BALA CYNWYD, Pa., Sept. 4, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the on behalf of all purchasers of the common stock of First Horizon Pharmaceutical Corporation ("First Horizon" or the "Company") (Nasdaq:FHRX) between April 24, 2002 through July 2, 2002, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges First Horizon Pharmaceutical Corporation and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that on April 24, 2002, First Horizon completed a public offering of securities, selling 6.5 million shares of common stock at an offering price of $21.75 per share, pursuant to a Prospectus declared effective by the SEC on April 18, 2002. The Company failed to disclose material information in the Prospectus relating to two products, Tanafed Suspension (a pediatric liquid and allergy product) and Prenate GT (a prescription prenatal vitamin). The Company touted the market for these products highly in its Prospectus. However, the market for these products was severely declining and defendants had flooded wholesalers with Prenate GT inventory in the first quarter of 2002 in order to report strong sales prior to the secondary offering. Belatedly, defendants disclosed that due to price erosion arising from generic competition, First Horizon's products had not been widely accepted by the market. In addition, sales growth from the Company's newly acquired "Sular" drug line had failed to yield strong results, and a promised redeployment of First Horizon's sales force similarly failed to boost First Horizon's bottom line.
As a result of the Company's misrepresentations, First Horizon investors have sustained tremendous losses, and stand to lose much more as the Company's financial condition continues to decline. On July 2, 2002, the Company shocked the market by revealing that for the second quarter of 2002, the Company expected to report revenues of between $25 and $26 million, and earnings per share between $0.00 and $0.02, excluding a $2.2 million debt write-off. For the full year, First Horizon revised its guidance to $0.34 a share, a far cry from its earlier guidance of $0.56 to $0.57 a share. A July 2, 2002 press release attributed the massive shortfall mainly to "greater than expected erosion of sales in the second quarter" of Tanafed and Prenate GT, as well as "distraction" arising out of a sales force "realignment."
In response to the Company's devastating news concerning the lack of acceptance of two of the Company's key products, First Horizon's stock price plummeted by an astonishing 81% or by $14.74 to $3.51, on volumes of 16.4 million shares, about 30 times the daily average
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, LLP, which prosecutes class actions on behalf of investors and shareholders. For more information on Schiffrin & Barroway, or to sign-up to participate in this action online, please visit http://www.sbclasslaw.com/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than October 30, 2002, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca