Gilead Sciences will have to fight investors after all. The U.S. Supreme Court refused to toss a securities-fraud suit that claims the company inflated its stock price by pushing its HIV remedy Viread for off-label uses.
The ruling denies Gilead's attempts to reverse a lower-court's reinstatement of the lawsuit, which claims that Gilead disregarded FDA rules and marketed the drug for off-label AIDS and hepatitis-B uses. The resulting sales bump excited investors, who bid up the stock price by 13.4 percent. The agency had warned Gilead against misleading promotions of Viread, but shareholders didn't react until a worse financial report appeared two months later.
Susan Alexander, the plaintiffs' lawyer, told the San Francisco Chronicle that the court's action "reflects the market reality that when corporate fraud unravels, that's often reflected in a company's financial bottom line rather than through defendants' admissions." For its part, Gilead maintains that it's "confident" in its defense of the suit.
Read the Chronicle piece