ANDRX Corporation Securities Litigation

On March 13, 2003 and on various dates thereafter, seven putative federal securities class action complaints (the "Complaints") were filed1 in the United States District Court for the Southern District of Florida on behalf of a class of persons who purchased the common stock of Andrx and were injured thereby. These cases identified a putative class period of March 1, 2002 to and including March 4, 2003. The first-filed case, styled Joseph Stocke v. Andrx Corp., et al., 03-CIV-20593, was assigned to United States District Judge Jose E. Martinez.

In the Complaints, Lead Plaintiffs, on behalf of those persons who purchased the common stock of Andrx during the period between March 1, 2002 and March 4, 2003, inclusive (the "Class Period"), alleged that Defendants violated the Securities Exchange Act of 1934 (the "Exchange Act").

The Complaints alleged that Defendants artificially inflated the price of Andrx common stock by failing to disclose to the investing public that the generic version of Wellbutrin® SR for which Andrx was seeking FDA approval had significant hurdles to FDA approval, including a short expiration period, and that the stockpile of this drug the Company had manufactured in anticipation of FDA approval would likely expire before FDA approval was obtained. Andrx had told investors that it expected FDA approval to market its generic version of Wellbutrin® SR, an antidepressant, by year-end 2002. CEO Lane told investors on October 31, 2002 that Andrx was continuing "to build inventories of [Wellbutrin®] and other generic products prior to their launches." No disclosure was made, however, of the drug’s alleged short commercial life and the likelihood that if the Company’s stockpile of the drug was not soon sold, the Company would need to write off the inventory’s value or record a charge. On March 5, 2003, Andrx announced that it would take a $26.3 million charge against earnings for its generic versions of Wellbutrin® SR/Zyban® that were produced but not marketed because of FDA concerns over the drugs’ expiration dating. Andrx further announced that it would have to amend its FDA applications to produce generics of these drugs. Lead Plaintiffs allege that the Company’s stock price sank 31% on the news.

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