UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
PETER GREEN, on behalf of himself and all |
others similarly situated, |
| No. [99-CV-00439]
Plaintiff, | CLASS ACTION COMPLAINT FOR
v. || VIOLATION OF THE FEDERAL
PATHOGENESIS CORPORATION, | SECURITIES LAWS
WILBUR H. GANTZ and ALAN R. MEYER, | [filed Mar. 26, 1999]
|
Defendants. |
_______________________________________ ||
Plaintiff, by his undersigned attorneys, for this class action complaint, alleges the claims
set forth herein. Plaintiff's claims as to himself and his own actions, as set forth below,
are based upon personal knowledge. All other allegations are based upon the
investigations of counsel, which investigations include reviews of the public filings with
the Securities and Exchange Commission (the "SEC") made by Pathogenesis Corporation
("PGNS" or the "Company"), securities analysts' reports and advisories about the
Company, press releases issued by the Company, media reports about the Company and
other sources. Based upon such investigations, and pursuant to Fed. R. Civ. P. 11(b)(3),
plaintiff believes that, after reasonable opportunity for discovery, substantial evidentiary
support will likely exist for the allegations set forth herein.
I. NATURE OF THE ACTION
1. This is a class action brought on behalf of all persons, other than defendants and
affiliated persons as described below (the "Class"), who purchased or otherwise acquired
the common stock of PathoGenesis Corporation ("PGNS") between January 25, 1999 and
March 22, 1999 (the "Class Period"), alleging violations of the federal securities laws.
2. PGNS is, essentially, a one-product company entirely dependent upon the success of
its formulation of the antibiotic Tobramycin ("TOBI"), an inhaled antibiotic used to treat
cystic fibrosis.
3. Prior to 1998, PGNS had never had a profitable year. Based with this knowledge, the
defendants undertook a scheme to artificially inflate fourth quarter 1998 revenues by
inducing drug wholesalers to overstock their inventories before a seven percent price
increase of TOBI took effect in December of 1998.
4. In response, these drug wholesalers built up their TOBI inventory levels to $16 million
during the fourth quarter of 1998 -- when they had previously carried only $5 million to
$7 million in inventory. Thus, at least $9 million of the "sales" recorded during the fourth
SNIPPETS:
Plaintiff, by his undersigned attorneys, for this class action complaint, alleges the claims
All other allegations are based upon the investigations of counsel, which investigations
Based upon such investigations, and pursuant to Fed.
P. 11, plaintiff believes that, after reasonable opportunity for discovery, substantial
This is a class action brought on behalf of all persons, other than defendants and affiliated
PGNS is, essentially, a one-product company entirely dependent upon the success of its
the defendants undertook a scheme to artificially inflate fourth quarter 1998 revenues by
But defendants were aware, or were reckless in not knowing, that at least $9 million of these
On March 22, 1999, the end of the class period, PGNS shocked the market by announcing that
This Court has jurisdiction in this action pursuant to Section 27 of the Exchange Act,
Defendant Wilbur H. Gantz is, and was at all times relevant hereto, President, Chief
Defendants Gantz and Meyer are hereinafter sometimes referred to collectively as the
Because of their positions with the Company, the Individual Defendants controlled the
The Individual Defendants prepared and/or were provided with copies of the Company's
Excluded from the Class are the defendants herein; any subsidiaries or affiliates of PGNS;
any such excluded party.
The members of the Class are so numerous that joinder of all members is impracticable.
whether defendants' statements disseminated to the investing public and securities markets by
PGNS is, essentially, a "one-product" company, marketing TOBI, an inhaled antibiotic, in the
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