b'allegations with respect to 18 of the companys drugsOn August 5, 2016, BMS announced that CM-206 failed fell short of the minimum required by the Sherman Act,to demonstrate that Opdivo had outperformed chemo-and concluded that it would not be appropriate totherapy, and disclosed for the first time that the patient extrapolate wholesale anticompetitive activity frompopulation the trial considered as strongly expressed deficient generic drug allegations. The court held thatPD-L1 consisted of patients whose tumors expressed plaintiffs adequately alleged that one generic drug thatPD-L1 at rates of at least 5% (much lower than the 50% Defendants had challenged in their motion to dismiss,threshold used by Merck). That day, BMSs stock price Divalproex, was subject to a price-fixing agreement. Ondropped approximately 16%. On October 9, 2016, BMS this front, the court reiterated its conclusion from thefurther disclosed that the studys design precluded previous motion to dismiss that plaintiffs allegations,researchers from reaching any conclusions about the including the lack of an external triggering event sup- efficacy of Opdivo for patients whose expression of porting price increases, led to a plausible inference thatPD-L1 was higher than 5%, and that BMS had no means pricing increases were a result of collusion. Defendantsunder acceptable statistical methodologies of finding motion did not challenge plaintiffs allegations concern- a significant difference between the performance of ing anticompetitive conduct with respect to an addition- Opdivo and chemotherapy. On this news, BMSs stock al 19 generic drugs, so claims related to those drugs willprice dropped more than 10%.go forward as well. Finally, the court held that plaintiffsOn February 21, 2018, investors filed a putative class claims for losses caused by a May 28, 2016 reportaction complaint against BMS and its officers for vio-from UBS could proceed, holding that the question oflations of Sections 10(b) and 20(a) and Rule 10b-5 of whether the UBS report was a corrective disclosurethe 1934 Act, primarily alleging that defendants mis-(or instead merely reiterated information already in thecharacterized the design of the trial when they used public record as defendants argued) was not ripe forstrong to describe a 5% cutoff for PD-L1 expression. decision at the motion to dismiss stage. On September 30, 2019, the court granted defendants After resolving the motion to dismiss, the court grantedmotion to dismiss, with leave to amend, on the basis plaintiffs unopposed motion for class certification. Thethat plaintiffs failed to adequately plead scienter. The case is now in discovery. court did not analyze whether the complaint pleaded any material misstatements or omissions. Tung v. Bristol-Myers Squibb Company,On October 29, 2019, plaintiffs filed a second amend-Case No. 1:18-cv-01611 (MKV), 2020 WLed complaint. Defendants again moved to dismiss, arguing that, as with the previous complaint, plaintiffs 5849220 (S.D.N.Y. Sept. 30, 2020)failed to plead a strong inference of scienter and had Clinical Trial Eligibility not alleged any false or misleading statement of fact. On September 30, 2020, the court granted defendants Bristol-Myers Squibb Company (BMS) is a global phar- motion to dismiss. The court rejected the sufficiency maceutical company that seeks to discover, developof plaintiffs new allegations of scienter, which focused and deliver innovative medicines across a spectrumon an alleged industry-wide consensus that strong of therapeutic areas. One of its products is Opdivo, anPD-L1 expression meant something materially higher immuno-oncology drug that helps patients fight cancerthan the 5% cutoff used by BMS, and on stock sales by by inhibiting cancer cells from expressing a particularBMS executives. The court concluded that allegations protein, PD-L1, which, when expressed, can prevent thethat peer companies like Merck used the term strong bodys immune system from attacking such cancer cellsin reference to higher expression rates was insuffi-by binding to PD-1 proteins on T-cells. The effectivenesscientabsent citation to any industry publication or of Opdivo depends on the extent to which a patientsother guidanceto show that defendants must have cancer cells express PD-L1: if the cancer cells do not ex- known that their use of the term in reference to a 5% press that protein, then inhibiting PD-L1 expression like- cutoff was misleading. The court further concluded that ly would not make a difference. In January 2014, BMSplaintiffs allegations from an expert and confidential commenced a Phase 3 clinical trial, Checkmate-026witnesses were also inadequate because they did not (CM-206), to determine whether Opdivo is moreaddress the core issuewhether defendants knew effective than chemotherapy for patients with non- that a 5% expression rate was not the industry standard. small cell lung carcinoma whose cancer cells stronglyAdditionally, the court held that plaintiffs allegations expressed PD-L1. BMS did not disclose at the time howconcerning sales of stock at allegedly inflated prices much PD-L1 expression was required for a patient tofailed to raise the necessary inference of scienter, strongly express PD-L1. Later, in May 2014, Merck, abecause although certain trades were notable in light competitor, announced a similar study in which it limitedof their magnitude and timing in relation to CM-206 trial, eligibility to patients with PD-L1 strong expressing tu- stock sales alone are not sufficient and the amended mor, which Merck defined as meaning that at least 50%complaint contained no other support for an inference of the patients cancer cells expressed PD-L1. of scienter.29'