Baxter International Sued Over Misleading Public Statements, Share Price
Baxter International Inc., a maker of intravenous drugs, was sued by a pension fund over allegedly misleading public statements made about the company’s business prospects.
Deerfield, Illinois-based Baxter falsely said its plasma- derivative business would grow, the city of Lakeland, Florida’s employee pension plan claims in a complaint filed today in federal court in Chicago. The plaintiffs seek class-action, or group, status to represent people who bought the shares from September 2009 to May 2010.
Baxter also failed to disclose to investors that it wasn’t complying with a 2006 agreement with the U.S. Food and Drug Administration covering changes made to its Colleague infusion pump, according to a statement by lawyers for the pension plan that was distributed by Business Wire.
As a result of the misleading statements and omission, Baxter stock was artificially inflated, according to the statement. After Baxter disclosed on April 22 the pressures it faced in its plasma-derivative products business, its shares fell more than 13 percent to $51.13, according to the statement.
Deborah Spak, a Baxter spokeswoman, didn’t immediately return a call seeking comment after regular business hours.
U.S. regulators said July 13 that Baxter will have to replace about 200,000 Colleague infusion pumps with other models or issue refunds to customers. In May, Baxter said it was recalling the devices.
The FDA said in April that infusion pumps from all manufacturers were linked to 56,000 complaints of injuries, including deaths, from 2005 to 2009. A charge to Baxter of $588 million was recorded in the first quarter of 2010 as a result of the recall, the company said.
The case is City of Lakeland Employees Pension Plan v. Baxter International Inc., 10-06016, U.S. District Court, Northern District of Illinois (Chicago).S
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