Stock Collapse and Narrowed Claims
The lawsuit, filed in late 2020, alleged that Mylan’s stock plunged roughly 50% after reports surfaced claiming the company had manipulated quality controls at its West Virginia facility. Investors said executives and company representatives misled the market about those practices.
In 2023, U.S. District Judge J. Nicholas Ranjan significantly trimmed the case, leaving only one actionable claim intact: a 2019 statement by a Mylan spokesperson asserting that “at any point in time,” allegations that employees bypassed quality control systems were untrue.
The plaintiffs acknowledged in Wednesday’s filing that the court’s earlier rulings exposed the case to further narrowing, making settlement a pragmatic choice.
They conceded that risks loomed large — including the possibility the court might eliminate the remaining “scheme” claim on grounds that it was not sufficiently communicated to the market. The investors also faced challenges in proving falsity and scienter, meaning whether the defendants knowingly or recklessly misled shareholders.
In addition, Mylan was poised to argue that any stock price drop stemmed from unrelated negative news or general market volatility, rather than the alleged misstatements. The company could also have revived arguments that the quality control allegations were not widely public and thus did not meaningfully inflate the stock price.
Still, in July, Judge Ranjan denied Mylan’s motion for judgment on the pleadings, keeping the surviving claim alive.
