Gordon v. Vanda Pharms Inc.

You or someone in your family may have purchased or otherwise acquired Vanda common stock during the Class Period.

The Court directed that the Notice be sent to Class Members because they have a right to know about the proposed Settlement of this class action lawsuit, and about all of their options, before the Court decides whether to approve the Settlement. If approved, the Settlement will end all of the Class’s claims against the Defendants. The Court will consider whether to approve the Settlement at a Settlement Hearing on January 5, 2023, at 10:00 a.m. . If the Court approves the Settlement, and after any appeals are resolved and the Settlement administration is completed, the claims administrator appointed by the Court will make the payments that the Settlement allows.

The Court in charge of the case is the United States District Court for the Eastern District of New York, and the case is known as Gordon v. Vanda Pharmaceuticals, Inc., et al., Case No. 1:19-cv-01108-FB-LB (E.D.N.Y.). This case was assigned to United States Magistrate Judge Lois Bloom. The company who is suing is called “Lead Plaintiff” and the company and person being sued are called “Defendants.”

Lead Plaintiff’s claims in the Action are stated in the Amended Complaint dated July 23, 2019 (the “Complaint”). Lead Plaintiff alleged that Defendants violated the Securities Exchange Act of 1934 (the “Exchange Act”).

On March 23, 2020, Defendants moved to dismiss the Complaint. On March 10, 2021, the Court issued an order granting in part and denying in part Defendants’ motion to dismiss, dismissing claims against three former Vanda executives who were named as defendants in the Complaint and sustaining claims against Vanda and Dr. Polymeropoulos. On April 23, 2021, Defendants filed an answer to the Complaint and asserted a number of defenses thereto.

During fact discovery, the parties produced and reviewed over 494,000 pages of documents and completed four depositions.

On October 29, 2021, Lead Plaintiff filed a motion for class certification which was fully briefed by the parties and remained under submission at the time the parties reached an agreement in principle to settle the Action.

The parties participated in a mediation of the Action before Jed D. Melnick, Esq., a nationally recognized mediator, and thereafter reached an agreement to settle the claims raised in the Action pursuant to the terms and provisions of the Stipulation, subject to approval by the Court.

The Settling Parties entered into the Stipulation on May 5, 2022. On September 15, 2022, the Court preliminarily approved the Settlement and authorized the Notice to be sent to potential Class Members.

The Court has not decided the Action in favor of Lead Plaintiff or the Defendants. The Settlement will end all the claims against the Defendants in the Action and avoid the uncertainties and costs of further litigation and any future trial. Assuming the Settlement is approved, affected investors will be eligible to receive compensation once the claims made against the Net Settlement Fund are validated and calculated.

As described above, Lead Plaintiff, through Lead Counsel, conducted an extensive investigation of the claims and underlying events and transactions relating to the Action, including a review and analysis of more than 494,000 pages of produced documents. Further, Lead Plaintiff and Lead Counsel participated in protracted and hard-fought arm’s-length negotiations and a mediation before an experienced mediator prior to entering into the Settlement.

The Defendants deny all allegations of liability contained in the Complaint and deny that they are liable to the Class. The Settlement should not be seen as an admission or concession on the part of the Defendants regarding the truth or validity of the allegations or claims in the Action, the lack of merit of any defenses or affirmative defenses, or their fault or liability for alleged damages by any Member of the Class.

The Court has issued an Order, for the purposes of the Settlement only, that everyone who fits the following description, and is not excluded by definition from the Class (see answer to Question 6 of the Notice), is a Member of the Class, or a “Class Member,” unless they take steps to exclude themselves:

All persons and entities who purchased or otherwise acquired Vanda common stock between November 4, 2015 and February 11, 2019, inclusive, and who were allegedly damaged thereby (the “Class Period”).

Receipt of the Notice does not mean that you are a Class Member. Please check your records or contact your broker to see if you purchased or otherwise acquired Vanda common stock during the Class Period as described above.

