Investor to sue Teva for NIS 2 billion

Claimant says Teva gave misleading information about publication of results of Phase III clinical trial of its oral multiple sclerosis treatment, Laquinimod.

By TZAMERET PERNAT/GLOBES
April 15, 2011 05:32
2 minute read.
Drug company

Pharmacist pouring something 58. (photo credit: NATI SHOHAT/FLASH90)

A Teva Pharmaceutical Industries Ltd. shareholder on Thursday filed a request for a NIS 2 billion class-action lawsuit against the company, claiming it gave misleading information about the publication of the results of the Phase III clinical trial of its oral multiple sclerosis treatment, Laquinimod.

In the statement of claim, the claimant says Teva on Monday had notified the Tel Aviv Stock Exchange it would present new information about the results of a study on drugs and treatments for multiple sclerosis and Parkinson’s disease, among other things. He says the notice had stated the information would be presented at the American Association of Neurology Annual Meeting in Honolulu, Hawaii.

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The claimant says 30 percent of Teva’s revenue comes from its multiple sclerosis treatments, especially sales of Copaxone, which totaled $3.3 billion in 2010. Since the Copaxone market has been opened to competition, which will severely affect Teva’s sales, Teva began development of Laquinimod to compensate for the drop in its profits and to keep its share of the market for multiple sclerosis drugs, it says.

Teva first presented to the 5,000 participants at the conference a synopsis of the results of the clinical trials without notifying the public, thereby contravening its notice to the TASE, which stated that the information would be published at later dates, the claimant says. As a result, he says, participants at the conference had obtained an unfair advantage over other Teva shareholders, and rumors spread about the results of the trial, which caused Teva’s share price to fall 3.4%.

The claimant says Teva lent its hand to a situation in which crucial information that could substantially affect the value of its shares was liable to leak, as in fact happened, in a manner that would cause it to be abused, as in fact happened.

Teva was negligent and as a result had misled investors, he says.

“Teva acts, including in this case, in accordance with the Securities Law and reporting requirements that apply to it,” Teva said in response. “Teva has not received the statement of claim, and when it arrives, Teva will study it. On the face of it, however, based on information published in the media, it appears that the lawsuit and request to recognize it as a class-action suit are baseless.”


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