Philadelphia, Pa. – June 19, 2008 (LAWFUEL) – Pepper Hamilton LLP recently secured major victories for biotechnology and pharmaceutical clients in three separate securities class actions in a 10-day period. Representing Discovery Laboratories, Inc., Eli Lilly and Company and GlaxoSmithKline, the firm won dismissals from three federal courts between April 29 and May 9, 2008.
“Pharmaceutical securities litigation is different than securities cases in other industries because the industry is heavily regulated by the Food and Drug Administration, which allows a lot of information to fall into the public arena and be available to investors quickly,” said Robert L. Hickok, a partner with Pepper Hamilton and a leader of its securities litigation practice.
He continued, “There is high potential for risk in the industry. If the FDA does not approve a company’s product or issues a safety alert regarding a drug that is already on the market, the company’s stock price may drop, causing investors concern. Our job, as defense attorneys, is to explain how the FDA works so that the judge can evaluate a company’s disclosures within the proper context. Pepper Hamilton’s long history of representing pharmaceutical clients, our extensive knowledge of the FDA process, and the depth of our securities litigation practice in general are tremendous assets. These three recent victories illustrate that.”
On April 29, 2008, the U.S. Court of Appeals for the Third Circuit affirmed the district court’s dismissal of In re Discovery Laboratories Securities Litigation, a securities class action filed against Discovery Laboratories, Inc. (www.discoverylabs.com), a biotechnology company developing Surfactant Replacement Therapies for respiratory diseases. The complaint alleged that Discovery Labs misled investors about the prospects for regulatory approval of its lead product, Surfaxin®, for the prevention of Respiratory Distress Syndrome in premature infants.
In 2007, before Judge Stewart Dalzell of the U.S. District Court for the Eastern District of Pennsylvania, Pepper Hamilton won motions to dismiss the plaintiffs’ first and second amended securities class action complaints, as well as a motion to dismiss a separately filed derivative action.
The Pepper Hamilton team representing Discovery Labs in the litigation included partners Robert L. Hickok, Gay Parks Rainville and Christopher J. Huber; of counsel James D. VandeWyngearde; and associates Thomas T. Watkinson II and Michele C. Zarychta.
Eli Lilly and Company’s (www.lilly.com) victory occurred in the Zyprexa® litigation pending in the U.S. District Court for the Eastern District of New York. In In re Eli Lilly and Company Securities Litigation, a securities class action involving Lilly’s atypical antipsychotic medication Zyprexa®, the court granted Lilly’s motion for summary judgment and dismissed all of the plaintiffs’ federal securities fraud claims on statute of limitations grounds.
In their complaint, the plaintiffs alleged that articles published in The New York Times in December 2006 reported for the first time that Zyprexa allegedly presents a higher risk of diabetes-related conditions than do other atypical antipsychotic medications, and that Lilly allegedly engaged in “off-label” promotion of the medicine.
In his April 30, 2008 opinion, Judge Jack B. Weinstein of the U.S. District Court for the Eastern District of New York held that the class action was time-barred since both issues were publicly debated by scientists, investment analysts and members of the legal profession long before the two-year statute of limitations began to run on plaintiffs’ claims on March 28, 2005.
The Pepper Hamilton team representing Lilly in the litigation included partners Robert L. Hickok, Gay Parks Rainville, Christopher J. Huber and Kenneth J. King; and associates Andrea Toy Ohta, Elizabeth M. Ray, April Denise Seabrook, Thomas T. Watkinson II, Michele C. Zarychta, Amber M. Schuknecht and Andrea M. de Vries.
In Borochoff, et al. v. GlaxoSmithKline, et al., a federal district judge granted GlaxoSmithKline’s (www.gsk.com) motion to dismiss the securities class action filed by investors alleging that GSK’s statements about its diabetes medicine, Avandia®, were false and misleading.
Judge Louis L. Stanton of the U.S. District Court for the Southern District of New York dismissed the case on May 9, 2008, and denied the plaintiffs’ request to replead. The court held that the complaint failed to sufficiently plead that the defendants made any material misrepresentation or omission or acted with fraudulent intent. The plaintiffs recently filed a motion asking the court to reconsider its decision.
The Pepper Hamilton team representing GSK in the litigation included partners Robert L. Hickok, Gay Parks Rainville, Michael E. Baughman and Kenneth J. King; and associates Patricia A. McCausland, William C. Root and Aubrey L. Jones.
About Pepper Hamilton
Pepper Hamilton LLP (www.pepperlaw.com) is a multi-practice law firm with more than 500 lawyers in seven states and the District of Columbia. The firm provides corporate, litigation and regulatory legal services to leading businesses, governmental entities, nonprofit organizations and individuals throughout the nation and the world. The firm was founded in 1890.
Pepper Hamilton’s securities litigation practice includes representing corporations, their directors and officers, investment bankers and accountants in civil, criminal and administrative proceedings regarding corporate governance and the issuance and trading of securities. The firm’s practice takes it before federal and state courts and administrative agencies in jurisdictions throughout the United States. Pepper lawyers also are experienced in representing clients in investigations and litigation by the U.S. Securities and Exchange Commission.
Pepper Hamilton works with many biotechnology and pharmaceutical companies and has extensive experience defending them in securities class action litigation. Pepper lawyers know and understand the drug development and regulatory approval processes, and provide the courts with the context they need for fairly assessing the disclosures at issue.
The firm’s commercial litigators often draw upon the experience of their health effects litigation colleagues, whose deep expertise in the industry helps make the firm’s representations more effective. Members of the Health Effects Litigation Practice Group, led by partner Nina M. Gussack, counsel clients and handle litigation involving claimed adverse health effects from ingestion of or exposure to pharmaceuticals, medical devices, radiation, chemicals, consumer goods, environmental substances and industrial equipment.