b'Decisions Issued by the Second Circuit and New York District CourtsAbramson v. NewLink Genetics Corporation,milestones, with data analyzed after 222 events, 333 Case No. 19-642-cv, 965 F.3d 165 (2devents, and 444 events. If the data demonstrated, after Cir. 2020)either of the interim milestones, a statistically signifi-cant improvement in OS as compared to the control Trial Control Group Expectations group, Newlink would end the trial and seek marketing NewLink Genetics Corporation (NewLink) is a bio-approval. In March 2014, NewLink reported data from pharmaceutical company that specializes in developingthe first set of interim trial results, and disclosed that an novel oncology products. In 2010, NewLink completedindependent Data Safety Monitoring Committee rec-enrollment for a Phase 2 trial for a potential treatment itommended that the trial continue and that the company was developing for pancreatic cancer patients after tu- not seek immediate FDA approval. NewLinks stock mor removal surgery, called HyperAcute Pancreas. Oneprice dropped following the disclosure of this news. of the criteria for enrollment in the trial was that subjectsDuring an investor call four days later, in response to a had to have an expected survival of at least 6 months.question about whether analysts could make the as-The Phase 2 trial did not have a control group, and itsumption that the [studys] control arm is living at 24 or was not double-blind. In June 2012, NewLink completed25 months, Vanahian stated that NewLink believed its the Phase 2 trial and announced that those treated withstudy would instead reflect survival rates in the control HyperAcute Pancreas had an overall survival rate of 24.1arm of no higher than the low 20s [months]. After the months. On September 27, 2013, NewLinks Presidentcall, NewLinks stock price rebounded. and Chief Medical Officer, Nicholas J. Vahanian, gaveBefore the second announcement of further trial results a presentation at a biotech conference and referredin March 2015, Vanahian and NewLinks Chairman and to the 24.1-month OS rate in the Phase 2 trial forCEO Charles J. Link sold $5 million and $10 million of HyperAcute Pancreas as remarkable. In comparison,their NewLink holdings, respectively. In March 2015, he stated that all major studies of pancreatic cancerNewLink announced the second set of interim results, from the last 30 years had reflected survival rates which similarly did not demonstrate the requisite level between 15 to 19, 20 months. Thats it. In fact, however,of statistical significance necessary to seek approval; several studies reflected longer OS rates. VahaniansNewLinks stock price fell again. During a July 2015 presentation also referenced a paper published in theearnings call, Vahanian stated that the interim results New England Journal of Medicine that identified sur- reflected a median OS rate of 28.5 months for the con-vival rates of 15.4 months and 12.7 months for Stage IIAtrol and test groups blended together, and reiterated and IIB pancreatic cancer patients, respectively, but heNewLinks belief that OS in the control arm [was] in the did not mention that this same paper presented survivallow 20s in months. After NewLinks reassuring state-rates of 24.1 months and 20.6 months for Stage IA andments, NewLink stock prices once again rebounded. IB patients, respectively. NewLink and Vahanian madeBetween the second and third sets of results, Vahanian several additional statements between 2013 and 2016and Link sold another $2 million and $9 million, respec-that expressed confidence in the Phase 2 trial results,tively, of their NewLink holdings. referring to the data at various times as encouraging,Finally, in March 2016, at the end of the Phase 3 trial, exceed[ing] any expectations, reflecting improve- NewLink announced that the third set of data showed ment in both disease-free and overall survival, and aa median OS rate in the test group of 27.3 months, very strong efficacy signal.which was below the 30.4-month survival rate for the At around the same time as certain of these state- control group, meaning that the Phase 3 trial had failed. ments, NewLink completed enrollment for its PhaseThe price of NewLink stock dropped by almost 31% on 3 HyperAcute Pancreas trial. The trial had up to threethis news. Shortly before publication of the third set 22'