Salix faces shareholder lawsuit after restating drug inventories

A lawsuit has been filed on behalf of Salix Pharmaceuticals shareholders alleging that the Raleigh company made false and misleading statements about demand for its drugs.

The filing comes after Salix had its market value reduced by $3 billion as its stock plunged 34 percent on Friday. Investors were reacting to Salix restating the inventory levels for several of its drugs. The company significantly revised upward its inventory levels, thus leading investors to question the accuracy of its previous earnings reports.

The lawsuit, which was announced by the Shareholders Foundation, alleges that Salix’s quarterly and annual net revenue and earnings per share were overstated, and that its internal controls over financial reporting were weak.

The foundation is seeking other shareholders to join the suit.