Forest Agrees to Settle Securities Class Action for $65 Million

On Monday, November 10, 2008, Forest Laboratories, Inc. filed a quarterly report with the Securities and Exchange Commission, revealing that it had agreed in principle to a settlement amounting to $65 million in In re: Forest Laboratories, Inc. Securities Litigation, 05-cv-02827 (S.D. NY).

Specifically, Forest represented in the “Legal Proceedings” section of its form 10-Q, which is available here, Forest Form 10-Q (Nov. 10, 2008), that it has entered into a “Memorandum of Understanding,” dated September 22, 2008, agreeing in principle with the plaintiffs to settle all claims for $65 million.

As we discussed in an August 2008 blog, Celexa/Lexapro Securities Case Blog (Aug. 27, 2008), the plaintiffs in the case are alleging that Forest committed securities fraud, driving up the price of its stock, by misrepresenting the safety of its antidepressant drugs, Celexa and Lexapro, for use in the pediatric population. Of course, the labeling for both drugs now bears a conspicuous black box warning advising of the risk of suicidality posed by the drugs to those under the age of 25. Lexapro Prescribing Information (Aug. 2008)