Robbins LLP: Horizon Pharma plc (HZNP) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that a class action complaint was filed against Horizon Pharma plc (NASDAQGS: HZNP) in the U.S. District Court for the Southern District of New York. The plaintiff brings the complaint on behalf of all purchasers of Horizon Pharma securities between March 13, 2014 and October 22, 2015, for alleged violations of the Securities Act of 1934 by Horizon Pharma’s officers and directors. Horizon Pharma is a specialty biopharmaceutical company that identifies, develops, and commercializes medicines for the treatment of arthritis, pain, inflammatory, and/or orphan diseases in the United States and internationally.
Horizon Pharma Accused of Engaging in Profiteering
According to the complaint, Horizon Pharma’s business model involves a combination of aggressive acquisitions and aggressive pricing through its automated distribution system, Prescriptions-Made-Easy (“PME”). Under PME, physicians send their patients’ prescriptions through a specialty pharmacy partnered with Horizon. During 2014 and 2015, in various filings with the U.S. Securities and Exchange Commission, the company touted the efficacy and outlook of PME, forecasting increasing revenues and strong financial leverage. However, the complaint alleges that Horizon’s growth strategy was actually a predatory business model that resulted in pharmacies excluding Horizon’s drugs from their formularies and commercial insurance companies refusing to pay for Horizon’s highly priced drugs. Further, Horizon’s use of specialty pharmacies allegedly left the company vulnerable to regulatory scrutiny and risks.
On September 23, 2015, a large pharmacy benefit manager published a note to clients criticizing Horizon’s price increases and accused it of engaging in profiteering, noting that Horizon increased the prices on some of its products more than tenfold. Then, on October 19, 2015, the New York Times released an article criticizing the price of Horizon’s main drug Duexis, which it said should cost between $20-40 per month, but actually costs about $1,500 per month. On February 29, 2016, Horizon announced in its annual report that it received a subpoena in November 2015 from the U.S. Attorney’s Office for the Southern District of New York relating to the company’s sales and marketing activities and relationships with pharmacies. Since news of Horizon’s profiteering practices were made public, its stock declined by $8.36 per share, or over 32%, to close at $17.16 per share on February 29, 2016.
Horizon Pharma Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.