Shareholder Class Action Filed Against Mallinckrodt plc - MNK
RADNOR, Pa., Jan. 24, 2017 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP announces that it has filed a shareholder class action lawsuit against Mallinckrodt plc (NYSE: MNK) ("Mallinckrodt" or the "Company") on behalf of purchasers of the Company's securities between November 25, 2014 and January 18, 2017, inclusive (the "Class Period"). The action was filed in the U.S. District Court for the District of Columbia and is captioned Shenk v. Mallinckrodt plc, et al., No. 1:17-cv-00145.
Investors who purchased Mallinckrodt securities during the Class Period may, no later than March 27, 2017, petition the Court to be appointed as a lead plaintiff representative of the class. For additional information, or to view a copy of the complaint, please visit https://www.ktmc.com/new-cases/mallinckrodt-plc#join
Mallinckrodt investors who wish to discuss this action and their legal options are encouraged to contact Kessler Topaz Meltzer & Check (Darren J. Check, Esq., D. Seamus Kaskela, Esq. or Adrienne O. Bell, Esq.) at (888) 299 – 7706 or at [email protected].
Mallinckrodt develops and produces specialty pharmaceutical products, including generic drugs and imaging agents, and has in excess of $3.3 billion in annual revenue.
On August 14, 2014, Mallinckrodt acquired Questcor Pharmaceuticals, Inc. ("Questcor") in a $5.6 billion transaction. As a result of the acquisition, Mallinckrodt added HP Acthar Gel ("Acthar"), an injectable medication made from pigs' pituitary glands, to its drug portfolio. Acthar is the only approved therapeutic preparation of adrenocorticotropic hormone ("ACTH") in the U.S., and is approved by the U.S. Food and Drug Administration ("FDA") as a treatment for 19 different conditions, including infantile spasms, and difficult-to-treat autoimmune and inflammatory conditions. Given the monopoly status of Acthar in the U.S. market, Questcor, and later Mallinckrodt, repeatedly increased the price of Acthar 85,000% from $40 per vial in 2001 to over $34,000 per vial in 2017.
The complaint alleges that, throughout the Class Period, Mallinckrodt and its Chief Executive Officer ("CEO"), Mark Trudeau ("Trudeau"), made a series of false and misleading statements and failed to disclose material adverse facts about the long-term sustainability of the Company's monopolistic Acthar revenues and the exposure of Acthar to reimbursement rates by Medicare and Medicaid. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that Acthar's monopoly status as the only FDA-approved ACTH preparation was the product of unlawful anticompetitive practices and failed to disclose that its increasing reliance on Medicare and Medicaid meant that the Company's monopolistic Acthar revenue would be threatened if the government took action to limit the price paid for this drug by taxpayers.
The truth about the Company's dependence on Medicare and Medicaid for Acthar revenue began to surface on November 9, 2015, when Citron Research ("Citron") issued a statement on Twitter comparing Mallinckrodt to Valeant Pharmaceuticals International, Inc. In the wake of the Citron comment, Mallinckrodt's stock price fell 17% from a close of $69.89 per share on November 6, 2015, to close at $58.01 per share on November 9, 2015.
Subsequently, on November 16, 2016, Citron published a report (the "Citron Report") accusing Trudeau and the Company of securities fraud in connection with Trudeau's statements downplaying the Company's reliance on Medicare and Medicaid for Acthar revenue. Among other things, the Citron Report reported that payments from Medicare and Medicaid comprised a substantially larger percentage of Acthar sales than Trudeau previously represented. In the wake of the Citron Report, Mallinckrodt's stock price fell 18.4% from a close of $67.80 per share on November 15, 2016, to close at $55.32 per share on November 17, 2016.
Further information regarding the Company's reliance on Medicare and Medicaid for Acthar revenue was revealed on November 29, 2016. During a conference call with investors on this date, Trudeau admitted that "Acthar now represents a significantly greater proportion of our operating income than one-third." On this news, Mallinckrodt's stock price declined 9.1% from a close of $57.67 per share on November 28, 2016, to close at $52.42 per share on November 29, 2016.
The truth about the Company's anticompetitive and unlawful efforts to prevent an alternative ACTH treatment from reaching the U.S. market was fully revealed on January 18, 2017, when the FTC announced that Mallinckrodt had agreed to pay $100 million in connection with a joint settlement with the FTC and several states. The news of the settlement, and the fact that Mallinckrodt would lose its ACTH monopoly in the U.S., caused the Company's stock price to decline 5.85% from a close of $49.42 per share on January 17, 2017, to close at $46.53 per share on January 18, 2017.
Mallinckrodt shareholders may, no later than March 27, 2017, petition the Court to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class in the action. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff. For additional information, or to view a copy of the complaint, please visit https://www.ktmc.com/new-cases/mallinckrodt-plc#join
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). For more information about Kessler Topaz Meltzer & Check, or for additional information about participating in this action, please visit www.ktmc.com.
CONTACT:
Kessler Topaz Meltzer & Check, LLP
Darren J. Check, Esq.
D. Seamus Kaskela, Esq.
Adrienne O. Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(888) 299-7706
(610) 667-7706
[email protected]
SOURCE Kessler Topaz Meltzer & Check, LLP
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