b'Decisions Issued by the Ninth Circuit and California District CourtsNguyen v. Endologix, Inc., Case No.the company remained on track with its timeline for 18-56322, 962 F.3d 405 (9th Cir. 2020)FDA approval, which another Endologix officer reiter-ated at conference a few days later. Later in May 2016, Medical device efficacy issuesEndologix released data from the clinical trials first year, Endologix, Inc., (Endologix) is a medical device com- which showed overall technical and treatment success, pany focused on the manufacture and sale of medicalwith only a 2.3% migration rate. Moreover, the data devices treating abdominal aortic aneurysms. One suchshowed that the rate of endoleaks was the lowest rate device is Nellix, which was designed to treat abdomi- ever reported for a clinical trial study of an endovascu-nal aortic aneurysms through a new method known aslar abdominal aortic aneurysm device. On June 11, 2016, endovascular sealing. Endovascular sealing is thoughtEndologix submitted the trials first-year results to FDA. to reduce certain post-procedure complications asso- On a November 1, 2016 call with investors, Endologix ciated with other aneurysm repair devices, includingdisclosed that it had given FDA an updated data cut migration, which occurs when a device moves fromthat showed an increase in migration rates for study the location in which it was originally placed, and whichparticipants after two years. Endologixs CEO stated can lead to aneurysm expansion and rupture. during the call that the solution was a simple update Endologix first introduced Nellix in Europe in Februaryto the patients selection criteria to remove certain 2013, after receiving CE Mark approval from Europeantypes of patients who were particularly susceptible to regulators. At the end of 2013, in an effort to expand itsNellix migration, which led to an extremely positive reach beyond Europe and market Nellix in the Unitedsafety and durability result. In light of its purported States, Endologix sought premarket approval (PMA)solution, Endologix further stated on the call that the from FDA. In December 2013, Endologix receivedFDA approval timeline for Nellix remained unchanged. FDA approval to conduct a clinical trial for Nellix in theBut in a November 16, 2016 press release, Endologix United States. Endologix began the U.S. trial in Januarydisclosed an eighteen-month delay because FDA had 2014. requested that Endologix provide it with two years of follow-up data for clinical trial participants. That day, In 2015, doctors in Europe began sending EndologixEndologixs share price fell more than 20.5%. The complaints and incident reports suggesting that Nellixnext day, the company explained that FDAs request was migrating in their patients. During efforts to solvehad been prompted by the increase in migration from the Nellix migration issue, Endologix discovered thatyear one to year two. Six months later, on May 17, 2017, Nellix was dangerous for certain patients, especiallyEndologix announced that it would no longer seek FDA those with thrombosis. In March 2016, Endologix heldapproval of Nellix. Instead, it would focus its efforts on its annual symposium in London, at which the companya second-generation Nellix device, which the company discussed the scope of the migration problem with itsestimated would not receive FDA approval until 2020. device and noted that the company did not yet have aOn the news, Endologixs share price fell over 36%. Two solution.months later, the SEC initiated an investigation into the On May 5, 2016, Endologixs CFO reported at a healthevents surrounding Nellixs FDA approval process.care conference that the company expected FDAOn January 3, 2017, investors filed a putative class approval of Nellix in the fourth quarter of 2016 oraction complaint against Endologix and its officers for the first quarter of 2017. That same month, the CFOviolations of sections 10(b) and 20(a) and Rule 10b5 stated during an investor call that Nellix was having aof the 1934 Act, alleging that defendants made know-fantastic performance outside of the U.S. In a pressingly false statements about the prospects for FDA release issued the same day, Endologix disclosed thatapproval of Nellix because defendants knew Nellix 40'