<p align= justify >According to a press release dated April 2, 2007, the Complaint charges the Defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, for misrepresenting to investors known adverse side-effects associated with the use of Zyprexa, the Company’s best-selling drug and by failing to disclose a systematic and illegal campaign by the Company to increase Zyprexa sales by marketing Zyprexa for unapproved, off-label uses. The Complaint alleges that for over a decade, Eli Lilly knew of links between Zyprexa and extreme weight gain and diabetes. In addition, during the Class Period, the Company engaged in a scheme to market Zyprexa for uses that were not approved by the FDA, in violation of FDA regulations that proscribed such marketing. Federal and state regulators have commenced law suits against Lilly based on these marketing schemes and the Company has denied any wrongdoing.</p> <p align= justify > </p>
<p align= justify >The complaint further alleges that during the Class Period, in the face of mounting independent research connecting Zyprexa to diabetes and weight gain, and 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, and Lilly settled product liability lawsuits involving the drug, Lilly’s stock lost more than $30 billion in market value in connection with the fraud.</p>