Shareholder Class Action Filed Against Eli Lilly

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Shareholder Class Action Filed Against Eli Lilly and Company by the Law Firm of Schiffrin Barroway Topaz & Kessler, LLP

RADNOR, Pa., April 2 /PRNewswire/ — The following statement was issued
today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:

Notice is hereby given that a class action lawsuit was filed in the
United States District Court for the Eastern District of New York on behalf
of all securities purchasers of Eli Lilly and Company (NYSE: LLY) (“Lilly”
or the “Company”) from March 28, 2002 and December 22, 2006, inclusive (the
“Class Period”).

If you wish to discuss this action or have any questions concerning
this notice or your rights or interests with respect to these matters,
please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check,
Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or
1-610-667-7706, or via e-mail at info@sbtklaw.com.

The Complaint charges Lilly and certain of its officers and directors
with violations of the Securities Exchange Act of 1934 for disseminating
false and misleading statements concerning Zyprexa, the Company’s
best-selling product.

More specifically, the Complaint alleges that the Company failed to
disclose and misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them: (a) that they were
aware of the clear link between Zyprexa and diabetes; and yet failed to
warn the public at large of the serious and material risks associated with
Zyprexa use; (b) that they had engaged in an illicit scheme to offset a
drop in sales that was certain to occur (and, in fact, did occur) when
reports of Zyprexa’s side effects surfaced, by creating a marketing plan
for Zyprexa which included, as a primary component, the evaluation and
pursuit of sales opportunities for the drug based on “off-label” uses; (c)
that the growth rate in Zyprexa sales would not be sustainable once
information about the health risks of Zyprexa and Lilly’s illegal marketing
plan were disclosed publicly; (d) that they disregarded data that
undermined the “safety and effectiveness” of the drug; (e) that their
“quality-assurance procedures relating to the quality and integrity of
scientific information and production” as it pertained to Zyprexa were
woefully inadequate; (f) that, by engaging in an illicit “off-label”
marketing” program as to Zyprexa, they had not “enhance[d]” its policies
and procedures designed to assure that its marketing and promotional
practices and physician communications “compl[ied] with promotional laws
and regulations;” (g) that they failed to warn the public of the serious
health risks associated with Zyprexa use and that its illicit “off-label”
marketing program was a direct violation of its own code of conduct as set
forth in “The Red Book;” and (h) that their illicit scheme of concealing
the side effects of Zyprexa and engaging in a massive illegal off- label
marketing campaign potentially subjected Lilly to substantial regulatory
fines, penalties and other legal action, thereby compromising the Company’s
overall financial condition and prospects.

Sales of Zyprexa grew from $3.69 billion to $4.42 billion between 2002
and 2004, and Lilly’s stock price increased from $43.75 per share to $76.95
per share between July 18, 2002 and May 7, 2004. Throughout the Class
Period, Lilly had internal information concerning a dangerous connection
between the use of Zyprexa and extreme weight gain and diabetes.

During the Class Period, in the face of mounting independent research
connecting Zyprexa to diabetes and weight gain, and the lawsuits by persons
who suffered these side-effects, Lilly emphatically denied any such link.
Yet, as public agencies raised warnings about the safety of Zyprexa, sales
slowed and Lilly’s stock price dropped from $76.95 per share to $50.34 per
share between May 7, 2004 and October 25, 2004 (representing a loss of
market capitalization of over $30 billion).

However, recent reports in The New York Times demonstrate that Lilly
knew of the very health risks that it denied repeatedly and that the
Company also purposefully marketed Zyprexa for illegal, off-label uses.

Thus, the over $30 billion dollar decline in Lilly’s stock price
between May 7, 2004 and October 25, 2004 was the direct result of
defendants’ fraudulent conduct. Articles appearing in The New York Times
between December 17 and 21, 2006 publicly disclosed for the first time that
(a) the Company had engaged in a decade-long effort to play down the health
risks of Zyprexa; and (b) Lilly actively marketed Zyprexa for illegal
off-label uses (such as to treat older patients with symptoms of dementia).

The publication of those articles caused an additional $3.49 per share
decline in the Company’s stock price (or 6.4 percent), and represented a
further market loss of approximately $3.5 billion.

Plaintiff seeks to recover damages on behalf of class members and is
represented by the law firm of Schiffrin Barroway Topaz & Kessler which
prosecutes class actions in both state and federal courts throughout the
country. Schiffrin Barroway Topaz & Kessler is a driving force behind
corporate governance reform, and has recovered billions of dollars on
behalf of institutional and individual investors from the United States and
around the world.

For more information about Schiffrin Barroway Topaz & Kessler or to
sign up to participate in this action online, please visit http://www.sbtklaw.com

If you are a member of the class described above, you may, not later
than June 1, 2007, move the Court to serve as lead plaintiff of the class,
if you so choose. A lead plaintiff is a representative party that acts on
behalf of other class members in directing the litigation. In order to be
appointed lead plaintiff, the Court must determine that the class member’s
claim is typical of the claims of other class members, and that the class
member will adequately represent the class. Under certain circumstances,
one or more class members may together serve as “lead plaintiff.” Your
ability to share in any recovery is not, however, affected by the decision
whether or not to serve as a lead plaintiff. You may retain Schiffrin
Barroway Topaz & Kessler or other counsel of your choice, to serve as your
counsel in this action.

CONTACT: Schiffrin Barroway Topaz & Kessler, LLP
Darren J. Check, Esq.
Richard A. Maniskas, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at info@sbtklaw.com

SOURCE Schiffrin Barroway Topaz & Kessler, LLP
FAIR USE NOTICE: This may contain copyrighted (© ) material the use of which has not always been specifically authorized by the copyright owner. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. It is believed that this constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. This material is distributed without profit.

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