Eli Lilly Moving Off DoJ Inquiry, But News Is Old
- Shares of Eli Lilly and Co (NYSE: LLY) were trading down 1.4 percent on Friday.
- The decline appears to have been triggered by news about the Department of Justice conducting an inquiry of agreements with wholesalers.
- However, analysts are saying the news should have been priced into the shares several days ago.
Shares of Eli Lilly were falling on Friday morning, after news about the U.S. Department of Justice conducting an inquiry regarding the company's "treatment of certain distribution service agreements with wholesalers when calculating and reporting Average Manufacturer Prices in connection with the Medicaid drug rebate program."
However, the news is not new. The investigation had been disclosed in a Form 10-Q filed with the U.S. Securities and Exchange Commission on October 30, 2015. Nonetheless, it seems like the news had gone unnoticed until Friday.
According to the filing, the company is voluntarily responding to the U.S. Attorney's office for the Eastern District of Pennsylvania and the Civil Division of the U.S. Department of Justice’s request.
"We are also a defendant in other litigation and investigations, including product liability, patent, employment, and premises liability litigation, of a character we regard as normal to our business," the Form 10-Q added.
In a statement to Benzinga, an Eli Lilly spokesperson said the company is aware of the inquiry and "cannot speak to the performance of LLY stock, but can confirm that while the disclosure was made a week ago, it did not generate much media interest until today."
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
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