Amgen loses Supreme Court ruling in shareholder suit
Amgen just can't escape the spotlight. The biotech company was accused last month of getting special favors from lawmakers. Today the U.S. Supreme Court ruled against it in a securities case that sets precedent for the industry and beyond.
In a 6-3 decision, justices made it easier for shareholders to press class-action cases. The case accused Amgen ($AMGN) of misleading investors for three years about the health risks of anemia drugs Aranesp and Epogen. The case pivoted on when shareholders must show harm and whether judges can rule on that before suits are combined into class actions. The Supreme Court decided that class actions can proceed before shareholders prove that their investments were unreasonably undermined by a company's actions.
Business groups like the U.S. Chamber of Commerce had fought against that position, saying that class-action litigation is so expensive to defend against that it forces companies to settle when they are in the right. For its part, Amgen said it had not misled anyone and that health risks of the drugs were publicly known.
Amgen was on center stage last month when the The New York Times reported that a provision in a bill postponed new pricing rules for its Sensipar oral treatment used by patients on dialysis. The story suggested that Amgen had gotten the provision slipped into the fiscal cliff bill after intense lobbying. Yesterday, the FDA halted a trial of Sensipar in children after a 14-year-old patient died. The agency and the company are still investigating whether the drug played a role in the death.
- read the Bloomberg story