September 2, 2014 / 4:24 PM / 4 years ago

U.S. court revives Botox-linked shareholder suit against Allergan

The head offices of Valeant Pharmaceuticals International Inc. are seen in Laval, Quebec May 20, 2014. REUTERS/Christinne Muschi

SAN FRANCISCO (Reuters) - A U.S. appeals court on Tuesday revived a 2010 shareholder lawsuit against Allergan Inc over allegations the company improperly marketed and labeled the cosmetic drug Botox.

The ruling, from the 9th U.S. Circuit Court of Appeals in San Francisco, said plaintiff shareholders had alleged enough specific facts to proceed.

Allergan, which paid a $375 million criminal fine after being accused of marketing Botox for off-label uses, said the allegations in the shareholder derivative lawsuit have not been proved and the company is confident it will be vindicated.

The lawsuit, filed in 2010, alleged that Allergan’s board authorized plans to promote Botox for off-label conditions like headaches and migraines despite knowing the limits of federal drug marketing rules.

A lower court judge in Santa Ana, California dismissed it, saying the shareholders had not followed proper procedure by first requesting that Allergan’s board file legal claims in the company’s own name.

The 9th Circuit on Tuesday disagreed, saying the shareholders alleged enough specifics to raise doubts as to whether the board faces liability, and as a result do not have to approach the board before heading to court.

The case in the 9th Circuit is Rosenbloom vs. Pyott, 12-55516.

Reporting by Dan Levine; Editing by Chizu Nomiyama and Paul Simao

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