Securities Litigation Against Life Sciences 2025 YIR

Oklahoma Firefighters Pension & Retirement System v. Biogen Inc., 348 F.R.D. 268 (D. Mass. 2025)

The plaintiffs filed an action against Biogen Inc. and two of its executives for securities fraud in violation of Section 10(b) and SEC Rule 10b-5 thereunder and control-person liability under Section 20(a) of the 1934 Act. The plaintiffs alleged that the defendants made fraudulent misrepresentations during the rollout of Biogen’s Alzheimer’s drug Aduhelm. On June 8, 2021, the day after Aduhelm received FDA approval, the CEO stated on a conference call that Medicare fee-for-service coverage was “automatically presumed with FDA approval” and that Biogen expected most Medicare Advantage and commercial plans to define their medical policies regarding Aduhelm within the first several months after launch, with another executive making an essentially identical statement the same day. The plaintiffs alleged those statements were false and misleading when made because, as early as summer 2020, Biogen purportedly expected that broad FDA approval would likely prompt the Centers for Medicare & Medicaid Services (CMS) to initiate a 12- to 18-month national coverage determination (NCD) process, which typically results in narrower coverage than FDA approval itself would indicate. Plaintiffs sought certification for a putative class with a class period ending January 11, 2022, the date on which CMS released a draft opinion limiting Medicare reimbursement for Aduhelm to patients enrolled in clinical trials.

In assessing the plaintiffs’ motion for class certification, the court found the Rule 23 requirements satisfied. On the question of predominance, Biogen argued it could rebut the presumption of reliance by showing a total lack of price impact. Biogen argued that the plaintiffs’ own expert event study demonstrated no statistically significant price increase or decrease either at the “front end,” when the alleged misrepresentations were made, or at the “back end,” when they were allegedly corrected. The court found sufficient evidence of price impact, noting in particular that a statistically significant drop at the 99% confidence level occurred on July 15, three days after the NCD announcement. However, the court shortened the class period to end on July 12, 2021, crediting Biogen’s argument that its announcement of an NCD review process on that date corrected the initial alleged misrepresentations by making clear that the process of determining Medicare coverage for Aduhelm would be lengthy and not automatic. But the court rejected Biogen’s proposed earlier end date of June 28, 2021, when The Wall Street Journal published an article that cast doubt on Medicare access for Aduhelm. The court found that a single article representing no more than informed speculation about an NCD did not unambiguously cure the misrepresentations and that accepting Biogen’s argument would require an impermissible loss causation analysis at the class certification stage. The court likewise rejected the plaintiffs’ argument that the class period should extend beyond July 12, finding that the July 12 disclosure of a lengthy, non-automatic coverage determination process fully corrected the initial alleged misrepresentations. The court thus certified a narrowed class of those who purchased Biogen stock during the narrow period between June 8, 2021, and July 12, 2021.

Paice v. Aldeyra Therapeutics Inc., 2025 WL 815065 (D. Mass. Mar. 14, 2025)

The plaintiffs brought a class action against Aldeyra Therapeutics Inc. and certain executives alleging violations of sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 thereunder. The class action followed FDA’s 2023 denial of new drug applications (NDAs) for two of Aldeyra’s drugs: reproxalap, a topical solution developed for the treatment of dry eye disease, and ADX-2191, an injectable solution designed to treat a form of ocular cancer. The plaintiffs alleged that statements concerning (1) the progress of clinical trials, (2) the timeline of the NDA submissions and potential commercialization, and (3) the content of the NDAs were false or misleading. In the plaintiffs’ opinion of nonbinding FDA guidance, neither the trials Aldeyra used to support the reproxalap NDA nor the methods used for the ADX-2191 submission were compliant. But the court found that the plaintiffs’ own interpretation of FDA guidance did not overcome the defendants’ reasonable interpretation and, in some cases, directly contradicted the text of the guidance itself. Accordingly, the court found that the plaintiffs failed to plead scienter. Furthermore, the court found that Aldeyra did not knowingly or recklessly make any false or misleading statements about the chemistry, manufacturing, and control data included in the NDA, because the complaint did not include any allegations about defendants’ knowledge concerning the data prior to an FDA request for that data, a request which the company had publicly disclosed. Similarly, statements about the timeline for the NDAs were not false or misleading because the complaint did not contain any allegation suggesting that those timelines were incorrect when they were made. The court rejected the plaintiffs’ other allegations concerning scienter and found a lack of any plausible alleged false or misleading statement, or loss causation. The case was dismissed in full without leave to amend.

In re Apellis Pharmaceuticals., Inc. Securities Litigation, 2025 WL 836491 (D. Mass. Mar. 17, 2025)

The plaintiffs sued Apellis Pharmaceuticals Inc. and its chief executive officer, alleging violations of sections 10(b) and 20(a) of the 1934 Act for certain statements regarding the Phase 3 trial of its product SYFOVRE, which was developed to treat geographic atrophy, a condition that can lead to blindness. Throughout the clinical trials for SYFOVRE, Apellis reported that no events of retinal vasculitis, a severe form of retinal blood vessel inflammation that can cause complete vision loss, were observed. After the product was approved and on the market, however, cases of retinal vasculitis in patients treated with SYFOVRE were reported. Apellis stock dropped 38%, and Apellis updated SYFOVRE’s label to include a warning for retinal vasculitis. The plaintiffs alleged that Apellis’ statements about the lack of retinal vasculitis in the trial were materially misleading because Apellis omitted (1) the frequency of the testing for retinal vasculitis and (2) the inadequacy of its protocol to detect retinal vasculitis.

The defendants moved to dismiss the plaintiffs’ claims, and the court granted the motion with prejudice. With respect to the plaintiffs’ first theory, the court observed that the frequency of the testing was publicly available in published protocols on ClinicalTrials.gov and repeatedly disclosed in presentations to investors throughout the class period. Accordingly, a reasonable investor would have known the rate at which Apellis tested for retinal vasculitis. As for the second theory, the court found there was no material omission regarding inadequate protocols, because a difference of scientific opinion is insufficient to plead securities fraud. This was especially true given that FDA approved Apellis’ protocols, and the approved protocols were publicly disclosed. The court also found that the plaintiffs failed to plead scienter for either theory, explaining that the plaintiffs’ allegations that Apellis paid “close attention” to the trial and the existence of increased dropout rates in the trial were not, on their own, sufficient. The court also rejected a theory that the defendants had an alleged “propensity to lie,” because the plaintiffs did not plead that the defendants knowingly provided false information in any specific instance. 

This case is currently on appeal.

Celano v. Fulcrum Therapeutics, Inc., 2025 WL 928783 (D. Mass. Mar. 27, 2025)

The plaintiff brought a putative securities fraud class action against Fulcrum Therapeutics Inc. and certain former executives, alleging violations of sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 thereunder, claiming that the defendants misled investors about the safety and regulatory prospects of Fulcrum’s lead drug candidate, FTX-6058, an investigational treatment for sickle cell disease. The lawsuit followed Fulcrum’s announcement that FDA had issued a clinical hold on the investigational new drug application (IND) for FTX-6058. The plaintiff alleged that FTX-6058 posed safety risks and did not meet FDA standards for human trials and that defendants knew of these risks but failed to disclose them based on certain preclinical data. The court concluded the vast majority of challenged statements were nonactionable puffery or not sufficiently pled to be false. The court also held that the plaintiff failed to plead scienter with respect to any of the challenged statements because there were no allegations that the defendants knew their statements were misleading or had received FDA feedback suggesting serious safety concerns prior to the clinical hold. The court also pointed to FDA’s conduct prior to the clinical hold of allowing clinical trials to proceed and granting orphan-drug and fast-track designations, as well as FDA’s subsequent decision to lift the clinical hold, as undercutting any inference of fraudulent intent. Accordingly, the court granted the defendants’ motion to dismiss in full. 

Shash v. Biogen Inc., 2025 WL 928779 (D. Mass. Mar. 27, 2025)

In 2021, the plaintiffs brought a putative securities fraud class action against Biogen Inc. and certain of its executives for alleged violations of sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 thereunder, based on alleged false and misleading statements concerning aducanumab, a drug intended to treat Alzheimer’s disease by targeting aggregated amyloid beta. In September 2022, the district court granted the defendants’ motion to dismiss, finding that the plaintiffs failed to allege that the challenged statements were misrepresentations, failed to plead scienter, and failed to plead loss causation. On appeal, the First Circuit affirmed dismissal of all claims except as to a single statement the First Circuit concluded was not “fairly align[ed]” with certain subgroup data from aducanumab’s clinical trials.  

