Stockholders v Ligand Pharmaceuticals, Inc.
Ligand Pharmaceutical’s drug AVINZA Not as Profitable as Reported
A class action has been filed against Ligand Pharmaceuticals, Inc., a San Diego, CA based biopharmaceutical company (NASDAQ: LGND) and certain of its officers and directors by stockholders who purchased the company's common stock between July 28, 2003 and August 2, 2004. The action claims 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.
Specifically, the complaint alleges that Ligand misrepresented the sales of AVINZA, a pain relief drug through press releases and SEC filings and provided false information on joint projects the Company had with Glaxo Smith Kline and Eli Lilly. On August 3, 2004, the Company posted a second quarter loss of $14.2 million and revealed that Deloitte & Touche, its independent auditors, had resigned for undisclosed reasons after a four-year relationship. The announcement caused the Company's stock to fall $5.38 per share, approximately 40%, to $8.17 per share.
In addition, the stockholders allege that Maier and other insiders sold 44,000 shares of stock during the class period for gross proceeds totaling $833, 302 based on information not revealed to stockholders. The stockholders are suing for violations of Section 10(b), 20(a) and Rule 10b-5 of the Securities and Exchange Act and seek compensatory damages for the devaluation of their stock, costs of the action and extraordinary, equitable or injunctive relief.
