Several class actions have been filed against online pharmacy drugstore.com, Inc., (Nasdaq:DSCM) and certain of its officers and directors by stockholders who purchased the company's common stock between January 20, 2004, and June 10, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

The complaint names as defendants drugstore.com, Kal Raman, Robert Barton, Peter M. Neupert and Sridhar Iyer. The complaint alleges that throughout the applicable period, the defendants issued false and misleading projections for the company’s fiscal year 2004 and second quarter 2004 earnings and overall profitability. While the market was focused on the positive guidance the defendants issued, the defendants and other company insiders sold their drugstore.com stock for millions of dollars. After selling nearly all of his holdings, defendant Raman resigned as CEO. When the company revised its profits forecast downward, its stock plummeted 38%, on usually high trading volume of 3.8 million shares, from its June 10, 2004, close of $4.91 per share to $3.06 on June 14, 2004.

If you purchased securities issued by drugstore.com during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by August 24, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.