b'and product mix. The next day, the companys stock price declined by approximately $59 per share, orThe court also held that the amended nearly 20%.complaint adequately pleaded scienter, An investor then filed a putative class action complaint against Align and its officers, alleging violations ofboth through the core operations doctrine, Sections 10(b) and 20(a) and Rule 10b-5 of the 1934under which critical aspects of a business Act, on the grounds that defendants made false and misleading statements concerning industry competi- are presumed known to senior officers, tion. Plaintiff cited significant changes to the compa- and through particularized allegations nys promotional and marketing strategy to support its contention that the company knew, but intentionallyfrom former employees of Align that were down-played, competitors impact on sales. After con- directly tied to the alleged misstatement solidation with a related case, defendants filed a motion to dismiss, which the district court granted, with leave toand demonstrated that Align had adjusted amend, holding that the complaint had failed to iden- its business in response to competition.tify any false or misleading statements or adequately plead scienter. Plaintiff filed an amended complaint on November 29, 2019, adding additional allegations asamended complaint adequately pleaded scienter, both well as a new claim against Aligns CEO under Sectionthrough the core operations doctrine, under which 20A of the 1934 Act for insider trading. critical aspects of a business are presumed known to On September 9, 2020, the district court granted in partsenior officers, and through particularized allegations defendants motion to dismiss the amended complaint.from former employees of Align that were directly The court dismissed with prejudice claims with respecttied to the alleged misstatement and demonstrated to five out of plaintiffs six alleged misstatements. First,that Align had adjusted its business in response to the court dismissed an alleged misstatement regard- competition.ing Aligns expectations for Q3 2018 gross marginsFinally, the court dismissed with prejudice plaintiffs and ASPs, finding that it was protected by the PSLRAsclaims for insider trading against Aligns CEO, holding safe harbor for forward-looking statements. The courtthat plaintiff failed to adequately allege that plaintiffs also dismissed four alleged misstatements concerningtrading activity was contemporaneous with the CEOs Aligns characterizations of its susceptibility to the in- alleged insider trades, which is necessary to state a crease in competition in the invisible aligner market andprivate right of action for insider trading under Section Aligns plans to address the competition, holding that20A of the 1934 Act. The court found that plaintiffs plaintiff failed to adequately allege that the statementstrades were either made before the CEOs trade, were were false when made. The court did, however, find theat a price below the CEOs selling price, or were too amended complaints allegations adequate as to onedistant in time from the CEOs trade to be considered claimed misrepresentation, in which Aligns CEO statedcontemporaneous. during an investor call that theres not . anything were adjusting the business around right now in responseDefendants answered the amended complaint on to an analysts question about impacts of competition.September 23, 2020, discovery is now underway. The court noted that the statement was a close call,Plaintiffs motion for class certification is due on July 13, but nonetheless concluded that it was conceivably2021, and summary judgment motions are due by May false in light of the alleged $200-per-unit discount,19, 2022. which could sufficiently demonstrate the falsity of the suggestion that Align was not adjusting its business in response to competition. The court also held that theKhoja v. Orexigen Therapeutics, Inc., Case No. 15-cv-540 (JLS), 2020 WL 6395629(S.D. Cal. Nov. 2, 2020) According to the court, plaintiff selectivelyTerminated clinical trialomit[ted] portions of the full statement[s]Orexigen Therapeutics, Inc. (Orexigen) is a biotech-and fail[ed] to allege particularized factsnology company focused on developing pharmaceuti-cals for the treatment of obesity. Its primary treatment that demonstrate why the statement[s]candidate is Contrave, a weight-loss drug designed to were false. treat patients with obesity at high risk for major adverse cardiovascular events (MACE). Orexigen worked with 42'