Vanda Pharma Must Face Investors’ Off-Label Drug Scheme Lawsuit

Vanda Pharmaceuticals Inc. lost its bid to throw out allegations it failed to tell investors about a purported off-label drug promotion scheme, though some executives are free of the suit due to knowledge failures, a federal judge in New York said.

The biopharmaceutical company’s investors sufficiently allege that Vanda omitted material information, acted with the state of mind required for liability, and caused their losses, the U.S. District Court for the Eastern District of New York said. But the scienter allegations as to three of the four executives named as defendants fell short.

Investors in the would-be class accuse ...