Securities Suit Claims Endo International Misled Investors
by Erin Shaak
Last Updated on May 8, 2018
Pelletier v. Endo International PLC et al.
Filed: November 14, 2017 ◆§ 2:17-cv-05114-JP
Endo International PLC and three of its executives are facing a securities lawsuit claiming the parties failed to disclose to stockholders that the projected success of subsidiary Par Pharmaceutical Holdings, Inc. was due to allegedly illegal activity.
Endo International PLC and three of its executives are facing a securities lawsuit claiming the parties failed to disclose to stockholders that the projected success of subsidiary Par Pharmaceutical Holdings, Inc. was due to allegedly illegal activity. According to the complaint, Endo completed its acquisition of Par Pharmaceuticals on September 28, 2015, expanding its generic drug business. During the next year, the suit alleges, the defendants reported positive financial results for its generics division, assuring stockholders and potential investors of the acquisition’s success and the company’s continued growth.
On November 3, 2016, however, news outlets reported that several pharmaceutical companies, including Par Pharmaceuticals, were being targeted by U.S. prosecutors for potentially conspiring together to fix the prices of certain generic drugs. The reports noted that the companies could possibly be facing criminal charges by the end of the year. Upon this news, the complaint claims, Endo’s stock prices fell 19.48 percent.
The price of the company’s stock allegedly declined another 6.08 percent when Endo reported its 2016 year-end results on March 1, 2017, revealing a net loss of $3.35 billion. The suit argues that the negative results can be attributed to previously inflated revenues generated by Par Pharmaceutical’s potentially unlawful activities. The plaintiff claims the defendants knew Par’s seemingly successful results were “unsustainable” and argues that their false statements praising the company’s growth were misleading and unlawful.
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