On remand, the defendants moved for judgment on the pleadings. They argued that the plaintiffs’ surviving claims must be dismissed because the plaintiffs purchased Biogen stock shortly after the alleged corrective disclosure and therefore could not, as a matter of law, have relied on any misrepresentations corrected by the disclosure. The plaintiffs responded that they were entitled to a presumption of reliance under the fraud-on-the-market doctrine, alleging that at the time of their purchases, the market price was still artificially inflated by the alleged misrepresentations and had yet to absorb the impact of the corrective disclosure. The court denied the defendants’ motion, finding that the plaintiffs’ allegations sufficiently established a presumption of reliance and that the precise question of when the corrective disclosure was fairly reflected in the market price of Biogen’s stock was a question of evidence and fact that could not be resolved at the pleading stage.

Roth v. Armistice Capital, LLC, 151 F.4th 21 (2025) (2d Cir. 2025)

The plaintiff sued Armistice Capital LLC and Armistice Capital Master Fund Ltd. (together, “Armistice”) and Armistice’s managing member, Stephen Boyd, claiming that Armistice and Boyd engaged in a “short-swing” transaction in violation of Section 16(b) of the 1934 Act. Armistice owned shares of a biotech company. Armistice also held two sets of warrants in the company’s common stock, giving it the right to buy additional shares. The warrants included a “blocker provision” that limited the total shares Armistice was permitted to hold and would block the exercise of the warrants if Armistice’s total holdings following the exercise would exceed a threshold of outstanding shares. The plaintiff alleged that after joining the company’s board of directors, Boyd convinced the board to amend Armistice’s warrants, which later allowed Armistice to exercise the warrants following a positive announcement on one of the company’s drug development programs. The plaintiff sought to disgorge Armistice’s $87 million profit from the trade. However, the district court granted summary judgment and dismissed the plaintiff’s claim, because Rule 16b-3(d) precluded liability due to the fact that the company’s board was “fully aware that [Armistice was an] insider[] and unanimously approved of the warrant amendments to increase Armistice’s equity cap.” The Second Circuit affirmed and confirmed that although Armistice and Boyd were statutory insiders subject to Section 16(b), they were exempt from liability under Rule 16b-3(d) for transactions that were “approved by the board of directors of the issuer.” The Second Circuit also rejected the plaintiff’s argument that it was not enough that the rest of the company board understood Boyd and others served as the representatives of Armistice. The court stated the plaintiff’s novel theory would have required Armistice to formally “disclose . . . its status as a director by deputization.” The court found it sufficient that the board “unquestionably understood” that Armistice’s members serving on the same board represented Armistice at the time the warrants were amended.

Mangrove Partners Master Fund, Ltd. v. Bristol-Myers Squibb Co., 2025 WL 1420914 (2d Cir. May 16, 2025)

The plaintiffs brought an action against Bristol-Myers Squibb Co. (BMS) and 15 of its current and former executives and directors for alleged violations of sections 11, 12(a), and 15 of the 1933 Act and sections 10(b), 14(a), and 20(a) of the 1934 Act and Rule 10b-5 thereunder. The plaintiffs alleged that statements about the value of contingent value rights (CVRs) issued by BMS to former stockholders of Celgene Corporation (Celgene), with which BMS had merged, were materially false in light of BMS’ failure to disclose steps purportedly taken to slow down the regulatory approval process. As a part of the merger, Celgene stockholders received CVRs that depended on FDA approval of certain drugs within a certain time frame. One such drug was Liso-cel, which was not approved until after the deadline had passed. The plaintiffs alleged this was because BMS intentionally delayed approval to avoid paying the CVRs. The district court dismissed all claims against the defendants, and the Second Circuit affirmed. In affirming, the Second Circuit first noted that the district court correctly found that certain statements were protected under the safe harbor for forward-looking statements. These statements — about Liso-cel’s expected launch date, the likelihood of FDA approval, the value of the CVRs, and BMS’ agreement to undertake “diligent efforts” — were forward-looking and were accompanied by detailed and extensive warnings about the CVR payments. The plaintiffs’ allegations that the defendants deliberately slow-rolled the Liso-cel approval, meanwhile, did not change this analysis, because the plaintiffs failed to allege that the defendants had actual knowledge of such a scheme. Additionally, the Second Circuit found that the claims under Section 10(b) failed because the plaintiffs did not adequately allege scienter. The court noted that generic motivations, such as corporate profitability or the desire of an individual defendant to keep their job, were insufficient to create a strong inference of scienter. And the fact that the individual defendants did not purchase CVRs themselves had no bearing on scienter because there was no allegation that such decision was unusual, and the circumstantial evidence that the defendants supposedly knew of a scheme to slow-roll Liso-cel suggested only that defendants were aware of delays. 

Kempen International Funds (Kempen International Funds - MercLin Global Equity) v. Syneos Health, Inc., 2025 WL 949576 (S.D.N.Y. Mar. 28, 2025)

The plaintiffs alleged that Syneos Health Inc., a biopharmaceutical company, violated sections 10(b) and 20(a) of the 1934 Act and SEC Rule 10b-5 for making false and misleading statements regarding key performance metrics and the company’s post-pandemic recovery. The court dismissed the plaintiffs’ first amended complaint because the plaintiffs had engaged in impermissible “puzzle pleading,” which left the court “to search the long quotations in the complaint for particular false statements and then determine on its own initiative how and why the statements were false and how other facts might show a strong inference of scienter.” The court gave the plaintiffs leave to amend, giving specific instructions on what an amended complaint would need to include. The plaintiffs then filed a second amended complaint, which the court also dismissed because it “didn’t come close to addressing these issues.” The court outlined two main issues with the new complaint. First, it did not address each allegedly misleading statement on its own terms and instead continued to combine multiple statements into block quotes, ultimately including over 100 allegedly false or misleading statements. The court stated that “[p]laintiffs’ throw-everything-at-the-wall approach is inconsistent with the Private Securities Litigation Reform Act’s (PSLRA) particularity requirements.” Second, “The complaint addresses falsity and scienter as to each grouping of disparate allegations in a sprawling multi-page and multi-part paragraph.” The court pointed to several substantive issues with the plaintiffs’ argument, including the fact that the plaintiffs relied heavily on slides from a January 2021 presentation without showing how the slides demonstrate the falsity of the defendants’ statements. Nevertheless, the court gave plaintiffs one more chance to amend, writing that it was “unclear whether or not there’s a viable case lurking underneath the surface.”

In re Axsome Therapeutics, Inc. Sec. Lit., 2025 WL 965265 (S.D.N.Y. Mar. 31, 2025)

The plaintiffs filed a lawsuit under sections 10(b) and 20(a) of the 1934 Act, alleging that Axsome Therapeutics, a biopharmaceutical company that develops therapies for the treatment of central nervous system disorders, and certain of its executive officers made material omissions and misstatements related to the development, manufacturing, and FDA approval timeline and prospects of AXS-07, its drug for potential treatment of migraine headaches. Axsome filed an NDA for AXS-07 after publicly stating that it believed its existing suppliers would be capable of providing the supplies necessary for clinical trials. The plaintiffs, relying on statements by a former employee, alleged that clinical trials were repeatedly delayed because equipment issues at one of Axsome’s vendors meant Axsome could not procure enough AXS-07. Axsome publicly disclosed these issues shortly before the issuance of a complete response letter from FDA. The defendants moved to dismiss, which the court granted in part and denied in part. The court found that the statements about manufacturing capabilities for AXS-07 were plausibly false and misleading because they omitted information about supply issues that had already come to pass and affected Axsome’s capabilities and the likelihood of NDA approval for AXS-07. The court rejected the defendants’ counterarguments that the statements were inactionable forward-looking statements, opinion, and/or corporate puffery because the statements were concrete and contradicted by information about events that had already transpired that were known to the defendants at the time they made the challenged statements. The court also found scienter plausibly alleged as to the individual defendants because they were alleged to be familiar with AXS-07’s manufacturing process and thus had access to information that contradicted what was conveyed in the company’s public statements. Specifically, one individual defendant described himself as “the most responsible person” at Axsome, and the confidential witness alleged the other had specific knowledge of the manufacturing issues. The scienter of these individual defendants was, therefore, imputed to Axsome. However, the court dismissed the claims as to certain of the individual defendants because plaintiffs failed to plead either (1) that the defendants made any of the challenged statements, or (2) specific allegations of scienter as to those defendants. 

In re Checkpoint Therapeutics Sec. Litig., 2025 WL 1434400 (S.D.N.Y. May 19, 2025)

The plaintiff alleged that Checkpoint Therapeutics Inc. and its CEO violated sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 thereunder by making false and misleading statements about the prospects for FDA approval of cosibelimab, a skin cancer therapy. To market cosibelimab, Checkpoint had to submit to FDA a BLA that included an inspection of the manufacturing facility owned by third-party Samsung Biologics (Samsung). The plaintiff contended that Checkpoint made misleading statements both before and after FDA inspection. Before the inspection, the plaintiff alleged, Checkpoint failed to disclose that Samsung had received 10 Form 483s (notices of noncompliance) from FDA inspections since 2016, although none related to Checkpoint. After the inspection, which resulted in another Form 483 that led inspectors to recommend withholding BLA approval for cosibelimab, the plaintiff alleged that Checkpoint (1) failed to disclose that Samsung had received the Form 483, and (2) inflated the likelihood that Samsung would address the issues in a timely way. 

