Judge Dismisses Horizon Pharma Securities Class Action

Paul, Weiss secured the dismissal of securities class action stemming from a stock offering by Horizon Pharma PLC. The firm represented the underwriter defendants, Citigroup Global Markets, Inc., Jefferies LLC, Cowen & Company LLC and Morgan Stanley & Co. LLC.

The litigation arose out of an April 2015 common stock offering by Horizon, a drug manufacturer and marketer. In their complaint, shareholders claimed that Horizon’s offering documents contained misstatements and omissions about a Horizon program that helped patients obtain prescription drugs without interference or delay by insurers or pharmacies, among other claims. After the company later revealed that it had received a subpoena from the Manhattan U.S. Attorney in connection with the program, Horizon’s stock price declined, prompting shareholders to file a class action. Shareholders alleged that Horizon, certain Horizon executives and the underwriters violated Sections 11 and 12 of the Securities Act and Items 303 and 503 of SEC Regulation S-K, and also asserted fraud claims against Horizon and a number of the Horizon defendants.

In granting the underwriters’ and Horizon’s motion to dismiss with prejudice, U.S. District Judge Jesse M. Furman found that the offering documents did not contain any material misrepresentations or omissions. He also agreed with the underwriters that Horizon had explicitly and repeatedly disclosed in the offering documents the precise risks of its business plan that eventually materialized and led to the decline in Horizon’s stock price. He further ruled that Horizon had made all necessary disclosures under Items 303 and 503 of Regulation S-K, and that the plaintiffs failed to identify any adverse economic trend or uncertainty that Horizon knew about but did not disclose.

The Paul, Weiss team included litigation partner Richard Rosen.