- Company Name
- AbbVie Inc.
- Stock Symbol
- Class Period
- October 25, 2013 to September 18, 2018
- Motion Deadline
- November 20, 2018
- Central District of California
The complaint charges AbbVie and certain of its officers with violations of the Securities Exchange Act of 1934. AbbVie is a global research-based biopharmaceutical company that develops and markets pharmaceutical products to treat serious health conditions. AbbVie’s top-selling drug, HUMIRA, is a biological therapy approved to treat adult and pediatric Crohn’s disease, rheumatoid arthritis, ulcerative colitis, plaque psoriasis, and various other ailments.
The complaint alleges that, throughout the Class Period, defendants made false and misleading statements and/or omitted to disclose adverse information regarding the Company’s strategy to drive the sales growth of its top-selling drug, HUMIRA. Specifically, defendants failed to disclose that the Company’s growth strategy for HUMIRA, which purportedly included applying for regulatory approval to treat new diseases and expanding the drug’s presence in underserved and emerging markets, actually involved illegal kickbacks and unlawful sales and marketing tactics that would lead to heightened scrutiny by state governments and other agencies. As a result of these false statements and/or omissions, AbbVie securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of approximately $120 per share, and AbbVie insiders were able to sell more than $192 million worth of their AbbVie shares at artificially inflated prices, including the Company’s CEO and CFO, who sold nearly $88 million worth and nearly $12 million worth of their shares, respectively.
Then on September 18, 2018, Bloomberg reported that “California's insurance regulator is suing AbbVie Inc., alleging that the pharmaceutical giant gave illegal kickbacks to health-care providers in order to keep patients on its blockbuster rheumatoid arthritis drug Humira.” The report further stated that, according to the California Department of Insurance, “[t]he company ‘engaged in a far-reaching scheme including both classic kickbacks – cash, meals, drinks, gifts, trips, and patient referrals – and more sophisticated ones – free and valuable professional goods and services to physicians to induce and reward Humira prescriptions.’” On this news, the price of AbbVie stock fell $4.35 per share, or over 4.5%, over two consecutive trading days to close at $91.02 per share on September 19, 2018.