett's sales.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose that: (i) Lannett faced a substantial risk of the loss of its exclusivity agreement with JSP; (ii) accordingly, Lannett's reported revenues were unsustainable, and (iii) as a result, Lannett's public statements were materially false and misleading at all relevant times.
On November 30, 2018, the Court issued an Order appointing Lead Plaintiffs and Counsel. Lead Plaintiffs filed an amended Complaint on December 19. Lead Plaintiffs re-filed the amended Complaint on December 26. Defendants filed a Motion to Dismiss the amended Complaint on January 15, 2019. On March 13, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss.
On July 12, 2019, the parties entered into a Stipulation of Settlement. The Court granted preliminary approval of the Settlement on July 31.