Cases
Mallinckrodt PLC (NYSE: MNK)
Securities Class Action
Overview
Overview
- Date:
- 1/27/2017
- Company Name:
- Mallinckrodt PLC
- Stock Symbol:
- MNK
- Class Period:
- FROM 7/14/2014 TO 1/18/2017
- Status:
- Closed/Complete
- Court:
- U.S. District Court: DC
NEW YORK, January 27, 2017 – Bragar Eagel & Squire, P.C. announces that a class action lawsuit has been filed in the United States District Court for the District of Washington D.C. on behalf of all persons or entities who acquired Mallinckrodt PLC (NYSE: MNK) securities between July 14, 2014 and January 18, 2017 (the “Class Period”).
The complaint alleges that, throughout the Class Period, Mallinckrodt and its CEO, Mark Trudeau, made a series of false and misleading statements and failed to disclose material adverse facts about the long-term sustainability of the Company's monopolistic Acthar revenues and the exposure of Acthar to reimbursement rates by Medicare and Medicaid. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that Acthar's monopoly status as the only FDA-approved ACTH preparation was the product of unlawful anticompetitive practices and failed to disclose that its increasing reliance on Medicare and Medicaid meant that the Company's monopolistic Acthar revenue would be threatened if the government took action to limit the price paid for this drug by taxpayers.
The truth about the Company's dependence on Medicare and Medicaid for Acthar revenue began to surface on November 9, 2015. Citron Research issued a statement on Twitter comparing Mallinckrodt to Valeant Pharmaceuticals International, Inc. In the wake of the Citron comment, Mallinckrodt's stock price fell 17% from a close of $69.89 per share on November 6, 2015, to close at $58.01 per share on November 9, 2015.
Subsequently, on November 16, 2016, Citron published a report accusing Trudeau and the Company of securities fraud in connection with Trudeau's statements downplaying the Company's reliance on Medicare and Medicaid for Acthar revenue. Among other things, the Citron Report reported that payments from Medicare and Medicaid comprised a substantially larger percentage of Acthar sales than Trudeau previously represented. In the wake of the Citron Report, Mallinckrodt's stock price fell 18.4% from a close of $67.80 per share on November 15, 2016, to close at $55.32 per share on November 17, 2016.
Further information regarding the Company's reliance on Medicare and Medicaid for Acthar revenue was revealed on November 29, 2016. During a conference call with investors on this date, Trudeau admitted that "Acthar now represents a significantly greater proportion of our operating income than one-third." On this news, Mallinckrodt's stock price declined 9.1% from a close of $57.67 per share on November 28, 2016, to close at $52.42 per share on November 29, 2016.
The truth about the Company's anticompetitive and unlawful efforts to prevent an alternative ACTH treatment from reaching the U.S. market was fully revealed on January 18, 2017, when the FTC announced that Mallinckrodt had agreed to pay $100 million in connection with a joint settlement with the FTC and several states. The news of the settlement, and the fact that Mallinckrodt would lose its ACTH monopoly in the U.S., caused the Company's stock price to decline 5.85% from a close of $49.42 per share on January 17, 2017, to close at $46.53 per share on January 18, 2017.
If you acquired Mallinckrodt securities during the Class Period, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Melissa A. Fortunato, Esq. by email at investigations@bespc.com, or telephone at (212) 355-4648, or by filling out the contact form below. There is no cost or obligation to you.
The complaint alleges that, throughout the Class Period, Mallinckrodt and its CEO, Mark Trudeau, made a series of false and misleading statements and failed to disclose material adverse facts about the long-term sustainability of the Company's monopolistic Acthar revenues and the exposure of Acthar to reimbursement rates by Medicare and Medicaid. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that Acthar's monopoly status as the only FDA-approved ACTH preparation was the product of unlawful anticompetitive practices and failed to disclose that its increasing reliance on Medicare and Medicaid meant that the Company's monopolistic Acthar revenue would be threatened if the government took action to limit the price paid for this drug by taxpayers.
The truth about the Company's dependence on Medicare and Medicaid for Acthar revenue began to surface on November 9, 2015. Citron Research issued a statement on Twitter comparing Mallinckrodt to Valeant Pharmaceuticals International, Inc. In the wake of the Citron comment, Mallinckrodt's stock price fell 17% from a close of $69.89 per share on November 6, 2015, to close at $58.01 per share on November 9, 2015.
Subsequently, on November 16, 2016, Citron published a report accusing Trudeau and the Company of securities fraud in connection with Trudeau's statements downplaying the Company's reliance on Medicare and Medicaid for Acthar revenue. Among other things, the Citron Report reported that payments from Medicare and Medicaid comprised a substantially larger percentage of Acthar sales than Trudeau previously represented. In the wake of the Citron Report, Mallinckrodt's stock price fell 18.4% from a close of $67.80 per share on November 15, 2016, to close at $55.32 per share on November 17, 2016.
Further information regarding the Company's reliance on Medicare and Medicaid for Acthar revenue was revealed on November 29, 2016. During a conference call with investors on this date, Trudeau admitted that "Acthar now represents a significantly greater proportion of our operating income than one-third." On this news, Mallinckrodt's stock price declined 9.1% from a close of $57.67 per share on November 28, 2016, to close at $52.42 per share on November 29, 2016.
The truth about the Company's anticompetitive and unlawful efforts to prevent an alternative ACTH treatment from reaching the U.S. market was fully revealed on January 18, 2017, when the FTC announced that Mallinckrodt had agreed to pay $100 million in connection with a joint settlement with the FTC and several states. The news of the settlement, and the fact that Mallinckrodt would lose its ACTH monopoly in the U.S., caused the Company's stock price to decline 5.85% from a close of $49.42 per share on January 17, 2017, to close at $46.53 per share on January 18, 2017.
If you acquired Mallinckrodt securities during the Class Period, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Melissa A. Fortunato, Esq. by email at investigations@bespc.com, or telephone at (212) 355-4648, or by filling out the contact form below. There is no cost or obligation to you.