Endo International Class Action Lawsuit 

Endo International plc (NASDAQ:ENDP)

On November 14, 2017, a class action lawsuit was filed in United States District Court, Eastern District of Pennsylvania, against Endo International and certain of its officers on behalf of a class of Endo International investors who purchased, or otherwise acquired, Endo International securities, seeking to recover compensable damages caused by Defendants’ violations of the Securities Exchange Act of 1934.

Endo International Class Action Lawsuit – The Investor Class

The Endo International class action lawsuit concerns shareholders who purchased Endo International’s securities between September 28, 2015, and February 28, 2017, both dates inclusive.

Endo International – Background & Par Pharmaceutical Holdings Acquisition

Endo International plc is a highly focused generics and specialty branded pharmaceutical company delivering quality medicines through excellence in development, manufacturing and commercialization.”

Endo International, “[t]rough [its] operating companies – Endo Pharmaceuticals, Par Pharmaceuticals and Paladin Labs – Endo is dedicated to serving patients in need.”

Endo claims to have “a long-standing history of success in developing and delivering quality products to [its] customers,” along with a “broad set of therapeutic areas,” which include, for example, allergy immunotherapy, dermatology, infectious disease, pain, and urology.

In the beginning of the securities law suit class period on September 28, 2015, Endo announced that it had completed its $8.05 billion acquisition of Par Pharmaceutical Holdings, Inc. TPG, a global private investment firm.

Endo International’s September 28, 2015 press release stated that as a result of the acquisition,

Endo has further established its position as a leading global specialty pharmaceutical company with a fast growing generics business that is among the top five as measured by U.S. sales according to IMS. The acquisition also helps position Endo for long-term double-digit organic growth, enhanced cash flow generation and increased financial flexibility. Endo’s generics portfolio now includes an extensive range of in market and R&D stage complex and competitively differentiated dosage forms and delivery systems, with a focus on higher barrier-to-entry and first-to-market products. Endo’s combined U.S. Generics segment, which includes Par Pharmaceutical and Qualitest, will be named Par Pharmaceutical, an Endo International Company and will be led by Paul Campanelli, former Chief Executive Officer of Par Pharmaceutical, who will also join Endo’s Executive Leadership Team.

Endo International Class Action Lawsuit Allegations

The class action complaint alleges that throughout the September 28, 2015 to February 28, 2017 class period, the named Defendants made materially false and misleading statements regarding Endo International’s business, operational and compliance policies.

Specifically, Defendants, according to the class action complaint, made false and/or misleading statements and/or failed to disclose during the class period that

(i) Par Pharmaceutical had colluded with several of its industry peers to fix generic drug prices; (ii) the foregoing conduct constituted a violation of federal antitrust laws; (iii) the competitive advantages of the Par Pharmaceutical Acquisition, which Endo touted to its shareholders as, inter alia, “a compelling opportunity to drive future double-digit growth, serve our customers and build shareholder value,” were in fact derived in part from Par Pharmaceutical’s illegal conduct and thus unsustainable; (iv) for the same reasons, the “impressive track record of delivering strong operating results” that Endo attributed to former Par Pharmaceutical executive Paul Campanelli in announcing his promotion to Endo’s CEO consisted in part of illegal conduct; (v) for the foregoing reasons, Endo’s revenues during the Class Period were in part the result of illegal conduct and likewise unsustainable; and (vi) as a result of the foregoing, Endo’s public statements were materially false and misleading at all relevant times.

Media Reports: U.S. Prosecutors Consider Criminal Charges Against Par Pharmaceuticals and Others

According to the Endo International class action lawsuit filing, on November 3, 2016, there were media reports that U.S. prosecutors were considering filing criminal charges by the end of 2016 against Par Pharmaceutical and several other pharmaceutical companies for unlawfully colluding to fix generic drug prices.  Bloomberg, according to the complaint, reported in an article, “U.S. Charges in Generic-Drug Probe to Be Filed by Year-End,” that

U.S. prosecutors are bearing down on generic pharmaceutical companies in a sweeping criminal investigation into suspected price collusion, a fresh challenge for an industry that’s already reeling from public outrage over the spiraling costs of some medicines .