The court determined that the vast majority of the defendants’ challenged statements regarding their expectations about FDA approval and the timeline for cosibelimab’s commercial release were inactionable puffery, statements of opinion, and/or forward-looking statements. Regarding pre-inspection statements, the court specifically found that the plaintiff did not adequately allege that the defendants knew about Samsung’s 10 prior Form 483s or that any of these had led to BLA denials. As to post-inspection statements, the court held that Checkpoint and its CEO “did not have a freestanding legal duty to disclose” the Form 483 until it became clear that the form would hinder FDA approval of their specific product. The court also rejected each of the plaintiff’s scienter allegations as insufficient to give rise to the requisite strong inference of scienter. The CEO’s incentive compensation structure alone could not establish scienter. The CEO’s stock sales were not suspicious because they were de minimis and occurred 18 months before the corrective disclosure, and because the CEO’s stock holdings actually increased during the alleged class period. Likewise, the court held that a company’s desire to maintain a high share price is too general a motive for scienter. Ultimately, the court reasoned that the more plausible inference was that the CEO, who had no affirmative duty to mention the Form 483, did not do so because he believed cosibelimab remained on track for timely FDA approval. Accordingly, the court granted the defendants’ motion to dismiss.

Huey v. Anavex Life Sciences Corp. et al., 2025 WL 1707581 (S.D.N.Y. June 18, 2025)

The plaintiff filed suit against Anavex Life Sciences Corporation and its CEO, alleging securities fraud under sections 10(b) and 20(a) of the 1934 Act for certain statements made regarding two clinical trials of Anavex’s drug candidate to treat Rett syndrome, a rare neurological disorder. There are three available endpoints for Rett syndrome trials to test the efficacy of the drug: Rett Syndrome Behavioral Questionnaire (RSBQ), Clinical Global Impression Improvement (CGI-I), and Rett Syndrome Behavioral Questionnaire Area Under the Curve (RSBQ-AUC), which combines RSBQ and CGI-I. Anavex utilized the RSBQ-AUC endpoint in an earlier study. Upon conclusion of that study, the company expressed its intention to use the same endpoint for its later study. The plaintiff alleged that the CEO’s statements that the later trial would use the RSBQ-AUC endpoint were false or misleading because the defendants knew that FDA had supposedly told a competitor that such an endpoint was not permitted. The court dismissed the plaintiff’s claims for earlier statements regarding Anavex’s intended use of the RSBQ-AUC endpoint because Plaintiff pled no fact to suggest the statements were not “literally true.” However, FDA eventually provided input to Anavex on its upcoming study. Anavex published a press release that acknowledged FDA’s input on endpoints but did not state that FDA told Anavex that RSBQ-AUC was unacceptable. After this, Anavex held an investor conference call during which it conceded that it would use RSBQ, rather than RSBQ-AUC, for the later trial. The court found the press release to be plausibly materially misleading because it failed to correct prior material statements about the endpoint for the later trial. The court dismissed other alleged misstatements, such as that Anavex was “encouraged” by the results of its earlier trial, as inactionable puffery. For the sole surviving statement, the court also found sufficient allegations of scienter because of the defendants’ alleged knowledge of FDA’s input at the time of the press release. Nevertheless, the court dismissed the plaintiff’s claims based on the press release statement because plaintiff failed to plead loss causation. Anavex’s stock increased by 5.76% on the trading day following the alleged corrective statement. The court rejected the plaintiff’s arguments that it should evaluate the losses that occurred in the two days following. This case is on appeal.

Sporn v. BrainStorm Cell Therapeutics, Inc. et al., 2025 WL 2643983 (S.D.N.Y. Sept. 15, 2025)

The plaintiffs sued BrainStorm Cell Therapeutics Inc. (BrainStorm), a clinical-stage biopharmaceutical company that develops products to treat ALS and other neurogenerative disorders, and certain of BrainStorm’s executives under sections 10(b) and 20(a) of the 1934 Act. The plaintiffs alleged that BrainStorm made false or misleading statements about the results of, and FDA’s feedback regarding, the clinical trials of NurOwn, BrainStorm’s lead ALS therapy. For example, the plaintiffs alleged that the defendants misrepresented that FDA confirmed that BrainStorm’s Phase 3 clinical trial of NurOwn was “well-designed.” The court found several categories of statements to be nonactionable as opinions (e.g., defendants’ own interpretation of clinical trial results), forward-looking statements (e.g., statements about NurOwn’s prospects), and/or puffery (e.g., descriptions of discussions with FDA as “wonderful”). Additionally, the court found that statements about a biomarker that BrainStorm highlighted were true and dismissed with prejudice all claims that BrainStorm and BrainStorm’s CEO engaged in improper insider trading. However, the court found that the plaintiffs adequately alleged four categories of statements to be false or misleading. First, the court found that some of the defendants’ comments about FDA’s views on the design of BrainStorm’s Phase 3 clinical trial of NurOwn “plausibly contradict[ed] the FDA’s immediately preceding feedback.” Second, the defendants’ statements about “prespecified subgroup results” in the Phase 3 clinical trial of NurOwn were adequately alleged to be false and misleading. Third, defendants’ statements about FDA’s views on the existence of a “floor effect” in the Phase 3 clinical trial of NurOwn were plausibly alleged to be inaccurate. Fourth, defendants’ statements about NurOwn’s safety were plausibly misleading based on allegations that there were more deaths in the treatment arm of the Phase 3 clinical trial of NurOwn than in the placebo arm. For each category of misstatement that the court found to be actionable, the court also found scienter plausibly alleged because plaintiffs adequately alleged that the defendants knew information that contradicted their statements at the time the statements were made and, accordingly, defendants were plausibly reckless in making them. Last, the court found that plaintiffs “met their relatively low burden of adequately alleging loss causation” with respect to the surviving statements.

Docdeer Foundation v. BioNTech SE, 2025 WL 2781381 (S.D.N.Y. Sep. 30, 2025)

The plaintiffs alleged that BioNTech SE and two of its executives violated sections 10(b) and 20(a) of the 1934 Act by making misstatements about demand and inventory risks related to Comirnaty, BioNTech and Pfizer’s COVID-19 vaccine. The plaintiffs alleged that a number of statements BioNTech and its executives made about orders and contracts for distribution of Comirnaty in Europe omitted information about declining demand for the vaccine starting in mid-2022 and that BioNTech did not sufficiently disclose information about inventory write-offs. The defendants moved to dismiss the claims, and the court granted the motion to dismiss. The court found that the defendants’ statements about BioNTech’s contracts to sell Comirnaty to European countries were not false or misleading because the defendants provided accurate information about the contracts themselves, including the number of doses ordered. The fact that demand was declining did not change the factually accurate reports on the contracts or on negotiations. Furthermore, several statements were protected forward-looking statements (e.g., statements about “potential doses”) and/or inactionable puffery (e.g., “broad pipeline”). As to scienter, the court found that none of the plaintiff’s five pieces of circumstantial evidence — alleged knowledge of lower demand, appearance of authority, the fact that Comirnaty was a core operation for BioNTech, temporal proximity between the alleged misstatement and corrective disclosure, and awareness of risk of write-offs — gave rise to a strong inference of conscious misbehavior or recklessness. The court thus granted the motion to dismiss the Section 10(b) claim and found that accordingly, the Section 20(a) claim failed as a matter of law.

In re Viatris Inc. Secs. Litig., 2025 WL 3224941 (3d Cir. Nov. 6, 2025)

The plaintiffs brought a putative securities fraud class action against Viatris Inc. and two of its executives for alleged violations of sections 10(b) and 20(a) of the 1934 Act. The plaintiffs alleged that the defendants made false or misleading statements by representing that the company’s biosimilars business was “core” before ultimately selling the biosimilars business. During this same period, the defendants regularly told investors that Viatris was engaged in extensive strategic review of “all parts of its business” that could involve a restructuring or reconsideration of which parts of the business were “core.” The district court dismissed all claims against the defendants because the challenged statements were not adequately alleged to be false or misleading, and the Third Circuit affirmed. In affirming, the Third Circuit observed that the plaintiffs failed to allege that any of the statements made by the defendants were not literally true when made, and the company’s later action in selling the biosimilars business did not make its earlier statements about the biosimilar business false when they were made. Moreover, the court affirmed that the challenged statements were not actionable, because Viatris thoroughly disclosed the possibility that it might later decide that any part of its business might later be deemed non-core and thus be subject to divestment.

