Portola Pharmaceuticals, Inc.

On January 9, 2020, Portola announced preliminary net revenues of only $28 million for the fourth quarter of 2019. Portola attributed the result to a $5 million reserve adjustment for short-dated product, and flat quarter-over-quarter demand. 

On this news, the Company’s share price fell $9.98, or approximately 40%, to close at $14.76 per share on January 10, 2020, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Portola’s internal control over financial reporting regarding reserve for product returns was not effective; (2) that Portola was shipping longer-dated product with 36-month shelf life; (3) that Portola had not established adequate reserve for returns of prior shipments of short-dated product; (4) that, as a result, Portola was reasonably likely to need to “catch up” on accounting for return reserves; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.