If you are not sure whether you are included, you can ask for free help by writing to or calling the Claims Administrator: Vanda Securities Litigation, Claims Administrator, P.O. Box 4419, Portland, OR 97208-4419, within the U.S. and Canada: 866-329-5443, or outside the U.S. and Canada: 503-597-5122, info@VandaSecuritiesLitigation.com. Alternatively, you can fill out and return the Proof of Claim and Release form (“Proof of Claim”) described in FAQ 8, to see if you qualify.

In the Settlement, Defendants have agreed to pay or cause to be paid $11,500,000.00 in cash, which will be deposited in an interest-bearing escrow account for the benefit of the Class (the “Settlement Fund”). The Settlement Fund will be divided, after deduction of Court-awarded attorneys’ fees and expenses, any award to Lead Plaintiff, settlement administration costs and any applicable taxes and tax expenses, among all Class Members who timely submit valid Proofs of Claim that are accepted for payment by the Court (“Authorized Claimants”).

The Plan of Allocation, discussed in the Notice, explains how the Net Settlement Fund will be allocated among purchasers and/or acquirers of Vanda common stock and how claimants’ “Recognized Losses” will be calculated. Your share of the Net Settlement Fund will depend on several things, including: (i) the quantity of Vanda common stock you bought or otherwise acquired; (ii) how much you paid for such stock; (iii) when you bought or otherwise acquired such stock; (iv) whether or when you sold such stock (and, if so, for how much you sold it); and (v) the amount of Recognized Losses of other Authorized Claimants.

It is unlikely that you will get a payment for your entire Recognized Loss, given the number of potential Class Members. After all Class Members have sent in their Proofs of Claim, the payment any Authorized Claimant will get will be their pro rata share of the Net Settlement Fund based on the Plan of Allocation approved by the Court. In general, an Authorized Claimant’s share will be his, her or its Recognized Loss divided by the total of all Authorized Claimants’ Recognized Losses and then multiplied by the total amount in the Net Settlement Fund. See the Plan of Allocation for more information.

To qualify for a payment, you must timely send in a valid Proof of Claim with supporting documents (DO NOT SEND ORIGINALS of your supporting documents). A Proof of Claim is enclosed with the Notice. You may also get copies of the Proof of Claim here. Please read the instructions carefully, fill out the Proof of Claim, include all the documents the form asks for, sign it, and mail it to the Claims Administrator by First-Class Mail, postmarked on or before December 28, 2022. A Proof of Claim may also be submitted online, here, on or before December 28, 2022. The Claims Administrator needs all of the information requested in the Proof of Claim in order to determine if you are eligible to receive a distribution from the Net Settlement Fund.

Any Class Member who fails to submit a Proof of Claim by the date identified above shall be barred from receiving any distribution from the Net Settlement Fund or payment pursuant to the Stipulation unless, by order of the Court or the discretion of Lead Counsel, late-filed Proofs of Claim are accepted, but shall in all other respects be bound by all the terms of the Settlement, including the terms of the Judgment and all releases provided for herein and therein, and will be permanently barred and enjoined from bringing any action, claim or other proceeding of any kind against any Released Person concerning the Released Claims.

The Court will hold a hearing on January 5, 2023 at 10:00 a.m., to decide whether to, among other things, approve the Settlement and the proposed Plan of Allocation. All Proofs of Claim must be submitted to the Claims Administrator, postmarked on or before December 28, 2022. If the Court approves the Settlement, there may still be appeals which would delay payment, perhaps for more than a year. It also takes time for all the Proofs of Claim to be processed. Please be patient.

Unless you exclude yourself, you will stay in the Class, which means that as of the date that the Settlement becomes effective under the terms of the Stipulation (the “Effective Date”), you will forever give up and release all “Released Claims” (as defined below) against the “Released Persons” (as defined below). You will not in the future be able to bring a case asserting any Released Claim against any Released Person.