Levon v. CorMedix Inc., 797 F. Supp. 3d 381 (D.N.J. 2025)

The plaintiff brought claims against biopharmaceutical company CorMedix Inc. and certain of its officers under sections 10(b) and 20(a) of the 1934 Act concerning CorMedix’s efforts to obtain FDA approval of its NDA for DefenCath, an antimicrobial catheter device. In 2017, CorMedix selected ROVI, a third-party, off-site manufacturer located in Spain, to assist with manufacturing. CorMedix thereafter conducted a weeks-long audit of the off-site manufacturer, which included a site visit and inspection of the manufacturer’s facilities. The auditor submitted a report noting deficiencies to at least one defendant. According to a former employee, CorMedix nevertheless moved ahead with using ROVI because of one executive’s “close personal friendship” with ROVI’s executive team. The plaintiff alleged that CorMedix made numerous statements that misrepresented ROVI’s capabilities, deficiencies, and compliance with guidance and standards, particularly with regard to the DefenCath NDA. Initially, the defendants disclosed that FDA was supportive of the DefenCath manufacturing process, leading to FDA’s conditional approval of the device in February 2020. In 2021, however, FDA issued its first complete response letter (CRL), finding ROVI inadequate. CorMedix stock price dropped 54.4%. Notwithstanding the CRL, defendants continued to assure investors that they could resolve the deficiencies. In 2022, FDA issued a second CRL that cited unresolved deficiencies at ROVI. CorMedix’s stock price dropped again, this time by 57%.

The court found that the plaintiff adequately alleged material misrepresentations. First, the court found that statements about ROVI’s capabilities were actionable because the defendants disclosed only positive information about ROVI. By disclosing this positive information, the court found, the defendants triggered a duty to disclose negative information as well. Second, the court found that statements that the DefenCath NDA was on track were plausibly alleged to be false or misleading because defendants were allegedly aware that the NDA was not sufficient due to ROVI’s manufacturing deficiencies. Third, the court found that the defendants plausibly misstated FDA’s support for DefenCath because defendants were alleged to be aware of unfavorable information from FDA. Further, each category of alleged misstatements was adequately alleged to be material because the company’s stock dropped significantly following the news of each CRL. The court also found that these statements were statements of current fact and known events and risks, and thus not protected by the safe harbor for forward-looking statements and were not nonactionable opinions or immaterial puffery. Even statements about having the “right team” were actionable because they were alleged to be verifiably inaccurate. The court also found that the plaintiff pled scienter. Confidential witness statements provided adequate detail about the audit of ROVI and the defendants’ knowledge of the audit results and other deficiencies with ROVI. Furthermore, the defendants themselves specifically touted their own knowledge and experience, and DefenCath was alleged by plaintiff to be “core” to CorMedix’s business. Although the lack of stock sales by the defendants weighed against scienter and executive resignations alleged by plaintiff did not influence the analysis, the court found that, on balance, the plaintiff adequately alleged scienter. Finally, the court found that loss causation was adequately pled with respect to the actionable statements and thus denied the defendants’ motion to dismiss.

Kelk v. Bausch Health Cos., 2025 WL 470422 (D.N.J. Feb. 12, 2025)

The plaintiffs brought a class action against Bausch Health Companies and certain of its current and former executives based on alleged violations of sections 10(b) and 20(a) of the 1934 Act. Bausch manufactures pharmaceuticals and medical devices in the areas of eye health, gastroenterology, and dermatology. The plaintiffs alleged that the defendants misled investors by downplaying the company’s financial struggles, particularly those concerning a spinoff to reduce debt, and failing to disclose that Bausch’s intellectual property for its most valuable drug, Xifaxan, was “seriously threatened.” With regard to the spinoff to reduce company debt, Bausch announced in 2020 that it planned to separate its eye health and pharmaceutical businesses, stating that the purposes of the spinoff were to ensure the surviving companies had appropriate capital structures and would create the most value for shareholders. The court found that statements about the spinoff’s goals and plans were inactionable as forward-looking and/or opinion statements. Although the court did find that a few statements about the spinoff were adequately alleged to be false or misleading, specifically those about the company’s financial struggles, those statements were not actionable, because the plaintiffs failed to adequately plead scienter. The court wrote the complaint included no “memoranda, internal reports, or communications suggesting that defendants were aware that their statements were false,” and the defendants’ mere desire to raise capital was insufficient to support an inference of scienter. Concerning the intellectual property for Xifaxan, the plaintiffs alleged that the defendants made statements about the importance of these patents without disclosing known challenges. But the court found that many of the defendants’ statements about the patents were inactionable forward-looking and/or statements of opinion that expressed optimism about the future of the intellectual property. And the sole remaining challenged statement about the Xifaxan patent — that it remained intact — was literally true and thus could not be false or misleading. Accordingly, the court granted the defendants’ motion to dismiss.

In re Integra Lifesciences Holdings Corp. Secs. Litig., 2025 WL 1798386 (D.N.J. June 30, 2025)

The plaintiff alleged that Integra LifeSciences Holdings Corporation and several of its current and former executive officers violated sections 10(b) and 20(a) of the 1934 Act, as well as Rule 10b-5 thereunder, in connection with statements regarding the manufacturing of the SurgiMend and PriMatrix extracellular bovine matrix (EBM) devices at the company’s facility in Boston. The plaintiff specifically alleged that despite multiple warnings from FDA of “deficient manufacturing conditions,” the defendants failed to take the necessary actions to remedy the deficiencies and “nonetheless touted their remediation efforts” through false and misleading statements to investors. The defendants moved to dismiss the claims against them, and the court granted the motion to dismiss based on the plaintiff’s failure to adequately plead scienter.

The court addressed six categories of allegations that, the plaintiff claimed, supported an inference of scienter: (1) FDA’s inspections and issuance of warning letters; (2) a 2022 whistleblower complaint; (3) confidential statements from former employees; (4) the ultimate relocation of the Boston facility; (5) defendants’ generic statements concerning the importance of regulatory compliance to Integra’s business; and (6) defendants’ assurances that the Boston facility was focused on remediation. With regard to FDA inspections and warning letters, the court found that the defendants’ knowledge of the existence of these inspections did not give rise to scienter since Integra disclosed all of the relevant correspondence to investors. The court likewise found that the 2022 whistleblower complaint was insufficient because Integra launched an internal investigation of the allegations in the complaint, which “tends to undermine any inference of scienter.” The court also found that the allegations by former employees did not meet the pleading requirements of scienter under the PSLRA because their “statements do not plead with adequate detail facts that allow the Court to infer intent.” As for the allegations concerning the company’s plans to relocate the Boston facility, the court held that since the plans were announced publicly soon after board approval, the relocation did not support an inference of scienter either. Finally, for the last two categories of allegations, the court found that such statements standing alone did not support an inference of scienter, particularly where the plaintiff failed to allege any plausible motive for defendants to have misled investors.

Feldman v. Scynexis, 2025 WL 2158517 (D.N.J. July 30, 2025)

The plaintiff brought suit against Scynexis Inc. and certain of its officers, alleging violations of sections 10(b) and 20(a) of the 1934 Act, as well as Rule 10b-5 thereunder. Specifically, the plaintiff alleged that certain statements made by the defendants regarding their compliance with FDA manufacturing regulations were false or misleading. Defendants moved to dismiss. Scynexis’s only product is an antifungal treatment for vaginal yeast infections. After receiving FDA approval for the product, defendants made confident statements about the manufacturing process — e.g., they “believe[d they had] a team that is capable of managing” manufacturing. Ultimately, when the product proved unprofitable, Scynexis entered into a license agreement with a vendor that would take over development, manufacturing, and commercialization of the product in exchange for royalties. Later that year, the vendor discovered a potential cross contamination of the antifungal drug and announced that it would conduct a recall and pause clinical studies until a solution was found. Scynexis then announced a recall of two batches of the drug and a pause on manufacturing the drug. Scynexis later disclosed that FDA concurred with the plan. The plaintiff alleged that certain statements made by the defendants were false or misleading because they did not disclose that Scynexis (1) did not sufficiently separate pieces of manufacturing equipment to prevent cross contamination, (2) did not ensure compliance with good manufacturing practices as required by FDA regulations, and (3) failed to disclose material risks to Scynexis’s business. The court rejected all three theories, finding that the plaintiff had failed to plausibly allege a material misstatement or omission because the plaintiff did not allege that defendants’ statements about their beliefs that they were in compliance with all applicable FDA regulations were false when they were made. The plaintiff’s sole allegation that Scynexis knew or should have known that its statements were misleading was a statement by an analyst that Scynexis would be expected to inspect the manufacturing facilities before contracting with the vendor. The court found that this statement was not sufficient to support the conclusion that the defendants were aware of manufacturing problems such that their statements were false or misleading. Accordingly, the court granted the defendants’ motion to dismiss.

