Impax Settles Stockholder Lawsuit Over Manufacturing Violations for $8 Million
Impax has agreed to pay shareholders $8 million to end a class action lawsuit alleging the brand and generics maker deliberately withheld the extent of its manufacturing practice violation problems.
Impax announced the Sept. 22 settlement in an SEC filing last week, cautioning that the payout is only to settle the claims and does not represent an admission of wrongdoing or liability. The settlement must still be approved by the presiding California federal judge. The money will come entirely from the company’s insurance policy, Impax said.
Shareholders first sued Impax in March 2013 after the extent of the company’s ongoing issues with the FDA over manufacturing violations came to light. Until then, Impax had assured shareholders and the public that it was resolving such issues, shareholders said in an amended complaint. Shareholders were caught off guard when the persistent nature of the problems was revealed and the stock tanked, the complaint added.
Violations at Impax’s Hayward, Calif., plant have included a lack of equivalence testing, failure to review batch problems and poor data integrity. Impax’s difficulty in resolving those issues has jeopardized the company’s generic and brand products, causing severe delays in its bid for approval for its Parkinson’s drug Rytary (IPX066). Impax has continuously said it is working to address all issues.
Pending review of the settlement, the judge in the case has postponed further hearings that were scheduled for the coming weeks.
Avoid costly lawsuits and manufacturing violations. Train your employees the right way with GMP Training for Drugmakers.