The Police and Fire Retirement System of the City of Detroit has filed a lawsuit against a leading clinical research organization, accusing it of securities fraud.
The lawsuit alleges that ICON PLC and its top executives, Stephen Cutler and Brendan Brennan, misled investors about its financial health and business prospects during an industry downturn. According to the complaint, between July 27, 2023, and January 13, 2025, ICON made false statements regarding its ability to secure new business amid cost-cutting by major pharmaceutical clients like Pfizer. Despite assurances that ICON was well-positioned to gain market share due to its capabilities and strong demand indicators, such as high RFP (Request for Proposal) volumes, the reality was starkly different. The retirement system claims that ICON experienced a significant decline in demand as its largest customers diversified their business away from the company. Additionally, many RFPs touted by ICON were allegedly not intended to lead to actual contracts but were merely exploratory.
The truth began unraveling on October 23, 2024, when ICON announced a $100 million revenue shortfall for Q3 2024 and reduced its full-year revenue guidance by $220 million at the midpoint. This revelation came despite previous reassurances about stable demand. The company's stock price plummeted over 21% following these disclosures. Further admissions by ICON's management revealed that they had long been aware of their largest customers' intentions to reduce reliance on ICON post-merger with PRA Health Sciences in 2021.
The plaintiffs are seeking compensatory damages for all affected investors who purchased or acquired ICON shares during the specified period. They allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and seek relief, including damages with interest, legal fees, and any other relief deemed appropriate by the court.
The plaintiffs are represented by attorneys Javier Bleichmar and Nancy A. Kulesa of Bleichmar Fonti & Auld LLP. The case was filed in the Eastern District of New York under Case No. 2:25-cv-1807.