Gilead Shareholders Must Amend Suit For 5th Time

Gilead Shareholders Must Amend Suit For 5th Time - 6/3/2009

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News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

Gilead Shareholders Must Amend Suit For 5th Time
Christine Caulfield

Securities Law 360. June 3, 2009
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EXCERPT: Citing contradictory witness testimony, a federal judge agreed Wednesday to partially dismiss a consolidated securities class action against Gilead Sciences Inc. but granted the shareholder plaintiffs leave to revise their fourth amended complaint. Judge Susan Illston of the U.S. District Court for the Northern District of California ruled that statements in the complaint by a confidential plaintiff witness – a former Gilead sales representative - were inconsistent with earlier statements in a preceding complaint and could not be relied on. Gilead's motion to dismiss the suit was set for a hearing Friday, but Judge Illston ruled the scheduled oral argument unnecessary and vacated the hearing. She ordered the plaintiffs to file a fifth amended complaint by June 26. The fourth amended complaint accuses Gilead of concealing its reliance on illegal off-label marketing to sell its popular HIV drug Viread, a material omission that ultimately led to a drop in the company's stock. Gilead argued in its motion that the complaint failed to adequately plead the requisite falsity, intent and materiality, relying as it did on two unreliable witnesses who alleged that 75 percent to 95 percent of Viread's sales in the second quarter of 2003 were off-label. The company argued that statements by one of the two witnesses – that her sales were largely off-label - directly contradicted the same witness' statements in an earlier complaint that she refused to make off-label sales. The plaintiffs countered that the credibility of the witness, known as CW2, could not be assessed on a motion to dismiss and that her statements were corroborated by other allegations, including letters from the U.S. Food and Drug Administration and testimony from anonymous medical practitioners. Judge Illston sided with Gilead, saying the plaintiffs had provided no explanation for the change in the witness' allegations.

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