Dr Reddy’s Laboratories (DRL) has said that a law firm representing a purported investor has filed a class action suit against the company and its key executives in a US court for alleged violations of American federal securities laws.
In a regulatory filing, the company said that the case has been filed in the US district court for New Jersey. The lawsuit represents a class of investors who purchased or otherwise acquired the company’s publicly traded shares on the New York Stock Exchange between June 15, 2015, and August 10, 2017, DRL said.
“The lawsuit alleges the company made materially false and/or misleading statements or omissions in connection with its corporate quality system and specifically in connection with a warning letter from the US Food and Drug Administration dated November 6, 2015, and a letter from the Regierung von Oberbayern in Germany dated August 10, 2017. The lawsuit seeks damages to compensate the purported class of investors for a purported decline in the company’s share price allegedly caused by the alleged misstatements or omissions,” DRL said.
But the company said it has not yet been served with the lawsuit and cannot comment on the specific allegation except to state “the asserted claims to be without merit”. However, the German health regulator has not renewed good manufacturing practice (GMP) compliance certificate of its formulations facility 2 in Bachupally in Hyderabad.
In November 2015, the firm received a warning letter from the USFDA for violation of GMP at its Duvvada plant, and active pharmaceutical ingredients facilities in Miryalaguda in Telangana and Srikakulam in Andhra.