Alkermes plc (Nasdaq: ALKS)
The complaint charges Alkermes and certain of its officers with violations of the Securities Exchange Act of 1934. Alkermes is a biopharmaceutical company focused on the treatment of central nervous system disorders such as addiction, schizophrenia and depression. The Company’s products include Vivitrol (naltrexone for extended-release injectable suspension), a once-monthly injectable medication approved for the treatment of alcohol dependence and for the prevention of relapse to opioid dependence following detoxification.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and operations, including that Alkermes was engaging in deceptive marketing practices to influence policymakers to use Vivitrol in addiction treatment programs over more scientifically proven and efficacious alternatives, which practices, when disclosed, would subject Alkermes to heightened regulatory and legislative scrutiny. Accordingly, the revenues Alkermes derived from Vivitrol during the Class Period as a consequence of these deceptive marketing practices were unsustainable. As a result of defendants’ false statements and/or omissions, Alkermes securities traded at artificially inflated prices during the Class Period, with its stock reaching prices of more than $80 per share.
On June 11, 2017, The New York Times published an article entitled “Seizing on Opioid Crisis, a Drug Maker Lobbies Hard for Its Product.” The article described Alkermes’ aggressive efforts to market Vivitrol while denigrating the efficacy of other addiction treatments, stating that “despite scant science to prove the drug’s efficacy,” Vivitrol’s sales and profile were rising fast, “thanks to its manufacturers’ shrewd use of political connections.” On this news, the price of Alkermes stock fell $2.19 per share, or more than 3.5%, to close at $59.47 per share on June 12, 2017.
Then on November 6, 2017, U.S. Senator Kamala Harris announced the opening of an investigation into Alkermes’ sales practices for Vivitrol. Senator Harris specifically stated that the Company “aggressively marketed” the medication, convincing judges and prison officials to use it rather than more proven addiction-treatment products, and spent hundreds of thousands of dollars lobbying policymakers. According to Harris, Alkermes promoted Vivitrol by using a “speaker’s bureau composed of doctors paid to promote the drug.” On this news, the price of Alkermes stock fell $2.23 per share, or more than 4.3%, to close at $48.76 per share on November 6, 2017.
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