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Portola Pharmaceuticals Inc. Class Action Lawsuit

Case Summary

Company Name
Portola Pharmaceuticals Inc.
Stock Symbol
PTLA
Class Period
January 8, 2019 to February 26, 2020, including purchasers pursuant to the August 14, 2029 offering
Court
Northern District of California

On January 16, 2020, the Portola Pharmaceuticals Inc. class action lawsuit was commended charging Portola and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and the Securities Act of 1933.  The Portola class action lawsuit was commenced in the Northern District of California on behalf of purchasers of Portola securities between November 5, 2019 and January 9, 2020 (the “Class Period”) and is captioned Hayden v. Portola Pharmaceuticals Inc., et al., No. 20-cv-00367.

Portola is a biopharmaceutical company that develops and commercializes treatments for thrombosis and other hematologic diseases.  Portola’s lead product is Andexxa, used in patients being treated with rivaroxaban or apixaban when anticoagulation needs to be reversed due to life-threatening or uncontrolled bleeding.

The Portola class action lawsuit alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about Portola’s business, operations, and prospects.  Specifically, defendants failed to disclose that, due to ineffective control over financial reporting regarding reserves for product returns, when Portola began shipping longer-dated product with a 36-month shelf life in November 2019 it had not established adequate reserves for returns of prior shipments of short-dated product, and as a consequence, Portola was reasonably likely to need to “catch up” on accounting for return reserves.  As a result of this information being withheld from the market, Portola securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $30 per share.

Then on January 9, 2020, Portola announced disappointing preliminary global net revenues for Andexxa of only $28 million for the fourth quarter of 2019.  Portola attributed the result to a “$5 million gross to net adjustment due to the return reserve for short-dated product” and “[f]lat quarter over quarter demand due to a decrease in utilization” of Andexxa by “hospital pharmacies in an effort to manage pharmacy budgets.”  On this news, Portola’s share price fell $9.98 per share, or approximately 40%, to close at $14.76 per share on January 10, 2020.

Then on February 26, 2020, after the market closed, Portola announced its financial results for the 2019 fourth quarter and full year, disclosing more details regarding the serious problems with its customers' adoption of Andexxa.  Specifically, Portola reported a loss of $96.7 million, or ($1.24) per share, compared to a loss of $88.5 million, or ($1.34) per share, in the same period a year ago – falling far short of analyst estimates of ($0.84) per share.  Portola disclosed that its outsized loss for the quarter encompassed a $27.5 million charge arising from its decision to discontinue operations related to Bevyxxa, a secondary product of the Company, revealing that the Company was forced to cease Bevyxxa commercialization efforts and undertake an internal restructuring in order to focus its efforts on handling the problems related to Andexxa.  As a result of these disclosures, the price of Portola common stock fell approximately 19% to close at $10.17 per share on February 27, 2020.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

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