Sneed v. Talphera, Inc., et al., 147 F.4th 1123 (9th Cir. 2025)

The plaintiffs alleged that Talphera Inc. and two of its officers violated sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 thereunder by allegedly making false and misleading statements related to “Tongue and Done,” a marketing slogan used to promote DSUVIA, an under-the-tongue opioid painkiller. Specifically, the plaintiffs claimed that several statements made in the marketing of DSUVIA, as well as the CEO’s statement at an investor conference that administering the drug involved simply lifting the patient’s tongue, injecting the drug under it, and being “done,” were misleading because these statements omitted material information about how DSUVIA was actually administered, including that it was subject to a Risk Evaluation and Mitigation Strategy (REMS) plan in which it could not be used at home by patients and required administration by healthcare professionals in supervised settings, significantly limiting its market potential. The plaintiffs relied heavily on an FDA warning letter alleging that Talphera had “misbranded” DSUVIA by making “false or misleading claims” under the Food, Drug, and Cosmetics Act (FDCA). The district court dismissed the complaint, and the plaintiffs appealed.

The Ninth Circuit affirmed dismissal, finding that a reasonable investor would not blindly accept a marketing slogan by itself when other contextual information was available, and would understand that slogans are catchy phrases designed to highlight desirable product features, not statements of fact that are actionable under the securities laws. The Ninth Circuit also noted that Talphera provided “copious clarifying information” alongside the slogan, including disclosures about the REMS plan and warnings that the drug was “administered sublingually by a healthcare professional” — which the CEO also cautioned multiple times during an investor conference. Regarding the FDA's warning letter, the court held that it was “not dispositive or even necessarily probative” of falsity claims under the 1934 Act because the FDCA targets a different audience (i.e., patients and medical professionals) than the securities laws (i.e., investors). Additionally, the Ninth Circuit held that the plaintiffs failed to plead facts giving rise to a strong inference that defendants acted with scienter, rejecting the plaintiffs’ core operations argument and citing the fact that few of the plaintiffs’ confidential witnesses had interacted with any of the defendant executives. The court found it more probable that the individual defendants wanted to use the slogan to market DSUVIA’s biggest selling point than that they intended to defraud investors.

Aramic LLC v. Revance Therapeutics, Inc., 2025 WL 240796 (N.D. Cal. Jan. 17, 2025)

The plaintiffs brought a class action complaint against Revance Therapeutics Inc. and its CEO, CFO, and COO, alleging that they made false or misleading statements in violation of the 1934 Act regarding the timing and likelihood of FDA approval of the drug product DAXI. Revance’s BLA for DAXI was initially denied by FDA, but the drug was ultimately approved in July 2022.

The court previously dismissed the plaintiffs’ claims on the grounds that they failed to adequately plead scienter, but granted them leave to amend. In their amended complaint, the plaintiffs added allegations from a former Revance employee who served as deputy chief of staff to shore up their scienter allegations. The former employee alleged that an “unexpected crisis” unfolded at the company on October 12, 2021, with the public release of an FDA Form 483 noting observations of Revance’s potential noncompliance with current good manufacturing practice (cGMP) regulations. The former employee alleged that afterwards, the defendants spent increasing amounts of time talking to analysts and shareholders about a potential delay in FDA approval. The court rejected these allegations as insufficient to establish a strong inference of scienter, finding that allegations of executive participation in meetings and an internal “crisis” following the public disclosure of the Form 483 did not naturally lead to the conclusion that the defendants had intentionally concealed information from the public. The plaintiffs also renewed their core operations doctrine argument, adding allegations that the CEO had described BLA approval as “priority number one” and that the CFO had described DAXI as Revance’s “core asset.” The court found that these allegations still did not constitute the type of specific information conveyed to management related to the fraud required to establish scienter under the core operations doctrine. Considering the plaintiffs’ allegations holistically, the court found it was at least as plausible that the defendants, despite the Form 483, believed that any issues would be remedied and that DAXI would ultimately be approved — an inference made more compelling by the fact that DAXI was in fact approved the following year. The court granted the defendants’ motion to dismiss, this time without leave to amend.

Cesario v. Biocept, Inc., 2025 WL 525120 (S.D. Cal. Feb. 18, 2025)

The plaintiff alleged that Biocept Inc., a molecular oncology diagnostics company, and numerous associated parties — including two board members along with the company’s CEO, CFO, auditor, outside counsel, investor relations firm, investment banker, and biotechnology development partner — violated section 10(b) of the 1934 Act and Rule 10b-5 thereunder. The plaintiff also made other claims, including for fraud, aiding and abetting, and violations of the California Corporations Code. Specifically, the plaintiff alleged that Biocept concealed a June 3, 2020, co-development agreement with Aegea Biotechnologies to develop a COVID-19 test in order to prevent its stock from curing a NASDAQ minimum bid price deficiency, and that it then timed the eventual August 6, 2020, press release announcing the agreement to orchestrate a pump-and-dump scheme in which Maxim Group, Biocept’s investment banker, issued buy recommendations and controlled broker non-votes to secure shareholder approval of a reverse stock split. All defendants moved to dismiss.

As to the defendants who were not members of Biocept’s board — including the auditor, outside counsel, and investor relations firm — the court found that the complaint failed to allege that any of them was a “maker” of any alleged misstatement under Janus Capital Group, Inc. v. First Derivative Traders. The court also found that no private right of action existed for the plaintiff’s claim for aiding and abetting a section 10(b) violation.

As to the Biocept board members and officers, the court found that the complaint’s falsity allegations were deficient on multiple independent grounds. The plaintiff’s core theory — that Biocept’s deliberate concealment of the Aegea agreement constituted an actionable omission — failed because pure omissions are not actionable absent a duty to disclose, and the complaint did not identify any Biocept statement rendered misleading by the omission. Biocept’s failure to file a Form 8-K disclosing the agreement likewise could not support a section 10(b) claim, as SEC regulations expressly provide that a failure to file a Form 8-K disclosing entry into a material agreement is not a violation of section 10(b). Certain challenges to statements about the anticipated development and commercialization of the COVID-19 test were dismissed as protected forward-looking statements under the PSLRA safe harbor, as the complaint’s conclusory allegation that Biocept “never intended” to commercialize the test was not supported by any particularized facts. The court also found that the plaintiff failed to adequately plead scienter as to all defendants because the complaint’s group scienter allegations that “[a]ll defendants knew, or should have known, about the violations” fell far short of the PSLRA’s strong inference standard, and none of the Biocept officers were alleged to have sold stock during the class period. The court found that this weighed against a scienter inference. Finally, the complaint failed to plead loss causation because it did not identify any corrective disclosures or allege particularized facts connecting any decline in Biocept’s stock price to a revelation of the alleged fraud, as opposed to the market’s reaction to the reverse split itself or Biocept’s deteriorating financial condition.

Plumbers and Pipefitters Local Union #295 Pension Fund v. CareDx Inc., 2025 WL 556283 (N.D. Cal. Feb. 18, 2025)

The plaintiffs asserted that CareDx Inc. and its current and former CEOs violated sections 10(b) and 20(a) of the 1934 Act and SEC Rule 10b-5 thereunder. CareDx is a healthcare company whose primary business is providing transplant recipients with AlloSure, a blood-based, donor-derived, and cell-free DNA test used to detect organ rejection. The plaintiffs alleged that the defendants operated two schemes to fraudulently inflate CareDx’s testing services revenue: first, a kickback scheme in which CareDx provided physicians with luxury dinners and travel events, $500-per-hour fees to attend sham “advisory boards,” and payments of up to eight times the normal fee to enroll patients in studies in order to induce physicians to prescribe AlloSure; and second, a practice of automatically bundling AlloSure into its RemoTraC routine-care program without a physician determination of medical necessity, thereby generating revenue from tests billed to Medicare that lacked medical justification. The plaintiffs further alleged that, in the midst of this conduct, the defendants certified in annual 10-K filings that CareDx had structured its physician compensation arrangements with terms intended to comply with the Stark Law — a federal prohibition on physician self-referrals.

The court found that the plaintiffs plausibly alleged falsity as to the Stark Law compliance statement, particularly because of the plaintiffs’ allegations that CareDx paid physicians to enroll patients in an AlloSure study for eight times the normal fee and paid phony grants to centers prescribing AlloSure. In a prior opinion, the court had found the other falsity allegations sufficient.

On scienter, the court found the plaintiffs’ allegations sufficient as to both individual defendants. The plaintiff pointed to allegations that the former head of CareDx’s Community Nephrology group stated that he had personally raised concerns to the company’s current CEO that CareDx’s practice of billing Medicare for medically unnecessary AlloSure tests constituted fraud, and that CareDx’s director of reimbursement agreed those tests were not medically necessary. The former employee also alleged that the company’s former CEO called him to warn him not to put certain billing practices in writing because “there were things he couldn’t be associated with as the CEO.” The plaintiff further alleged, through the statements of a former transplant account manager, that the current CEO personally attended and approved lavish physician events, and that the former CEO had personally signed off on all marketing expenses. Considering these allegations together with allegations of suspicious resignations by the company’s CFO and chief marketing officer, alleged retaliation against employees who reported improper practices, and allegations that testing services revenue subject to the alleged schemes represented as much as 85% of the company’s total revenues, the court found the inference of scienter compelling, notwithstanding the absence of unusual stock sales by either individual defendant.

