United States District Court, D. Massachusetts
LOCAL NO. 8 IBEW RETIREMENT PLAN, on Behalf of Itself and All Others Similarly Situated, Plaintiff,
VERTEX PHARMACEUTICALS INC., JOSHUA BOGER, Ph.D., JEFFREY LEIDEN, M.D., Ph.D., PETER MUELLER, Ph.D., PAUL SILVA, ELAINE ULLIAN, and NANCY J. WYSENSKI, Defendants
For Local No. 8 IBEW Retirement Plan & Trust, On Behalf of Itself and All Others Similarly Situated, Plaintiff: Joseph P. Guglielmo, LEAD ATTORNEY, Scott & Scott, LLP, New York, NY.
For Vertex Pharmaceuticals Incorporated, Joshua Boger, Ph. D., Jeffrey Leiden, M.D., Ph. D., Peter Mueller, Ph. D., Paul Silva, Elaine Ullian, Nancy J. Wysenski, Defendants: John F. Sylvia, LEAD ATTORNEY, Matthew D. Levitt, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Boston, MA.
MEMORANDUM AND ORDER ON MOTION FOR APPOINTMENT AS LEAD PLAINTIFF AND FOR APPROVAL OF LEAD COUNSEL
F. Dennis Saylor IV, United States District Judge.
This is a putative class action involving alleged violations of the Securities Exchange Act of 1934. Local No. 8 IBEW Retirement Plan has brought suit on behalf of a class of similarly situated persons against Vertex Pharmaceuticals Inc. and a number of Vertex employees. Plaintiff alleges that class members were harmed when they purchased Vertex's common stock at prices that were artificially inflated by the company's false and misleading statements about its products. Plaintiff also alleges that a number of Vertex executives personally profited by selling millions of dollars of Vertex stock while the stock's value was artificially inflated.
Local No. 8 has moved for (1) appointment as lead plaintiff and (2) approval of its selection of Scott䧊 LLP as lead counsel, pursuant to § 21D(a)(3)(B) of the Securities Exchange Act of 1934. 15 U.S.C. § 78u-4(a)(3)(B). Defendants have filed no opposition to the motion. For the reasons set forth below, plaintiff's motion will be granted, Local No. 8 will be appointed lead plaintiff, and Scott䧊 LLP will be approved as lead counsel.
Unless otherwise noted, all facts are stated as set forth in the complaint.
Vertex is a biotechnology company based in Massachusetts that researches and develops medicine to treat a variety of illnesses. (Compl. ¶ ¶ 3, 12). The company's products include medicines used to treat, among other things, cancer, hepatitis C, HIV, and influenza. (Compl. ¶ 20).
One of Vertex's products is the drug Kalydeco, which was approved by the Food and Drug Administration for use in treating cystic fibrosis in early 2012. (Compl. ¶ ¶ 4, 23). The drug was approved
for use among patients with a specific genetic mutation--a group that accounts for approximately four percent of those with cystic fibrosis. (Compl. ¶ 22). In early 2012, Vertex also began exploring the combination of Kalydeco with other medications or therapies to treat patients with more common forms of the disease. ( Id.).
On May 7, 2012, Vertex announced that it had achieved significant results in a clinical study that combined the experimental drug VX-809 and Kalydeco in the treatment of patients with cystic fibrosis. (Compl. ¶ 28). The results indicated a substantial improvement in lung function. ( Id.). Vertex's stock price, which had closed at $37.41 per share on May 4, closed at $58.12 per share on May 7. (Compl. ¶ 34). In the following weeks, the company's stock value rose as high as $64.94. (Compl. ¶ 35). Local No. 8 alleges that during that time the individual defendants collectively sold stock worth tens of millions of dollars. ( Id.).
On May 29, 2012, Vertex issued a statement that indicated that the results of the study were not as positive as the company's initial statements suggested. (Compl. ¶ 46). Based on that news, the stock declined from a price of $64.85 at the ...