Greenfield-based Elanco Animal Health Inc. (NYSE: ELAN) is facing a class action lawsuit accusing the company of securities fraud. The suit, filed in the U.S. District Court for the Southern District of Indiana, alleges Elanco violated federal securities laws by failing to disclose “material adverse facts” about its business operations.
The lawsuit was filed on behalf of shareholders who purchased Elanco stock between January 10 and May 6 by law firms in California and Florida.
Both note that Elanco reported a decline in revenue and channel inventory in its first quarter earnings report, which the company attributed to the impact of the COVID-19 pandemic.
Elanco’s stock price declined $3.05 per share as a result, ending at $19.88 per share.
The suit alleges Elanco made misleading claims throughout the quarter regarding certain aspects of its operations.
“Specifically, the lawsuit alleges, in part, that the Elanco defendants made positive statements about the Company’s business operations, while failing to disclose to investors that Elanco’s distributors were not experiencing sufficient demand to sell through inventory, and that as a result, the Company’s revenue was likely to decline,” law firm Barbuto & Johansson P.A. said in a news release.
In an email to Inside INdiana Business, a spokesperson for Elanco said the company does not comment on pending litigation.