Labaton Sucharow, lead counsel and representing the class and lead plaintiff Lance A. Johnson, reached an agreement to settle In re InterMune Securities Litigation for an aggregate payment of $10.4 million by the defendants.
InterMune is a biopharmaceutical company. Prior to the beginning of the class period, at least 90% of InterMune's revenue came from sales of a single product, Actimmune. Although Actimmune has been approved for certain limited uses by the Food and Drug Administration ("FDA"), there are few patients requiring Actimmune for such uses, and, during the class period, the overwhelming majority of Actimmune sales were for unapproved use in treating idiopathic pulmonary fibrosis ("IPF"), a disease that destroys the lungs and inevitably kills the patient, generally within just three years from the time of onset. Although federal law permits physicians to prescribe FDA-approved drugs for "off-label" uses, companies may not actively encourage sales of drugs for such uses; they may only provide doctors with information and educational material on unapproved uses. The action alleged violations of the federal securities laws by means of false and misleading statements relating to InterMune's improper marketing and sale of Actimmune and defendants' failure to disclose that, contrary to their representations during the class period, doctors became increasingly less receptive to prescribing this drug.