Thant v. Rain Oncology, Inc., 2025 WL 588994 (N.D. Cal. Feb. 24, 2025)

The plaintiffs alleged that Rain Oncology Inc. and several of its officers and directors violated sections 11 and 15 of the 1933 Act and sections 10(b) and 20(a) of the 1934 Act.

The plaintiffs’ claims rested on the theory that the company increased the risk of failure for its Phase 3 trial for drug candidate milademetan by bypassing a Phase 2 trial. According to the plaintiffs, the normal practice is to conduct a Phase 2 trial if the drug candidate meets certain criteria, which milademetan failed to meet. The plaintiffs alleged that failing to disclose this heightened risk and moving directly to a Phase 3 trial “implied to Rain’s investors that only the ordinary risks inherent in any Phase 3 trial were present.” Plaintiffs alleged that this rendered six categories of challenged statements false and misleading: (1) statements that a prior Phase 1 trial “validated” a rationally designed dosing schedule (the validation statements); (2) statements that Rain “anticipates commencing” or “commenced a pivotal Phase 3 trial” of milademetan “based on” the Phase 1 data (the commencement statements); (3) statements that Rain was “proud to have been able to dose the first patient in a pivotal Phase 3 trial” and “achieved a number of important clinical milestones for milademetan” (the optimistic statements); (4) statements that Rain was a “late-stage” oncology company (the late-stage statements); (5) statements that milademetan had the “potential” to become a “best-in-class” drug (the best-in-class statements); and (6) diagrams that allegedly implied that Rain had conducted both Phase 1 and Phase 2 trials for milademetan (the development pipeline statements). The defendants moved to dismiss.

With respect to the 1933 Act claims, the court held that the claims based on the commencement statements were plausibly alleged to be false, but all other claims should be dismissed. Specifically, the court allowed the claims about the commencement statements to proceed because they “omitted certain risks about the decision to bypass Phase 2 trials” and, therefore, could be found to be misleading. But the court found that the plaintiffs failed to plead falsity for the validation statements because “the validation statements did not purport to identify a dose for Phase 3 testing,” nor did the statements create “a misleading impression of the basis for Rain’s opinions.” The court also found the optimistic statements to amount to nothing more than inactionable puffery because they made “no claims about the basis for proceeding directly to Phase 3 trials.” Similarly, because the company clearly disclosed its lack of experience with clinical trials, and there were no statements that the drug was already established as best-in-class, the late-stage and best-in-class statements were also inactionable. Finally, the court found the development diagram statements to be inactionable because the company clearly disclosed in its SEC filings that it had not conducted any Phase 2 trials for milademetan.

As for the 1934 Act claims, the validation statements, optimistic statements, late-stage statements, best-in-class statements, and development statements also failed to give rise to a viable claim due to the plaintiffs’ failure to plead falsity. The court also found that the plaintiffs failed to adequately allege a strong inference of scienter with respect to the commencement statements. The court found that the plaintiffs failed to make any specific allegations concerning the defendants’ state of mind, and it rejected the plaintiffs’ arguments based on the core operations doctrine, the allegations of a former employee that were not connected in any way to the commencement statements, and vague, generalized allegations of motive. The court allowed the plaintiffs to amend their complaint following the decision.

In re Gritstone Bio, Inc., 2025 WL 2084918 (N.D. Cal. July 24, 2025)

The plaintiffs brought claims under the 1934 Act alleging that Gritstone Bio Inc.’s CEO and CFO made false and misleading statements regarding the company’s development of CORAL, a COVID-19 vaccine candidate. Gritstone initiated development of CORAL in 2021. In September 2023, following promising Phase 1 trial results, the company received a $433 million contract from the Biomedical Advanced Research and Development Authority (BARDA) to evaluate CORAL in a Phase 2b trial. The BARDA contract was conditioned on Gritstone obtaining FDA authorization to proceed as an investigational new drug study by March 31, 2024. Throughout this period, Gritstone and its executives represented to investors that Gritstone’s third-party contract manufacturing was performed under cGMP standards. In November 2023, Gritstone submitted its proposal to FDA, which placed the proposal on clinical hold and informed Gritstone that it was required to use cGMP-grade materials to proceed. The defendants moved to dismiss the plaintiffs’ claims.

With respect to falsity, the court found that nearly all of the challenged statements were not actionable. Specifically, statements about the value of the BARDA contract and the anticipated timeline of the Phase 2b study were dismissed as fraud by hindsight. The court found only one statement potentially actionable: an affirmative representation in Gritstone’s March 2023 Form 10-K that “all . . . third-party contract manufacturing is performed under cGMP or similar guidelines.” The court found this statement was plausibly alleged to be misleading because the plaintiffs claimed that at the time the statement was made, the defendants readily knew that its contractors were not in fact complying with cGMP standards.

With respect to scienter, the court analyzed each defendant separately. As to the CEO, the court found that while the plaintiffs’ confidential witness account was sufficiently detailed regarding the witness’s own knowledge of the cGMP failings, it lacked the details necessary to establish that the CEO personally knew of those failings at the time the misleading statement was made in the 10-K. As to the CFO, the court found that no specific facts were alleged regarding her personal knowledge of the cGMP issues. The court granted the motion to dismiss as to the CEO without prejudice, allowing the plaintiffs to file an amended complaint. The court granted the motion to dismiss as to the CFO with prejudice.

Peters v. Twist Bioscience Corp., 2025 WL 2532671 (N.D. Cal. Sept. 3, 2025)

The plaintiff brought a putative securities class action against Twist Bioscience Corp. and its CEO and CFO based on alleged violations of sections 11 and 15 of the 1933 Act in connection with two secondary offerings and sections 10(b) and 20(a) of the 1934 Act, as well as Rule 10b-5 thereunder. Plaintiff challenged two sets of statements as allegedly false and misleading: (1) statements regarding Twist’s production, manufacturing, and product capabilities; and (2) statements regarding the company’s financials. As to the product statements, the plaintiff alleged that defendants misrepresented that the company had “automated” and “scalable” production processes, the “lowest industry error rates,” high customer satisfaction, and fast turnaround times, when instead, according to the complaint, Twist relied heavily on technical staff to continually intervene manually in the manufacturing process, allegedly generating “inconsistent, error-prone products with slow delivery times and rampant customer complaints.” For the 1933 Act claims, the plaintiff also challenged certain statements from the company’s offering documents concerning its practice of offering customers retrospective discounts and the expected return rates for the company’s products. As to the financial statements, the plaintiff alleged that the defendants made false and misleading statements regarding Twist’s R&D expenses, cost of revenue, and gross margins by improperly allocating certain expenses to R&D, which allegedly inflated Twist’s gross margins.

The court found that the plaintiff plausibly alleged falsity regarding lack of automation, because four former company employees stated that Twist’s production process was not fully automated and that it would take “one to two years” before the company was willing to “invest in the software development needed for automated production.” The court also found that the plaintiff plausibly alleged falsity regarding product quality and customer dissatisfaction statements, because three former employees detailed customer complaints regarding quality, including containers without product, wrong DNA sequences, and cross contamination, which directly contradicted assertions of shipping “perfect DNA” and the customer experience being “excellent.” However, the court found that the plaintiff did not plausibly allege that statements regarding error rates, turnaround times, and certain customer satisfaction were false, because the allegations were not specific enough to directly contradict the statements made. The court also found that the company’s statement that it offered retrospective discounts to customers was plausibly actionable under the 1933 Act because the former employees’ allegations directly contradicted the statement. Regarding the financial statements, the court rejected the defendants’ argument that the statements were nonactionable forward-looking opinions, because the statements involved reporting of R&D expenses that existed at the time, not projections of future R&D expenses.

For the 1934 Act claims, the court also found that the plaintiff plausibly alleged scienter based on allegations by former employees alleging the CEO had hundreds of conversations regarding product failures and quality control errors. However, the court found that the plaintiff had not adequately alleged scienter as to the CFO, because the complaint did not address the CFO’s state of mind with sufficient detail. As to the financial statements, the court found the plaintiff had not alleged scienter as to any of the defendants because mere access to the production data without any allegations of the individual defendants’ roles in preparing the company’s accounting statements did not give rise to a strong inference of scienter.

Last, the court dismissed plaintiff’s 1933 Act claims to the extent they were based on one of the at-issue secondary offerings because the plaintiff did not plausibly allege that it acquired shares during the offering, or shares traceable to the offering.

