NEW YORK, Dec. 27, 2004 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed a class action lawsuit in the United States District Court, Southern District of New York, on behalf of all persons or entities who purchased the securities of GeoPharma on December 1, 2004 - December 2, 2004 (the "class period"), against GeoPharma, Inc. ("GeoPharma" or the "Company") (Nasdaq:GORX) and two of the Company's senior officers.
According to the complaint, the Company and certain of its top officials issued material misstatements about FDA approval of Mucotrol, a product which is manufactured by the Company's wholly owned subsidiary, Belcher Pharmaceuticals, Inc., which manufactures both prescription and over-the-counter drugs. In a press release issued on December 1, 2004, the Company and its top officials created the impression that the Federal Food and Drug Administration ("FDA") had approved Mucotrol for marketing in this country as a prescription drug. At this announcement, GeoPharma's stock jumped up 153% to $11.25 per share. The volume of shares traded was extraordinary -- 42 million shares, for a stock whose average daily volume was 22,000. In the afternoon of December 1, 2004, the stock price dropped and trading was halted at $6.81, after it was disclosed that the FDA had told the press that it had no record of Mucotrol. The FDA later stated that it had cleared Mucotrol for marketing but only as a device, not a prescription drug. Apparently, this approval was granted because of Mucotrol's similarity with a product already on the market. On December 2, 2004, in a conference call with investors after the close of the markets, the defendants finally acknowledged that Mucotrol was a device, not a prescription drug. On this disclosure, the Company's stock fell as low as $5.37 on December 3, 2004.
The complaint alleges that GeoPharma and the Company's Chief Executive Officer, Secretary and director, Mihir K. Taneja, and Kotha Sekharam, President, principal spokesman and director of the company, were privy to non-public information concerning the Company's business, finances, products, markets and present and future business prospects through their access to internal corporate documents, conversations with and reports from other corporate officers and employees, and attendance at management and Board of Directors meetings and committees thereof. These defendants knew or but for their recklessness would have known that Mucotrol had been approved by the FDA as a device, not a drug.
GeoPharma manufactures, packages and/or distributes private label dietary supplements, overt-the-counter ("OTC") drugs, pharmaceuticals and health and beauty care products for companies under two related entitles: Innovative Health Products, Inc. and Belcher Pharmaceuticals, Inc. Innovative Health Products specializes in the development and manufacture of nutritional supplements. According to the Company, Belcher Pharmaceuticals is a FDA-registered drug development and manufacturing facility for generic and OTC drugs. On May 18, 2004, the Company changed its name from Innovative Companies, Inc., to GeoPharma, Inc.
If you purchased the securities of GeoPharma, Inc. during the Class Period, you have until January 31, 2005 to ask the Court to appoint you as one of the lead plaintiffs for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. Shareholders outside the United States may also join the action, regardless of where they live or which exchange was used to purchase the securities. If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact Teresa Webb (tlwebb@pomlaw.com) or Carolyn Moskowitz (csmoskowitz@pomlaw.com) of the Pomerantz Firm at 888.476.6529 (or 888.4.Pomlaw), toll free. Those who inquire by email are encouraged to include their mailing address and phone number.
The Pomerantz Firm, which has offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion dollar damages awards on behalf of class members.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca