'Baseless' Shareholder Action V. Biovail Tossed

'Baseless' Shareholder Action V. Biovail Tossed - 5/11/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

'Baseless' Shareholder Action V. Biovail Tossed
Christine Caulfield

Securities Law 360. May 11, 2009
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EXCERPT: A federal judge has dismissed a proposed shareholder class action accusing Biovail Corp. of misleading investors about the antidepressant Aplenzin, calling the lawsuit a “prime exemplar of a legally baseless securities strike suit.” Judge Colleen McMahon of the U.S. District Court for the Southern District of New York on Friday granted Biovail's motion to toss the amended complaint in its entirety, saying the action was the very sort Congress wanted to discourage when it enacted the Private Securities Litigation Reform Act in 1995. The complaint, first filed by the Fort Worth Employees Retirement Fund in October 2008, alleges that three public statements by the Canadian drugmaker between March 2007 and May 2007 about then-new Aplenzin failed to adequately disclose the risk that the U.S. Food and Drug Administration might delay or withhold approval. The original suit alleges that Biovail and three of its officers violated securities laws by failing to disclose that the company had submitted with its new drug application to the FDA a multiple-dose study to demonstrate Aplenzin's bioequivalence when the agency preferred a single-dose study. An amended complaint, filed in December, claims that the defendants knew but concealed the fact that Biovail's reliance on the multiple-dose study increased the risk of FDA rejection. The pharmaceutical company did not reveal what it knew until July 20, 2007, when it announced that the FDA had declined to approve Aplenzin. The announcement sent the company's stock falling from $25.51 a share to $20.03 a share that day, according to the suit. The allegation mischaracterized a publicly available FDA letter to Biovail on Dec. 14, 2006, that a single-dose study was the preferred approach for abbreviated new drug applications that had been submitted by Biovail competitors seeking approval for generic versions of Wellbutrin, a separate Biovail drug, Judge McMahon said.

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