In re Dexcom, Inc. Class Action Securities Litigation, 2025 WL 1399196 (S.D. Cal. May 14, 2025), 2025 WL 2606620 (S.D. Cal. Sept. 9, 2025)

The plaintiff brought a putative securities class action against Dexcom Inc. and certain of its officers, alleging violations of sections 10(b) and 20(a) of the 1934 Act. Dexcom is a medical device company that designs, develops, and sells continuous glucose monitoring (CGM) devices, which utilize sensors inserted just below a user’s skin to provide regular glucose readings and assist individuals with diabetes in managing their blood glucose levels. In April 2023, CMS expanded Medicare coverage for CGMs to type 2 basal patients, and Dexcom began promoting this expansion as a significant opportunity to capture greater market share, emphasizing to investors its expanded sales force and strong relationships with durable medical equipment (DME) suppliers. According to the plaintiff, unbeknownst to investors, Dexcom faced three alleged obstacles negatively affecting its ability to capture that market share: Its sales force lacked established relationships with primary care physicians, the primary prescribers of CGMs for type 2 basal patients; Dexcom had not developed a rebate program comparable to that of its chief competitor, Abbott Laboratories; and Dexcom’s transition to pharmacies as its primary fulfillment channel, rather than DMEs, further hampered its ability to compete. Despite consistently losing ground to Abbott, Dexcom continued to present a positive picture of its performance in the type 2 basal market throughout 2023 and into 2024; raised the midpoint of its revenue guidance in April 2024; and on June 5, 2024, stated that it was happy with its full-year revenue guidance. On July 25, 2024, however, Dexcom reduced its full-year revenue guidance by $300 million, conceded that it was “not doing wonderful in the basal space,” and acknowledged that its sales force expansion had been a reactive measure to stem market share losses.

The plaintiff alleged that the defendants made 14 false and misleading statements between April 27, 2023, and June 5, 2024. The court dismissed the plaintiff’s initial complaint on the threshold ground that it constituted an impermissible “puzzle pleading” — a pleading that requires defendants and the court to match up the statements forming the basis of the claims with the reasons why those statements are alleged to be misleading, in violation of Rule 8 and the PSLRA’s heightened pleading requirements.

In a subsequent amended complaint, the plaintiff challenged the same 14 statements. The court determined that all but two of the challenged statements were still nonactionable, finding defendants’ statements such as “we have very good relationships with our distributors” and that the company was “in a great position to compete” to be inactionable statements of opinion or puffery. Likewise, the court reasoned that the defendant’s statements were not made false and misleading by the fact that Abbott continued to dominate the basal market or by the fact that the challenged statements did not mention Abbott or Dexcom’s competitive position vis-à-vis its primary competitor. Nevertheless, the court determined that two of the challenged statements — which allegedly assured investors that certain prescription data demonstrated that the company was taking market share when in fact the company’s basal market share remained unchanged — were adequately alleged to be false and misleading. The court also found scienter for those two surviving statements because the statements specifically referenced Dexcom’s ability to access the prescription data and defendants’ reliance on the data. The court, therefore, concluded it was reasonable to infer that the defendants knew or should have known that the challenged statements were false or misleading as to the state of Dexcom’s market share when made.

Cement Masons and Plasterers Local No. 502 Pension Fund v. InMode LTD, 2025 WL 2658224 (C.D. Cal. Sept. 12, 2025)

The plaintiffs alleged that InMode Ltd., a global provider of aesthetic medical devices and technologies, and certain of its officers violated section 10(b) of the 1934 Act and SEC Rule 10b-5. Plaintiffs alleged that InMode’s executives repeatedly told investors that the company’s competitive edge stemmed at least partly from its ability to sell its devices at full prices. The plaintiffs alleged, however, that in reality, InMode discounted almost every product it sold. The plaintiffs also alleged that the defendants marketed several of InMode’s key devices for medical uses beyond those approved by FDA, while telling investors that InMode had obtained 510(k) clearance for the current treatments for which it offered its products. The plaintiffs also alleged that InMode made misleading statements about the safety and efficacy of its products. The defendants’ supposed fraud was then revealed by three Capitol Forum investigative articles: (i) a February 17, 2023, article reporting that InMode offered to replace defective products on the condition that customers sign confidentiality agreements with non-disparagement clauses; (ii) a March 10, 2023, article reporting that InMode had failed to submit mandatory reports to FDA regarding injuries and malfunctions from its devices; and (iii) an October 12, 2023, article reporting that InMode had routinely and significantly discounted the prices of its devices. The defendants moved to dismiss these claims. The court denied the defendants’ motion to dismiss in part with respect to the statements concerning InMode’s pricing and discounting practices but granted the motion in part as to the other categories of statements.

With respect to the pricing statements, the court found that the plaintiffs adequately pleaded scienter because the senior executives who made the statements allegedly accessed Salesforce data showing the discounts, one executive had personally encouraged a sales representative to discount products, and senior leadership participated in negotiating discounts with doctors. With respect to FDA clearance statements, the court found that the plaintiffs adequately pleaded falsity and scienter but dismissed the claims for failure to plead loss causation. The court found that the two alleged corrective disclosures — the February and March 2023 Capitol Forum articles — did not constitute corrective disclosures of FDA clearance misstatements, because the articles did not allege that the reported injuries stemmed from off-label uses of the devices. And with respect to the safety and efficacy statements, the court found that plaintiffs properly pleaded some of the statements as material misrepresentations, particularly statements about product uses that were not approved by FDA. As with FDA clearance statements, however, these statements were dismissed for failure to plead loss causation, as the Capitol Forum articles did not allege that the reported injuries arose from the specific off-label uses at issue.

Patel v. Edwards Lifesciences Corp., 2025 WL 2724388 (C.D. Cal. Sept. 19, 2025)

The plaintiff brought claims under sections 10(b) and 20(a) of the 1934 Act against Edwards Lifesciences Corporation and certain of its executive officers for statements made regarding the sales growth of the company’s Transcatheter Aortic Valve Replacement (TAVR) products line. The plaintiff also brought an insider trading claim under Section 20A of the 1934 Act against the company’s CEO. Prior to the class period, at an investor conference in December 2023, Edwards projected 8% to 10% net TAVR sales growth for 2024 and listed improving healthcare system capacity as a tailwind. The defendants repeated that projection throughout the class period, with the CEO stating he was “confident” in the 8% to 10% guidance, dismissing concerns about slow Q1 growth, and denying that Edwards had experienced meaningful hospital capacity constraints for TAVR. The plaintiff alleged that five former Edwards employees reported that the company knew, before and during the class period, that TAVR growth had already slowed and that hospital capacity constraints continued to negatively affect sales — including that a former employee reported having raised the issue with the CEO as early as 2023. On July 24, 2024, Edwards announced lower than expected growth and decreased its 2024 revenue guidance. The following day, the company’s stock price dropped 31%. This suit followed, and the defendants moved to dismiss.

The court dismissed statements made prior to the class period as inactionable. The court found the remaining challenged statements to be forward-looking but declined to extend safe harbor protection, concluding that the defendants’ accompanying cautionary language spoke of capacity and competitive risks as mere possibilities without alerting investors that those risks may already have materialized. The court further found that the forward-looking statements were actionable because the complaint adequately pleaded actual knowledge of falsity as to the CEO, based on allegations by former employees that he had access to real-time dashboards projecting TAVR procedure volumes 18 to 24 months out and had been specifically informed of declining TAVR rates prior to the class period. For similar reasons, the court found that the plaintiff plausibly pleaded that the CEO made the surviving statements with scienter. However, the court found the CEO’s May 2024 stock sale — which was double his prior year’s sale but only approximately 12% of his total holdings and consistent with his established practice — did not support an inference of scienter. As to the other executive defendants, the complaint referred only generally to “executives” without alleging facts from which their individual knowledge could be inferred, and the claims against them were dismissed. On the section 20A insider trading claim, the court found the CEO’s stock sales and plaintiff’s purchase to be sufficiently contemporaneous, but dismissed the claim because the plaintiff purchased shares at $87.47, which was below the $87.68 price at which the CEO had sold, making it impossible that the CEO traded with the plaintiff specifically at an unfair advantage.

Hadian v. Fate Therapeutics, Inc., 2025 WL 2696995 (S.D. Cal. Sept. 22, 2025)

The plaintiffs brought suit against Fate Therapeutics Inc. and certain officers, alleging violations of sections 10(b) and 20(a) of the 1934 Act for making alleged materially misleading omissions regarding the company’s collaboration agreement with Janssen Pharmaceuticals. In April 2020, Fate entered into a collaboration agreement with Janssen under which Fate was responsible for developing certain product candidates and securing IND approvals from FDA. The plaintiffs alleged that in the fourth quarter of 2021, Janssen discontinued preclinical development of FT562, one of the product candidates being developed under the collaboration. The plaintiffs alleged that despite this, defendants made a series of statements throughout 2022 touting the progress of the collaboration and the strength of Fate’s IND pipeline without disclosing termination of a product candidate under development. On January 3, 2023, Janssen terminated the collaboration agreement entirely, and after Fate announced the termination on January 5, 2023, its stock fell. The court had already dismissed the plaintiffs’ earlier complaint alleging the same theory for failure to plead loss causation.

