Mylan N.V. Class Action Lawsuit
- Company Name
- Mylan N.V.
- Stock Symbol
- Class Period
- February 16, 2016 to May 7, 2019
- Western District of Pennsylvania
The Mylan N.V. class action lawsuit charges Mylan and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Mylan common stock between February 16, 2016 and May 7, 2019, inclusive (the “Class Period”). The Mylan class action lawsuit was commenced on June 26, 2020 in the Western District of Pennsylvania and is captioned Public Employees’ Retirement System of Mississippi v. Mylan N.V., No. 20-cv-00955.
Mylan is the second largest generic drug manufacturer in the world, with roughly 55 manufacturing and R&D facilities globally. Mylan’s largest U.S. manufacturing facility is located in Morgantown, West Virginia.
The Mylan class action lawsuit alleges that Mylan’s revenue increases and profitability were being artificially buoyed by Mylan’s unscrupulous and illegal conduct of intentionally skirting and ignoring U.S. Food and Drug Administration (“FDA”) Current Good Manufacturing Practices (“CGMPs”). Through Mylan’s scheme to corrupt quality control data files, Mylan bypassed countless expensive and time-consuming quality control tests, allowing Mylan to increase its output and decrease costs.
On June 28, 2018, Mylan disclosed that the FDA had conducted a four-week investigation into the Morgantown facility in the spring of 2018, which culminated in the FDA’s issuance of its second citation in less than two years. On this news, Mylan’s share price fell approximately 3%. Next, on August 8, 2018, Mylan’s President, defendant Rajiv Malik, revealed that Mylan had “undertaken a restructuring and remediation program in Morgantown” that included a “discontinuation of a number of products” and would have a “negative impact on production levels, product supply and operations.” On this news, Mylan’s share price fell approximately 7%.
Then, on November 9, 2018, the FDA issued a formal warning letter concerning “significant violations of current good manufacturing practice[s]” at Mylan’s Morgantown plant and reporting that products at the plant were “adulterated.” On this news, Mylan’s share price fell approximately 3%. Thereafter, on February 26, 2019, Mylan stunned investors when Mylan announced an 18% decrease in net sales from the prior year, attributing this shortfall, in part, to its Morgantown restructuring, which included the discontinuation of almost 250 products. On this news, Mylan’s share price fell approximately 15%.
Finally, on May 7, 2019, Mylan disclosed a surprise loss for the first quarter of 2019 due, in part, to additional costs associated with the Morgantown restructuring. Mylan reported that its revenues and earnings per share were down year over year by 7% and 15%, respectively, as Mylan discontinued manufacturing certain products in the Morgantown facility, and that its quarterly adjusted free cash flow was severely lacking, now matching its 2015 levels. Mylan Chief Executive Officer, defendant Heather Bresch, attributed the cash flow swing to, among other factors, “the Morgantown remediation” and disclosed an additional $70 million in expenses tied to the facility’s restructuring. On this news, Mylan’s share price fell approximately 24%.
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