“Related Parties” means each of a Defendant’s respective present and former parents, subsidiaries, divisions, controlling persons, associates, entities and affiliates and the respective present and former employees, members, partners, principals, officers, directors, controlling shareholders, agents, attorneys, advisors, accountants, auditors, consultants, and insurers of each of them; and the predecessors, successors, estates, heirs, executors, trusts, trustees, administrators, agents, representatives and assigns of each of them, in their capacity as such.

“Released Claims” means any and all claims, demands, rights, causes of action or liabilities of every nature and description whatsoever (including Unknown Plaintiffs’ Claims as set forth below), that could have been asserted in any forum, whether foreign or domestic, whether based on or arising under federal, state, local, or foreign statutory or common law, rule or regulation, whether fixed or contingent, foreseen or unforeseen, matured or unmatured, accrued or unaccrued, liquidated or unliquidated, whether direct, representative, class or individual in nature, based on, arising from or relating to: (i) the purchase or acquisition of the common stock of Vanda during the Class Period; and (ii) any of the allegations, acts, transactions, facts, events, matters, occurrences, representations or omissions involved, set forth, alleged or referred to, in this Action, or which could have been alleged in this Action. Released Claims does not include claims to enforce the Settlement.

“Released Persons” means each and all of the Defendants and their Related Parties.

“Releasing Plaintiff Party” or “Releasing Plaintiff Parties” means Lead Counsel, and each and every plaintiff, Class Member, and counsel to any plaintiff, and each of their respective past or present trustees, officers, directors, partners, employees, contractors, accountants, auditors, principals, agents, attorneys, predecessors, successors, assigns, representatives, affiliates, insurers, parents, subsidiaries, general or limited partners or partnerships, and limited liability companies; and the spouses, members of the immediate families, representatives, and heirs of any Releasing Plaintiff Party who is an individual, as well as any trust of which any Releasing Plaintiff Party is the settlor or which is for the benefit of any of their immediate family members. Releasing Plaintiff Parties does not include any Person who timely and validly sought exclusion from the Class.

“Unknown Plaintiffs’ Claims” means any Released Claims which Lead Plaintiff, Class Members, Defendants, or Releasing Plaintiff Parties do not know or suspect to exist in his, her or its favor at the time of the release of the Released Persons which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Persons, or might have affected his, her or its decision with respect to this Settlement, including, without limitation, any decision not to object to this Settlement or seek exclusion from the Class. With respect to any and all Released Claims, the Settling Parties stipulate and agree that, upon the Effective Date, Lead Plaintiff shall expressly waive and each of the Class Members and Releasing Plaintiff Parties shall be deemed to have, and by operation of the Judgment shall have, expressly waived the provisions, rights, and benefits of California Civil Code §1542, which provides:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

The Lead Plaintiff shall expressly waive and each of the Class Members and Releasing Plaintiff Parties shall be deemed to have, and by operation of the Judgment shall have, expressly waived any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code §1542. Lead Plaintiff, Class Members, and Releasing Plaintiff Parties may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the subject matter of the Released Claims, but Lead Plaintiff shall expressly settle and release and each Class Member, upon the Effective Date, shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. Lead Plaintiff acknowledges, and the Class Members and Releasing Plaintiff Parties shall be deemed by operation of the Judgment to have acknowledged, that the foregoing waiver was separately bargained for and an essential element of the Settlement of which this release is a part.

EXCLUDING YOURSELF FROM THE SETTLEMENT

If you want to keep any right you may have to sue or continue to sue the Released Persons on your own about the Released Claims, then you must take steps to exclude yourself from the Class. Excluding yourself is known as “opting out” of the Class. The Defendants may withdraw from and terminate the Settlement if potential Class Members who purchased or acquired in excess of a certain amount of Vanda common stock opt out of the Class.