The court found that all alleged misstatements made before 2022 were inactionable because defendants had adequately disclosed the collaboration’s risks at that time, but that four statements made after Janssen’s decision to terminate development of FT562 were plausibly alleged to be misleading because defendants failed to disclose that termination while continuing to represent that IND submissions were progressing seamlessly and that the collaboration was going very well. On scienter, the court found the plaintiffs’ allegations concerning the four surviving statements to be sufficient, concluding that the individual defendants plausibly knew of adverse facts concerning FT562’s development and plausibly may have been aware that failing to disclose those facts when touting IND submission progress would be misleading to investors, given the importance of the collaboration to Fate’s business.

The court dismissed the complaint in full, however, because the plaintiffs failed to adequately plead loss causation under any of the three loss-causation theories advanced. Under the corrective disclosure theory, the court found that the January 5, 2023, announcement of the termination of the collaboration did not reveal the alleged fraud, as it solely attributed Janssen’s termination to Fate’s rejection of revised commercial terms and contained no information regarding alleged platform difficulties or the discontinuation of FT562 in 2021. Under the proximate-cause theory, the court found that confidential witness statements about Janssen’s alleged increased diligence following FT562’s discontinuation were insufficient to connect FT562’s discontinuation in 2021 to Janssen’s eventual termination of the agreement in 2023. And the court declined to reach the materialization of the risk theory, finding that the plaintiffs had failed to establish that the facts they alleged to be misleading were plausibly a substantial cause of the plaintiffs’ loss.

In re Illumina, Inc. Sec. Litig., 2025 WL 2739655 (S.D. Cal. Sept. 26, 2025)

The plaintiffs alleged that Illumina Inc. and GRAIL, as well as certain of Illumina’s executive officers, violated sections 10(b) and 20(a) of the 1934 Act, as well as Rule 10b-5 thereunder, by making false and misleading statements regarding Illumina’s planned acquisition of GRAIL. On September 21, 2020, Illumina announced that it would reacquire GRAIL (a former Illumina subsidiary) for over $8 billion. Shortly thereafter, the U.S. Federal Trade Commission and the European Commission raised concerns that the acquisition would give Illumina a near-monopoly on the multi-cancer-early-detection technology market, and the deal became subject to a regulatory standstill pending regulatory approval. Despite this standstill, Illumina closed the deal on August 18, 2021, and Illumina’s stock price subsequently dropped. The plaintiffs alleged that Illumina and GRAIL made false and misleading statements to assure investors that acquiring GRAIL was a good investment, including statements about (1) GRAIL’s financial projections; (2) Illumina’s ability to accelerate FDA approval and commercialization of GRAIL’s lead product; and (3) the clinical evidence purportedly supporting GRAIL’s proven technology. The court dismissed all of the plaintiffs’ claims, finding that the plaintiffs did not adequately plead loss causation with respect to any of the challenge statements. The plaintiffs’ complaint identified nine supposed corrective disclosures, yet the court found that the plaintiffs failed to specify which misrepresentations the nine disclosures supposedly corrected, leaving it to defendants and the court to “guestimate the connections” and “speculate how the jigsaw puzzle connects.” The court granted the plaintiffs leave to amend the pleading.

In re BioAge Labs, Inc. Securities Litig., 2025 WL 3038991 (N.D. Cal. Oct. 30, 2025)

The plaintiff brought claims under sections 11 and 15 of the 1933 Act against BioAge Labs Inc. and certain of its corporate officers, alleging that BioAge misled investors by omitting from its IPO registration statement and prospectus certain information about the safety of its leading drug candidate and the risks to its ongoing Phase 2 clinical trial. The defendants moved to dismiss these claims. BioAge is a clinical-stage biopharmaceutical company focused on developing drug therapies to treat metabolic diseases associated with aging, including obesity and muscle atrophy. Its lead product candidate at the time of the IPO was a small-molecule drug called azelaprag, originally developed by Amgen as a treatment for heart failure. Roughly two months before its IPO, BioAge announced the start of the STRIDES Phase 2 clinical trial, which was designed to test azelaprag in obese individuals over 55 years old in combination with tirzepatide. BioAge raised $198 million in its IPO. Only about nine weeks after the IPO, however, BioAge announced that it was discontinuing the STRIDES trial after 11 participants dosed with azelaprag developed transaminitis, a condition characterized by elevated liver enzyme levels that can be indicative of liver injury.

The plaintiff alleged that BioAge’s offering documents were misleading because they failed to disclose that transaminitis presented a serious and inevitable risk to azelaprag’s development, given that the condition had already appeared in a prior Amgen Phase 1 trial of the drug and that the design of the STRIDES trial made its recurrence virtually certain. But the court identified two independent defects in the plaintiff’s theory. As a legal matter, the court found that section 11 does not require an issuer to disclose a risk simply because it is significant or inevitable — liability arises only where a specific statement in the offering documents was rendered misleading by the omission. Because the plaintiff did not allege that BioAge had disclosed the risk of transaminitis in a misleading way, but rather argued that the risk disclosures were inherently misleading absent any discussion of transaminitis at all, the court found its theory foreclosed by Ninth Circuit case law. The court also found that the plaintiff did not plausibly plead that transaminitis was inevitable. Of the 265 participants across eight Phase 1 trials, only a single participant manifested any increase in liver enzyme levels. As to the trial design, the court acknowledged that certain features of the STRIDES trial made transaminitis more likely to appear but found that the plaintiff did not plausibly demonstrate that its occurrence was inevitable. The court granted the motion to dismiss in full, but with leave to amend.

Glazing Emps & Glaziers Union Local #27 Pension & Ret. Fund v. iRhythm Techs., Inc., 2025 WL 1569421 (N.D. Cal. June 3, 2025), 2025 WL 2243640 (N.D. Cal. Aug 6, 2025), 2025 WL 3128193 (N.D. Cal. Nov. 7, 2025)

The plaintiff brought claims under the 1934 Act alleging that iRhythm Technologies Inc. and its CEO and other executive officers made false and misleading statements regarding Zio AT, a mobile cardiac telemetry (MCT) monitoring device marketed to “high-risk” patients requiring near-real-time arrhythmia notifications. The plaintiff alleged that Zio AT contained an undisclosed transmission limit after which the device stopped transmitting data during the wear period. FDA issued a Form 483 to iRhythm in August 2022 and a warning letter in May 2023, stating that the device was inappropriate for high-risk patients requiring near-real-time monitoring. Plaintiff alleged that iRhythm had been aware of these issues since at least 2019. The plaintiff further alleged that iRhythm’s certified cardiographic technicians (CCTs) were instructed to produce “clean” reports for physicians, sometimes by “artifacting” data, which resulted in the deletion of arrhythmia events that never appeared in the final report a physician received. Based on these allegations, the plaintiff challenged statements that (1) Zio AT was appropriate for use by high-risk patient populations; (2) Zio AT could report cardiac events in near real time; (3) Zio AT was “highly accurate” and “able to diagnose heart rate arrhythmias with the accuracy of a panelist of cardiologists”; and (4) Zio AT was a specific type of heart monitor for high-risk patients known as an “MCT.”

In a trio of decisions, the court granted in part and denied in part the defendants’ motion to dismiss the plaintiff’s claims, denied defendants’ motion to stay discovery, and denied defendants’ motion for judgment on the pleadings with respect to the surviving claims.

In ruling on the motion to dismiss, the court found the plaintiffs adequately pleaded that the challenged statements describing Zio AT as appropriate for “high-risk” patients and as providing “near real-time” notifications were false or misleading, given that the transmission limit meant the device was capable of providing no notifications at all for patients who exceeded it, and FDA had specifically found the device was inappropriate for that patient population. The court also found statements about the device’s accuracy were adequately pleaded to be misleading in light of approximately 4,014 FDA-documented complaints about CCTs’ misreading of arrhythmia data and confidential-witness testimony that company technicians were trained to alter reports. However, the court dismissed statements that Zio AT was an MCT device and provided monitoring “across the spectrum of care” as too vague to be actionable, finding that the plaintiffs had failed to allege a well-defined meaning for “MCT” that could be provably false. On scienter, the court sustained the surviving claims only as to the company and the CEO. The CEO had personally authored and signed iRhythm’s response to the 2022 FDA Form 483 and had continued thereafter to make public statements touting Zio AT’s near-real-time capabilities and suitability for high-risk patients. The court dismissed claims against the remaining individual defendants, finding that mere membership on the company’s Compliance Committee, without allegations of what specific information those defendants actually received, was insufficient to establish scienter, and that the core operations doctrine could not substitute for the required particularized factual allegations as to each individual defendant.

The defendants subsequently moved for judgment on the pleadings as to the surviving claims and moved to stay discovery under the PSLRA while their motion for judgment on the pleadings was pending. The court denied the motion to stay, reasoning that the PSLRA’s discovery stay only applied to motions to dismiss and not motions for judgment on the pleadings. In a subsequent decision, the court also denied the motion for judgment on the pleadings because the defendants’ motion only raised arguments that had been raised and decided in the court’s motion-to-dismiss decision, and the law-of-the-case doctrine barred defendants from relitigating those arguments through a motion for judgment on the pleadings.