Dura Pharmaceuticals Inc. Case 07/21/2006

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Company Name(s): 
Dura Pharmaceuticals
Case Name: 
Dura Pharmaceuticals Inc. Case 07/21/2006
Case Status: 
Lawsuit Filed
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
07/21/2006
Class Period Begin: 
04/15/1997
Class Period End: 
02/24/1998
Summary: 

According to a press release a shareholder has filed a lawsuit on behalf of a class of all persons that purchased Dura securities from April 15, 1997 through February 24, 1998. In September 2000 plaintiffs filed their Second Consolidated Amended complaint, which was dismissed by the district court. Plaintiffs appealed this decision to the Ninth Circuit Court of Appeals, which reversed the district court’s dismissal, but the Supreme Court subsequently reversed the Ninth Circuit and the case was remanded to the district court.
 
The plaintiffs allege that Dura and several of its top officers made false and misleading statements about the sales of Dura’s “Ceclor CD” antibiotic product and about the status of its new “Albuterol Spiros” device for delivering asthma medicine. According to the complaint, Dura falsely represented that Ceclor CD antibiotic sales were increasing even though Dura knew they were actually dropping. By late 1997 Dura’s sales channels were jammed with months of unsold inventory. The complaint also alleges that Dura falsely represented that completed tests showed its Albuterol Spiros drug-delivery system, designed to aerosolize a powdered form of the asthma drug Albuterol so that it could be inhaled easily, was effective and poised for Food & Drug Administration approval. In truth, however, clinical trials and in-house testing had shown that the device did not work properly.
 
On remand the, the plaintiffs’ filed a Third Consolidated Amended Complaint. On June 2, 2006, after briefing and oral argument, the District Court granted in part and denied in part defendants’ motion to dismiss this complaint. The Court found that Plaintiffs had adequately alleged loss causation, as required by the Supreme Court’s decision in the case, but that certain of the Plaintiffs’ allegations remained deficient. Plaintiffs were granted leave to amend and, on July 21, 2006, they filed a Fourth Consolidated Amended Complaint.
 
On February 20, 2008 the district court denied Defendants’ motion to dismiss the principal allegations against them in the Fourth Consolidated Amended Complaint. The Defendants filed an Answer to the Complaint on May 16, 2008. The parties are now engaged in discovery.