Danish insulin-maker Novo Nordisk said it would fight a lawsuit filed in a Danish court on Friday which alleges the company made misleading statements about its insulin business in the United States, the company said in a statement.
“Novo Nordisk disagrees with the allegations and is prepared to defend the company in this matter,” the company said.
The securities lawsuit was filed by a number of shareholders who claims compensation worth a total of 11.785 billion Danish crowns ($1.75 billion) based on trading of Novo shares for two years from February 2015.
Filed in the Danish district court of Glostrup, the lawsuit alleges Novo Nordisk did not make “appropriate disclosures regarding its sales of insulin products in the USA,” Novo said.
Lawyer Thomas Ryhl, representing about 260 pension funds behind the lawsuit, said Novo failed to tell the entire truth behind the company’s increased revenue in the United States.
“They did, but they did it too late. What they said in 2016, they should have said already in 2014 and 2015,” he said.
The news had little immediate impact of Novo’s shares which traded up 1% at 1345 GMT.
“It is a very complex case and it’s not black-and-white. I am far from certain, that Novo will lose this case,” Sydbank’s analyst Soren Lontoft Hansen told Reuters.
“It will be a large fine if they do, but Novo has a strong financial foundation,” Hansen added.
According to Ryhl, Novo’s revenue from insulin sales in the U.S. increased between 2015 and 2017, but Novo’s rebates to pharmacy benefit managers equally rose in the same period.
“Actually, Novo’s profits from its insulin sales dropped, even though prices and sales increased,” he told Reuters.
In the period between February 2015 and February 2017, Novo’s share price jumped between 220 and 410 Danish crowns.
Novo said the Danish lawsuit contained “broadly similar” allegations to those of a previously announced securities class-action lawsuitfiled in the US in 2017 against the company.
That ongoing lawsuit alleges Novo has misled investors and colluded with industry peers to increase drug prices and artificially inflate its financial results, according to Novo.