A jury in federal court in California ruled in the favor of the plaintiffs in a class-action lawsuit against Puma Biotechnology and its former CEO, Alan H. Auerbach, alleging that the company made false or misleading statements leading to the artificial inflation of its stock price, according to documents filed in federal court.
The complaint filed by plaintiffs, which include the £3 billion ($3.9 billion) Norfolk Pension Fund, Norwich, England, alleged that Puma, a Los Angeles-based biopharmaceutical firm, "made false and/or misleading statements and failed to disclose material adverse facts about the company's business, operations, prospects and performance" while promoting the development of a drug designed to treat breast cancer.
Plaintiffs bought shares in Puma Biotechnology at allegedly artificially inflated prices. But when the company abruptly changed its timeline and other actions regarding the drug, its stock price dropped dramatically.
"As a result of defendants' wrongful acts and omissions, and the precipitous decline in the market value of the company's securities, plaintiff and other class members have suffered significant losses and damages," the complaint alleged.
Paul Davies, a partner in law firm Latham & Watkins, which represented the defendants, couldn't immediately be reached for comment.