Shareholder Class Action Alleging Vanda Pharmaceuticals (VNDA) Made Materially False and Misleading Statements Survives Motion to Dismiss
Between 2015 and 2019, Vanda and its officers hid that Vanda was involved in a fraudulent scheme that included violations of federal Medicare, Medicaid, and Tricare programs and that Vanda’s promotional materials were false and misleading, garnering scrutiny from the FDA. Specifically, Vanda schemed to promote its drugs Fanapt and Hetlioz for “off-label” uses in addition to other prohibited promotional strategies. The complaint further alleges that Vanda’s executives and officers knew about the prohibited promotional strategies and actively participated in the fraudulent activity. When the truth was revealed, Vanda’s stock declined over 5%.
On March 10, 2021, U.S. District Judge Frederic Block denied Vanda and its CEO’s motion to dismiss the securities class action against, paving the way for litigation to proceed.