The antitrust investigation by the Justice Department, begun about two years ago, now spans more than a dozen companies and about two dozen drugs, according to people familiar with the matter. The grand jury probe is examining whether some executives agreed with one another to raise prices, and the first charges could emerge by the end of the year, they said.

Though individual companies have made various disclosures about the inquiry, they have identified only a handful of drugs under scrutiny, including a heart treatment and an antibiotic. Among the drugmakers to have received subpoenas are industry giants Mylan NV and Teva Pharmaceutical Industries Ltd. Other companies include Actavis, which Teva bought from Allergan Plc in August, Lannett Co., Impax Laboratories Inc., Covis Pharma Holdings Sarl, Sun Pharmaceutical Industries Ltd., Mayne Pharma Group Ltd., Endo International Plc’s subsidiary Par Pharmaceutical Holdings and Taro Pharmaceutical Industries Ltd.

All of the companies have said they are cooperating except Covis, which said last year it was unable to assess the outcome of the investigation.

. . .

Allergan, Impax and Sun declined to comment beyond their filings. Representatives of Endo, Covis, Taro and Lannett didn’t respond to requests for comment. A Justice Department spokesman declined to comment.  [Emphasis added in class action complaint]         

The Endo International class action lawsuit complaint stated that on November 3, 2016, as a result of this news, Endo’s share price fell $3.54, or 19.48%, to close at $14.63.

Endo International Files Form 10-K & Another Stock Drop

On March 1, 2017, Endo International filed its Annual Report on Form 10-K with the SEC, reporting Endo International’s financial and operating results for the quarter and year ended December 31, 2016.  According to the class action complaint,

[r]eflecting the extent to which Par Pharmaceutical’s unlawful conduct had previously inflated Endo’s revenues, [Endo International] reported a net loss of $3.35 billion, or $15.03 per diluted share, on revenue of $4.01 billion, citing, in part, a 27% increase in cost of revenues and a decrease in gross margins from 36% in 2015 to 34% in 2016.

The Endo International class action lawsuit complaint stated that on March 1, 2017, as a result of this news, Endo’s share price fell $0.83, or 6.08%, to close at $12.82.

Attorneys General From 46 States and D.C. Amend Generic Drug Price-Fixing Antitrust Case

According to the Endo International class action lawsuit complaint:

On October 31, 2017, attorneys general from 46 states and the District of Columbia amended their antitrust case on generic drug price-fixing conspiracy against the $75 billion generic drug industry to add 18 new companies, including Endo’s wholly-owned subsidiary Par Pharmaceutical Companies, Inc.  The states allege these companies violated antitrust laws to artificially inflate the prices of the drugs by agreeing to “collectively raise and/or maintain prices for a particular generic drug,” and agreeing to divvy up the market for the drugs to reduce competition by “refusing to bid for particular customers or by providing a cover bid that they knew would not be successful.” This in effect “avoided price erosion” and “increased pricing for targeted products without triggering a ‘fight to the bottom’ among existing competitors.” 

According to the amended complaint, these companies conspired to unreasonably restrain trade, artificially inflate and reduce competition in the generic pharmaceutical industry for the markets of fifteen generic drugs: Acetazolamide, Doxycycline Hyclate Delayed Release, Doxycycline Monohydrate, FosinoprilHydrochlorothiazide, Glipizide-Metformin, Glyburide, Glyburide-Metformin, Leflunomide, Meprobamate, Nimodipine, Nystatin, Paromomycin, Theophylline, Verapamil and Zoledronic Acid.  As a result of the conspiracy, “[p]rices for dozens of generic drugs have risen – while some have skyrocketed, without explanation, sparking outrage from politicians, payers, and consumers across the country whose costs have doubled, tripled, or even increased 1,000% or more.” 

Endo International Shareholders

If you purchased or otherwise acquired Endo International shares and wish to speak privately with a securities attorney about the Endo International class action lawsuit, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected] or send an e-mail to [email protected].

Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches.  Together, the partners of Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.