This is a securities fraud class action lawsuit against PharmaNet Development Group, Inc.
PharmaNet is a drug development services company that maintains offices and facilities in North America, Europe, South America, Asia, Africa and Australia and has clients in the branded pharmaceutical, biotechnology, generic drug and medical device industries. PharmaNet offers clinical-development solutions including consulting services, Phase I clinical studies, bioequivalency and pharmacodynamic studies, bioanalytical analyses, and Phase II, III, and IV clinical development programs. In addition, PharmaNet also offers technology tools for managing clinical trial data.
The class action complaint alleges that the representations contained in PharmaNet's press releases, SEC filings, conference calls and presentations during the Class Period were materially false and misleading when made because they failed to disclose that:
(i) PharmaNet's backlog contained numerous contracts which were likely to be cancelled;
(ii) PharmaNet had ramped up expenses in order to perform contracts even though there was a substantial likelihood that the contracts would be cancelled;
(iii) PharmaNet was entering into contracts with highly risky biotechnology and pharmaceutical companies where the risk that the contract would be cancelled was greatly increased; and
(iv) given the above factors, PharmaNet lacked a reasonable basis for their positive statements about PharmaNet, its business, backlog and earnings guidance.
On April 30, 2008, PharmaNet issued a press release announcing its financial results for the first quarter of 2008. For the quarter, PharmaNet reported direct revenue of $86.8 million and backlog of $482.9 million. In response to the announcement, the price of PharmaNet stock dropped from $23.86 per share to $17.10 per share on extremely heavy trading volume.
Name (Stock Symbol)
PharmaNet Development Group, Inc. (PDGI)
PharmaNet Development Group, Inc., a drug development services company, provides clinical development services to pharmaceutical, biotechnology, generic drug, and medical device companies.
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