New Jersey District Court Grants Dismissal of Securities Class Action Against Bausch Health
02.14.25
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On February 12, 2025, Simpson Thacher successfully secured a significant win for Bausch Health Cos. Inc. in the U.S. District Court for the District of New Jersey when the judge granted a motion to dismiss in a proposed class action that accused the pharmaceutical company of misleading shareholders about the Company's financial stability, including with respect to a proposed spinoff of its subsidiary Bausch + Lomb and with respect to the strength of its Xifaxan® patent. U.S. District Judge Zahid N. Quraishi dismissed the case without prejudice and found that the complaint failed to identify any actionable misstatements or omissions and did not adequately plead scienter. Following an initial complaint that was filed in July 2023, an amended class action complaint was filed in January 2024 that alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. In the February 12, 2025 order granting motion to dismiss, Judge Quraishi credited the Firm’s arguments that the complaint failed to demonstrate how statements pertaining to the spinoff and patents were materially misrepresentations or omissions not protected by the Private Securities Litigation Reform Act (PSLRA), the allegations of fraud were speculative and not properly pled to overcome the PSLRA’s safe-harbor, and the Plaintiffs failed to adequately plead scienter.
The Simpson Thacher team included Craig Waldman, Jonathan Youngwood, Meredith Karp and Jonathan Kaplan.