Dr Reddy’s hit by class action suit on “misleading statements” on FDA action

Pharma giant Dr Reddy’s Labs today said that a class action lawsuit has been filed against it on behalf of shareholders, alleging that the company misled investors causing them to lose money on their investments.

“The lawsuit alleges that the company made materially false and/or misleading statements or omissions in connection with its corporate quality system, and specifically in connection with a warning letter from the US Food and Drug Administration dated November 6, 2015, and a letter from the Regierung von Oberbayern in Germany dated Aug 10, 2017,” the company said.

“The lawsuit seeks damages to compensate the purported class of investors for a purported decline in the company’s share price allegedly caused by the alleged misstatements and omissions,” it said today, adding that it has not been served with the lawsuit yet.

The shares of the company fell 2.3% on Monday on the NSE in India.

The case was filed on Aug 25 in the United States District Court for the District of New Jersey.

The suit has been filed on behalf of investors who purchased the company’s shares on the New York Stock Exchange between June 17, 2015 and August 10, 2017, the company said.

“The company cannot comment on the specific allegations in the pending litigation other than to state that the company believes the asserted claims to be without merit,” Dr Reddy’s Labs said.

“The company will respond to the allegations after it has been served with the lawsuit and as and when it may be required to do so by the court,” Dr Reddy’s added.

Separately, on Friday, US-based Rosen Law Firm said it had filed a class action lawsuit on behalf of purchasers of Dr. Reddy’s Laboratories Ltd. to recover damages for Dr. Reddy’s investors under the federal securities laws.