PHILADELPHIA, Aug. 24, 2004 (PRIMEZONE) -- The law firm of Berger & Montague, P.C. (http://www.bergermontague.com) filed a class action suit against Ligand Pharmaceuticals Inc. ("Ligand" or the "Company") (Nasdaq:LGND) (CUSIP:53220K207) and certain of its officers, in the United States District Court for the Southern District of California on behalf of all persons or entities who purchased Ligand securities from July 28, 2003 through August 2, 2004 (the "Class Period").
The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the SEC by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of the Company's securities.
Ligand's lead product, AVINZA, was approved by the Food and Drug Administration ("FDA") in March 2002, for the relief of chronic moderate to severe pain. The Company also has research and development collaborations with various pharmaceutical companies, including Eli Lilly & Company ("Lilly") and GlaxoSmithKline ("GSK") for the development of peroxisome proliferation activated receptors ("PPAR") to target other medical problems.
The complaint alleges that during the Class Period, the defendants had concealed critical material information regarding the safety, efficacy and viability of Ligand's PPAR modulator programs with Lilly and GSK, their inability to achieve projected growth for AVINZA, and issues impacting revenue recognition and profitability, including charge-offs and product returns related to AVINZA.
Specifically, the complaint alleges that defendants knew but concealed from the investing public during the Class Period the following material adverse facts, among others: (a) distributors were returning large lots of unsold short-dated product for replacement, as a way to moderate channel stuffing by defendants, intended to meet sales targets for AVINZA; (b) despite continued claims for advancing sales of AVINZA, excess wholesaler inventories had built up, further diminishing even the possibility of achieving AVINZA sales and earnings for Ligand; (c) revelations of the cancer-causing effects of PPAR modulators would have a direct, adverse effect on the viability of the Company's PPAR compound programs; (d) the Company's revenue, accounts receivable and inventory valuation associated with AVINZA was grossly overstated as defendants had inappropriately sold and booked as revenue product lots that were "short-dated" and were rapidly approaching or had exceeded their expiration date; and (e) remaining in-house inventory could not be used for direct sale since it was required to replace AVINZA "short-dated" lots already sold, thus rendering the true value of this component of the Company's AVINZA inventory at nearly zero.
On August 3, 2004, the Company posted a second-quarter loss of $14.2 million, or $0.19 a share, far from the projected loss of $0.06 a share. It was also revealed, but not explained, that the Company's auditors had resigned. The news caused the Company's shares to fall sharply, tumbling $5.38, or 39%, to $8.17, on volume of over 29 million shares.
If you purchased Ligand securities during the period from July 28, 2003 through August 2, 2004, inclusive, you may, no later than October 8, 2004, move to be appointed as a Lead Plaintiff. A Lead Plaintiff is a representative party that acts on behalf of other class members in directing the litigation. If you have sustained substantial losses in Ligand securities during the Class Period, please contact Berger & Montague, P.C. for a more thorough explanation of the Lead Plaintiff selection process.
The law firm of Berger & Montague, P.C. has over 50 attorneys, all of whom represent plaintiffs in complex litigation. The Berger firm has extensive experience representing plaintiffs in class action securities litigation and has played lead roles in major cases over the past 25 years which have resulted in recoveries of several billion dollars to investors. The firm has represented investors as lead counsel in actions against companies including Rite Aid, Sotheby's, Waste Management, Inc., Sunbeam, Boston Chicken and IKON Office Solutions, Inc. The standing of Berger & Montague, P.C. in successfully conducting major securities and antitrust litigation has been recognized by numerous courts. For example:
"Class counsel did a remarkable job in representing the class
interests." In Re: IKON Offices Solutions Securities Litigation.
Civil Action No. 98-4286(E.D. Pa.) (partial settlement for
$111 million approved May, 2000).
"...(Y)ou have acted the way lawyers at their best ought to act.
And I have had a lot of cases...in 15 years now as a judge and I
cannot recall a significant case where I felt people were better
represented than they are here ... I would say this has been the
best representation that I have seen." In Re: Waste Management,
Inc. Securities Litigation, Civil Action No. 97-C 7709
(N.D. Ill.) (settled in 1999 for $220 million).
If you purchased Ligand securities during the Class Period, please visit our website at www.bergermontague.com to view the complaint and join the class action or if you have any questions concerning this notice or your rights with respect to this matter, please contact:
Berger & Montague, P.C.
Todd S. Collins, Esquire
Douglas M. Risen, Esquire
Diane Werwinski, Investor Relations Manager
(888) 891-2289
(215) 875-3000
Fax: 215-875-5715
www.bergermontague.com
InvestorProtect@bm.net
More information on this and other class actions can be found on theClass Action Newsline at www.primezone.com/ca