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ViroPharma Lied About Antibiotic Exclusivity, Investor Says

Posted: May 18, 2012
Source: Law360
Practice Areas: Securities Litigation

A shareholder on Wednesday filed a proposed class action against ViroPharma Inc. seeking damages for stock losses allegedly sustained after the company wrongly led investors to believe it had secured three years of market exclusivity for its signature gastrointestinal antibiotic.

In a suit filed in Pennsylvania federal court, the shareholder accuses the company of misleading investors with statements in December that its antibiotic brand, Vancocin, would qualify for three years of market exclusivity thanks to a new condition of use established for the drug by the results of a clinical study.

ViroPharma said the U.S. Food and Drug Administration had approved its supplemental new drug application, which updated labeling and dosing levels for the antibiotic, and claimed the approval would give the company rights to three years of market exclusivity, according to the complaint. The statement sent the company's stock price up more than 17 percent, the complaint says.

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