If you timely and properly request exclusion from the Class, you will retain any rights you have to sue the Defendants yourself with respect to the Released Claims to the extent those claims are viable under the statute of limitations applicable to claims under the Exchange Act. You should note that if you exclude yourself from the Class, you may forfeit any claims you may have against the Defendants and Released Persons relating to your purchases or acquisitions of Vanda common stock during the Class Period to the extent the five-year statute of repose under the Exchange Act has expired. Before you decide to request exclusion from the Class, you are urged to consult your counsel, at your own expense, to fully evaluate your rights and the consequences of excluding yourself from the Class.

To “opt out” (exclude yourself) of the Class, you must deliver or mail a signed letter by First-Class Mail stating that you “request exclusion from the Class in Gordon v. Vanda Pharmaceuticals, Inc., et al., Case No. 1:19-cv-01108-FB-LB (E.D.N.Y.).” Your letter must state the date(s), price(s) and number of shares of your purchases and acquisitions of Vanda common stock during the Class Period. This information is needed to determine whether you are a Class Member. In addition, you must include your name, address, telephone number, and your signature.

You must submit your request for exclusion addressed to:

Vanda Securities Litigation
Claims Administrator
EXCLUSIONS
P.O. Box 4419
Portland, OR 97208-4419

The request for exclusion must be received on or before December 15, 2022. You cannot exclude yourself or opt out by telephone or by email. Your request for exclusion must comply with these requirements in order to be valid. If you are excluded, you will not be eligible to get any payment from the Settlement proceeds and you cannot object to the Settlement, the proposed Plan of Allocation or the application for attorneys’ fees and expenses.

No. Unless you exclude yourself, you give up any rights you may have to sue the Defendants and the other Released Persons for all Released Claims. If you have a pending lawsuit against any of the Defendants, speak to your lawyer in that case immediately. You must exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is December 15, 2022.

No. If you exclude yourself, do not send in a Proof of Claim to ask for any money, as any such Proof of Claim will be rejected.

The law firm of Robbins Geller Rudman & Dowd LLP was appointed to represent all Class Members. These lawyers are called Lead Counsel. You will not be separately charged for the services of these lawyers. The Court will determine the amount of Lead Counsel’s fees and expenses. Any fees and expenses awarded by the Court will be paid from the Settlement Fund. If you want to be represented by your own lawyer, you may hire one at your own expense.

Lead Counsel will apply to the Court for an award of attorneys’ fees of no more than one-third of the Settlement Amount and for litigation expenses that they have incurred in pursing the Action in an amount not to exceed $250,000, plus interest on both amounts from the date of funding at the same rate as earned by the Settlement Fund. Such sums will be paid from the Settlement Fund if they are approved by the Court.

If you are a Class Member and do not exclude yourself (“opt out”) in accordance with FAQ 11 above, you can object to any part of the Settlement, the proposed Plan of Allocation, and/or the application by Lead Counsel for attorneys’ fees and expenses and request for an award to Lead Plaintiff. You must write to the Court setting out your objection, giving reasons why you think the Court should not approve any part or all of the Settlement, the proposed Plan of Allocation, or the attorneys’ fee and expense request.

To object, you must send a signed letter stating that you object to the proposed Settlement in the case known as Gordon v. Vanda Pharmaceuticals, Inc., et al., Case No. 1:19-cv-01108-FB-LB (E.D.N.Y.). Any objections must: (i) state the name, address, and telephone number of the objector and must be signed by the objector; (ii) state that the objector is objecting to the proposed Settlement, Plan of Allocation, or application for attorneys’ fees or expenses in this Action; (iii) state the objection(s) and the specific reasons for each objection, including any legal and evidentiary support the objector wishes to bring to the Court’s attention; (iv) include documents sufficient to prove the objector’s membership in the Class, such as the number of shares of Vanda common stock purchased or acquired during the Class Period, as well as the dates and prices of each such purchase or acquisition; and (v) identify all other objections the objector and/or the objector’s counsel has made to any other class action. The Court will consider a Class Member’s objection only if the Class Member has complied with the above requirements.

