IsoRay of Richland agrees to settle class action suit

IsoRay Medical of Richland has reached a tentative settlement in a class action lawsuit filed in federal court.

It has agreed to pay $3.5 million, which would be covered by its insurance, subject to court approval.

IsoRay denies the allegations made against the company, but agreed to the settlement to eliminate the uncertainty, distraction, burden and expense of further litigation, it said in a statement.

The lawsuit was filed over a news release in May 2015 describing the results of a study looking at lung cancer treatment with an IsoRay medical isotope product. The price of the stock nearly doubled by the next day.

But a day later investment website The Street accused IsoRay of making misleading statements about the study and the price of the stock dropped. The lawsuit seeks compensation for investors who lost money.

IsoRay argued that if it intended to mislead investors and analysts it would not have provided an online link to the study with the news release.

This story was originally published September 30, 2016 at 2:41 PM with the headline "IsoRay of Richland agrees to settle class action suit."