Genzyme Corporation (NASDAQ: GENZ) Investor Securities Class Action Lawsuit 07/29/2009

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Company Name(s): 
Genzyme Corporation
Case Name: 
Genzyme Corporation Shareholder Class Action Lawsuit 07/29/2009
Case Status: 
Case Dismissed
Affected Securities
NASDAQ: GENZ
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
07/29/2009
Class Period Begin: 
06/26/2008
Class Period End: 
07/21/2009
Class Period Begin: 
10/24/2007
Class Period End: 
11/13/2009
Court of Filing: 
U.S. District Court for the District of Massachusetts
Deadline To File for Lead: 
09/28/2009
Case Dismissed: 
06/05/2014
Summary: 

June 5, 2014 - The U.S. Court of Appeals for the First District affirmed the decision of the district court.

January 14, 2013 - The lead plaintiffs filed a notice of appeal.

December 21, 2012 - The court denied the plaintiffs' motion for relief from final judgment and denied the motion to amend.

March 30, 2012 - The court granted defendants' motions to dismiss.

June 2, 2010 - Defendants filed motions to dismiss.

March 1, 2010 - The lead plaintiffs filed an amended consolidated complaint on behalf of investors who purchased Genzyme Corporation (NASDAQ: GENZ) common shares between October 24, 2007 and November 13, 2009. The lead plaintiffs allege that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between October 24, 2007 and November 13, 2009.

February 19, 2010 - More cases were consolidated.

November 13, 2009 - The lead plaintiff and lead counsel were appointed and all cases were consolidated.

September 28, 2009 - Lead plaintiff motions were filed.

August 3, 2009 - Another investor filed a complaint.

July 29, 2009 - An investor in shares of Genzyme Corporation (NASDAQ: GENZ) filed a lawsuit in the U.S. District Court for the District of Massachusetts on behalf of all investors who purchased or otherwise acquired Genzyme Corporation (NASDAQ: GENZ) common stock between June 26, 2008 and July 21, 2009 and alleges that Genzyme Corporation and Henri A. Termeer (President and CEO) issued a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5.

According to the complaint the plaintiff alleges that defendants concealed deficiencies at two of its manufacturing facilities, which caused a shortage in one of its top-selling products (a drug called Myozyme) and delayed approval of a new formulation of that product (a drug known as Lumizyme). The manufacturing problems also forced Genzyme Corporation to halt production of two other top-selling products (drugs called Cerezyme and Fabrazyme) due to contamination at one of the manufacturing facilities. A prior investigation by another law firm focused on potential state and federal securities claims against Genzyme Corporation in connection with allegations that the company failed to promptly disclose that the Food and Drug Administration delayed approval for Lumizyme, which is one of the Genzyme Corporation’s key products. The company provided a progress update on February 23, 2009, confirming that all corrective actions had either been completed or were on schedule to be completed by the original commitment date of March 31, 2009. But on February 27, 2009, so the investigation, Genzyme Corporation received two letters from the Food and Drug Administration.

The first letter stated that the Food and Drug Administration agency would not approve Lumizyme, to treat a rare genetic disorder called Pompe disease, before a deadline of February 28, 2009, as expected. The second letter stated that the Food and Drug Administration still had significant problems with the manufacturing plant where Lumizyme is made, which Genzyme Corporation had not corrected. According to the Food and Drug Administration warning letter Genzyme Corporation did not update its computerized manufacturing system for Fabrazyme, a treatment for Fabry disease, and ran an aseptic filling line at an unvalidated line speed. The letter cites operations at Genzyme Corporation’s plant in Allston, Massachusetts, which manufactures several of Genzyme Corporation’s best-selling biologics, like Gaucher’s disease treatment Cerezyme (imiglucerase), Myozyme (alglucosidase alfa) for Pompe disease and Fabrazyme.

According to the investigation Genzyme Corporation failed to disclose this information until after the close of trading on March 2, 2009 and that Genzyme Corporation stated that the delay would lower its 2009 profit by about 12 cents per share. As a result of this news the price of Genzyme Corporation shares fell to $53.66 on March 3, 2009, a three-day decline of over 23%, so the investigation.

The plaintiff alleges now that the company took too long to disclose “serious issues” that federal inspectors first found last fall at the company’s drug-making plants in Boston and Belgium. On July 22, 2009, Genzyme Corporation announced a reduction of its earnings and revenue forecasts for 2009, including its revenue projections for Myozyme, Cerezyme and Fabrazyme, due to the impact of the facility shutdown and between June 26, 2008 and July 21, 2009, Genzyme Corporation's stock has fallen over 35%, resulting in a loss of over $8 billion to investors.

Genzyme Corporation, based in Cambridge, Massachusetts, is a biotechnology company. Genzyme Corporation operates in four segments: Genetic Diseases, Cardiometabolic and Renal, Biosurgery and Hematologic Oncology. Genzyme Corporation reported in 2007 Total Revenue of $3.81352 billion with a Net Income of $480.19 million and in 2008 Total Revenue of $4.60504 Billion with a Net Income of $421.08 Million. Shares of Genzyme Corporation (NASDAQ: GENZ) traded at $54.94 per share, down from a 52 week High of $83.97 per share.