Eagle Pharmaceuticals, Inc. (EGRX) Misled Investors and Overstated its Revenue
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Eagle Pharmaceuticals, Inc. (NASDAQ: EGRX) securities between August 8, 2023 and November 28, 2023. Eagle Pharmaceuticals is an integrated pharmaceutical company engaged in research and development, clinical, manufacturing and commercial sales. The Company has several commercialized products, including PEMFEXY, which is metabolic inhibitor used in combination with chemotherapy for the initial treatment of certain genomic tumor aberrations.
According to the complaint, on November 9, 2023, before the market opened, Eagle Pharmaceuticals announced that it would not release its third quarter 2023 results that day (as had been expected) because the Company “requires more time to review potential adjustments relating to the reporting of sales of PEMFEXY® prior to filing its Form 10-Q.” The Company also disclosed it “expects to revise its previously disclosed 2023 full year guidance downward.” On this news, the Company’s stock price fell $4.16, or 30.4%, to close at $9.54 per share on November 9, 2023.
After the market closed on November 9, 2023, the Company disclosed that it was reviewing “potential adjustments to reserves for returns and price adjustments of approximately $15.0 million to $20.0 million.” These amounts relate “to returns and a price adjustment for PEMFEXY stemming from slower-than-anticipated pull-through from a wholesale customer predominantly due to expiry of inventory.” On this news, the Company’s stock price fell $0.27, or 2.8%, to close at $9.27 per share on November 10, 2023.
Then, on November 29, 2023, before the market opened, Eagle Pharmaceuticals disclosed that Scott Tarriff, the Company’s President and Chief Executive Officer resigned. The Company’s board of directors accepted the resignation “[a]fter consideration of various alternatives, including termination with or without cause.” On this news, the Company’s stock price fell $2.55, or 31%, to close at $5.68 per share on November 29, 2023.
Plaintiff alleges that during the class period, defendants failed to disclose (1) that the Company was experiencing slower-than-anticipated pull-though from a wholesale customer predominantly due to expiry of inventory; (2) that, as a result, the Company had overstated its revenue; and (3) that the Company did not have effective internal controls and procedures over financial reporting as to PEMFEXY sales.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Eagle Pharmaceuticals, Inc. Shareholders who want to act as lead plaintiff for the class should contact Robbins LLP. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
