SAN FRANCISCO, Dec. 1, 2014 (GLOBE NEWSWIRE) -- Hagens Berman Sobol Shapiro LLP, a national investor-rights law firm, reminds investors of the upcoming Lead Plaintiff deadline in the lawsuit filed against Salix Pharmaceuticals, Ltd. (Nasdaq:SLXP) ("Salix" or "the Company"). The suit is pending in U.S. District Court for the Southern District of New York, and investors have until January 6, 2015 to move for lead plaintiff.
The complaint was filed on behalf of investors who purchased SLXP securities between November 7, 2013 and November 6, 2014 (the "Class Period"). If you purchased shares of Salix during the Class Period, you may contact Hagens Berman Partner Reed Kathrein, who is leading the firm's investigation, by calling (510) 725-3000, emailing SLXP@hbsslaw.com or visiting http://hb-securities.com/investigations/SLXP. No class has been certified in this case. Any member of the Class who purchased shares in the relevant time period may ask the Court to appoint them as lead plaintiff.
On November 6 and 7, 2014, Salix disclosed that: (1) its CFO, Adam C. Derbyshire, had abruptly resigned; (2) its wholesaler inventory levels were three times greater than previously reported and the Audit Committee of Salix's Board of Directors had retained outside counsel as part of an inquiry into the Company's reporting of wholesale inventory of Xifaxan and other drugs; and (3) its previously issued guidance for full-year 2014 revenues would not be met and needed to be reduced by 12.5 percent. As a result, the Company's stock price fell $47.08 per share, to close at $91.47 per share.
During the conference call immediately after this revelation, one analyst asked, "[G]iven your comments on inventory during the last couple of calls, how can we now say that those comments were not misleading." In response, CEO Logan, who sold $6.5 million in Salix stock in June, stated, "…unfortunately, we really can't comment on that…."
The Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose that demand for Xifaxan and other Salix products was decreasing while at the same time, wholesaler inventory levels of the drugs were significantly greater and rising more rapidly than represented to investors. The complaint further alleges that the Company's reserves for outstanding inventory were understated. As a result of this understatement, the complaint alleges that Salix's reported quarterly and annual net revenue and earnings per share figures were overstated, and the disclosure controls and procedures and internal controls over financial reporting and accounting were subject to material weaknesses. Insiders appear to have sold as much as $16 million in Salix stock during the Class Period.
"Playing games with inventory is a common trick to cover-up losses," said Hagens Berman partner Reed Kathrein. "Salix's actions certainly look like insiders trying to benefit at the expense of shareholders."
If you suffered a loss from your investment in Salix Pharmaceuticals purchased on or during the period from November 7, 2013 to November 6, 2014, and would like to learn more about this lawsuit and your ability to participate as a lead plaintiff, please contact us for your no-cost evaluation.
Whistleblowers: Persons with non-public information regarding Salix should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. For more information, call Reed Kathrein at (510) 725-3000 or email SLXP@hbsslaw.com.
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm headquartered in Seattle, Washington with offices in nine cities. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes can be found at www.hbsslaw.com. Read the firm's Securities Newsletter at http://www.hb-securities.com/newsletter. The firm's blog is located at www.meaningfuldisclosure.com.
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