Unless otherwise ordered by the Court, any Class Member who does not object in the manner described in the Notice will be deemed to have waived any objection and will not be able to appear separately at the Settlement Hearing or to make any objection to the Settlement, the proposed Plan of Allocation, and/or the application for attorneys’ fees and expenses. If you elect to “opt out,” you will not be entitled to share in the Settlement proceeds and will not have a right to make an objection to the Settlement, proposed Plan of Allocation and/or the application for attorneys’ fees and expenses.

Your objection must be filed with the United States District Court for the Eastern District of New York by hand or by mail such that it is received on or before December 15, 2022, at the address set forth below. You must also serve the papers on Lead Counsel and Defendants’ Counsel at the addresses set forth below so that the papers are received on or before December 15, 2022.

Objecting is simply telling the Court that you do not like something about the proposed Settlement. You can still recover from the Settlement. You can object only if you stay in the Class. Excluding yourself is telling the Court that you do not want to be part of the Class. If you exclude yourself, you have no right to object because the Action no longer affects you and you are no longer a Member of the Class.

The Court will hold a Settlement Hearing at 10:00 a.m. on January 5, 2023, in the United States District Court for the Eastern District of New York, United States Courthouse, 225 Cadman Plaza East, Brooklyn, NY 11201. Remote access to the final settlement approval hearing shall be afforded to the public by telephone: 888-363-4734, access code 4444221. This telephone number is afforded for people to listen but not to speak. At this hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. The Court also will consider the proposed Plan of Allocation for the proceeds of the Settlement and Lead Counsel’s application for attorneys’ fees and expenses. The Court will take into consideration any written objections filed in accordance with the instructions set out above in the answer to FAQ 16. We do not know how long it will take the Court to make these decisions.

No. Lead Counsel will answer any questions the Court may have, but you are welcome to come at your own expense. If you validly submit an objection, it will be considered by the Court. You do not have to come to Court to talk about it.

If you file an objection, you may ask the Court for permission to speak at the Settlement Hearing. To do so, you must include with your objection (see FAQ 16 above) a statement that it is your “notice of intention to appear in Gordon v. Vanda Pharmaceuticals, Inc., et al., Case No. 1:19-cv-01108-FB-LB (E.D.N.Y.).” Persons who object and want to present evidence at the Settlement Hearing must also include in their written objection the identity of any witness they may call to testify and exhibits they intend to introduce at the Settlement Hearing. You cannot speak at the hearing if you exclude yourself from the Class or if you have not provided written notice of your intention to speak at the Settlement Hearing according to the procedures described above and in the answer to FAQ 16.

You cannot speak at the hearing if you exclude yourself from the Class.

If you do nothing, you will get no money from this Settlement and you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against the Defendants and the Released Persons about the Released Claims in this case. To be eligible to share in the Net Settlement Fund you must submit a Proof of Claim (see FAQ 8). To start, continue or be a part of any other lawsuit against the Defendants and the other Released Persons about the Released Claims in this case you must exclude yourself from this Class (see FAQ 11).

The Notice summarizes the proposed Settlement. More details are in the Stipulation, dated as of May 5, 2022. You may review the Stipulation posted to this website and all documents filed in the Action during business hours at the Office of the Clerk of the United States District Court for the Eastern District of New York, United States Courthouse, 225 Cadman Plaza East, Brooklyn, NY 11201. You may also review the Important Documents section of this website here.

You also can call the Claims Administrator within the U.S. and Canada: 1-866-329-5443, or outside the U.S. and Canada call: 1-503-597-5122; call Lead Counsel Robbins Geller Rudman & Dowd LLP at: 1-800-449-4900 or by email at settlementinfo@rgrdlaw.com; write to Vanda Securities Litigation, Claims Administrator, P.O. Box 4419, Portland, OR 97208-4419.