More than a year after denying allegations it surreptitiously attempted to boost its stock price, Galena Biopharma has agreed to pay $20 million to settle a shareholder lawsuit that accused the drug maker of a misleading marketing campaign and insider trading.
The settlement resolves an unusual episode that raised questions about the extent to which some biotech companies may have been aggressively promoting their prospects during a bull market in biopharma stocks. However, we should note that Galena and its executives and directors did not admit any wrongdoing.
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According to the lawsuit, which was filed last year in federal court in Portland, Ore., Galena purportedly hired a public relations firm to write articles — using aliases — that were published in 2013 on the Seeking Alpha investor website and which were designed to promote its stock.