SAN FRANCISCO, Feb. 08, 2024 (GLOBE NEWSWIRE) — Hagens Berman urges Eagle Pharmaceuticals, Inc. (NASDAQ: EGRX) investors who suffered substantial losses to submit your losses now.
Class Period: Aug. 8, 2023 – Nov. 28, 2023
Lead Plaintiff Deadline: Feb. 9, 2024
Contact An Attorney Now: [email protected]
Eagle Pharmaceuticals, Inc. (EGRX) Securities Fraud Class Action:
On Jan. 15, 2024, Eagle announced that it had received a limited waiver from its lenders on the defaults and events of default that occurred as a result of the company’s (i) impending restatement of Q-2 2023 financials and (ii) failure to timely deliver Q-3 2023 financial statements.
While Eagle’s securing the lenders’ limited waiver staves off a potential liquidity crisis, Eagle disclosed that until the Company satisfies its financial statement requirements its line of credit has been halved, reducing from $100 million to $50 million.
The line of credit reduction follows the filing of a securities fraud class action suit against Eagle and its executives challenging the company’s admitted improper accounting.
The securities class action lawsuit alleges that Defendants misrepresented and failed to disclose that: (i) Eagle was experiencing slower than anticipated pull-though from a wholesale customer predominantly due to expiry of inventory; (ii) as a result, Eagle had overstated its revenue; and (iii) Eagle did not have effective internal controls and procedures over financial reporting as to sales for its lung cancer drug PEMFEXY.
The truth began to emerge on Nov. 9, 2023, when the Company announced that it would not be timely filing its financial report for 3Q 2023. The Company said, in the course of preparing its interim 3Q 2023 financial statements, it determined that it was necessary to review potential adjustments primarily relating to reserves for PEMFEXY returns and price adjustments estimated in the amount of $15.0 million to $20.0 million.
Then, on Nov. 29, 2023, Eagle announced that its board of directors accepted the resignation of its CEO (Scott Tarriff) effective immediately. The Board noted its ability to clawback payments to Tarriff’s upon any finding that the former CEO engaged in conduct constituting “cause” under his employment agreement.
On Dec. 15, 2023, two weeks after the investor lawsuit was initiated, the company revealed that its 2Q 2023 also can no longer be relied upon and will need to be restated.
The company revealed that 2Q 2023 reserves and price adjustments recorded for PEMFEXY should have been higher, and therefore its net product sales for the period were correspondingly overstated. The company also stated that its failure to deliver accurate financial statements to its lenders constituted an event of default under its credit agreement. The full extent of the accounting problem is not yet known, as the company revealed that it is assessing whether additional corrections are required.
“Based on the company’s recent disclosures, we are investigating whether the alleged fraudulent period should be expanded,” said Reed Kathrein, the Hagens Berman partner leading the firm’s investigation.
If you invested in Eagle Pharmaceuticals and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »
If you’d like more information and answers to frequently asked questions about the Eagle Pharmaceuticals case and our investigation, read more »
Whistleblowers: Persons with non-public information regarding Eagle Pharmaceuticals should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Past results do not guarantee future outcomes.
Services may be performed by attorneys in any of our offices.
Reed Kathrein, 844-916-0895
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