b'of data, NewLink reported in its Form 10-K that oneThe Second Circuit concluded that, while plaintiffs clinical site in the Phase 3 trial may not have been inclaims regarding the companys statements touting compliance with certain Good Clinical Practice (GCP)HyperAcute Pancreass efficacy and Phase 2 trial requirements. NewLink identified the noncompliance asresults were properly dismissed as puffery, the second a minor procedural issue involving one clinician. In re- amended complaint adequately pleaded that the other porting this news, one securities analyst stated that thestatements at issue were actionable. With respect to clinical site at issue only ha[d] a few patients enrolleddefendants statements about pancreatic cancer OS and in case any patients need to be excluded . exclu- ratesspecifically, the representations that all major sion of these patients should not have a material impactstudies of pancreatic cancer showed survival rates of on the trial. The price of NewLink stock dropped after15-20 months, while failing to disclose that several stud-this announcement by nearly 13%. ies reflected a longer survival period, and that median After disclosure of the negative Phase 3 trial results,survival for the Phase 3 control arm, in months, would investors filed a putative class action complaint in thenot be higher than the low 20sthe Second Circuit Southern District of New York against NewLink andrejected the district courts holding that such state-its officers, asserting claims under Sections 10(b) andments were non-actionable opinion. The court held 20(a) of the 1934 Act, and Rule 10b-5. The amendedthat even if the statements were opinion, they were complaint alleged that defendants made misleadingstill actionable under the Supreme Courts decision in statements regarding (1) the Phase 2 trial results, whichOmnicare, Inc. v. Laborers Dist. Council Const. Industry the company touted as remarkable; (2) the scientific lit- Pension Fund, because a reasonable investor would erature on pancreatic cancer survival rates and the ex- have understood them as implying untrue factsi.e., pected survival rates in its Phase 3 clinical trial; and (3)that no credible studies haveenrollment in the Phase 3 trial, which plaintiffs allegedshown . survival rates higher than 20 months.were misleading because the company had flouted itsThe Second Circuit also vacated the district courts de-own enrollment criteria. On September 7, 2018, the dis- cision with respect to defendants statements about en-trict court dismissed plaintiffs first amended complaint,rollment of the Phase 3 trial. The district court held that with leave to amend.the complaint adequately pled that such statements Plaintiffs thereafter filed a second amended complaint, adding further allegations in support of falsity and loss causation. Defendants again moved to dismiss. OnThe court held that even if the statements February 13, 2019, the district court granted defen-dants motion to dismiss as to all claims, finding that (1)were opinion, they were still actionable the statements regarding the Phase 2 trial results wereunder the Supreme Courts decision in nonactionable puffery; (2) defendants statements re-garding the scientific literature on OS rates overall, andOmnicare, Inc. v. Laborers Dist. Council their statements on expected OS rates in the Phase 3Const. Industry Pension Fund, because a control group, were opinions, not actionable statements of fact; and (3) plaintiffs had not adequately pled thatreasonable investor would have understood their losses were caused by NewLinks false statementsthem as implying untrue factsi.e., that concerning the Phase 3 clinical trial design (i.e., failed to plead the loss causation element).no credible studies have shown . survival Plaintiffs appealed, and the Second Circuit reversedrates higher than 20 months.and vacated in part the district courts decision. 23'