More woes for Caraco, the generic drug maker whose recent FDA visits led to the seizure of more than 30 medications and drug ingredients for violations of good manufacturing practices: It is now the target of the profession known for its use of the ampersand in company names.
Glancy Binkow & Goldberg and Dyer & Berens are among the first to initiate legal action against the drug maker. The former has filed a class action lawsuit on behalf of those who bought Caraco securities as far back as May 2008. The complaint charges violations of federal securities laws; specifically, making false and misleading statements and failure to take corrective manufacturing actions. It was cited for oversized tablets, poor control of raw materials and possibly a formulation error.
The latter, Dyer & Berens, has initiated an investigation concerning investor losses, the result of the company's stock falling to $1.75 per share from $4.15 in late June when the seizures were announced. The investigation, like the class action suit, focuses on whether Caraco made false or misleading statements or failed to disclose manufacturing processes that were noncompliant with the FDA's GMP requirements.