b'Takeda Pharmaceutical Company Limited (Takeda)Despite the DAP requiring Orexigen to keep the Light to develop and commercialize Contrave in the UnitedStudy data confidential, the company did not consult States, Canada, and Mexico. FDA, the Light Studys lead researcher, or Takeda After obtaining positive results in a prior clinical trialbefore disclosing the information in the 8-K (nor did that evaluated Contraves efficacy for aiding in weightOrexigen disclose its failure to consult these parties). loss, Orexigen initiated a clinical trial in an effort toOver the following two days, Forbes and Wall Street demonstrate that Contrave does not increase theJournal articles reported on Orexigens inappropriate risk of MACE. Orexigen initiated a randomized, dou- disclosure of the interim results. ble-blind, placebo-controlled clinical trial to evaluateOn March 26, 2015, further results from the Light Study the cardiovascular risk associated with Contrave (theshowed that the cardiovascular benefits seen in the Light Study). FDA indicated that in order for Contraveinterim results were not replicated with a larger sample to be approved, the Light Study needed to show thatsize, and the Light Study was terminated. However, Contrave did not increase the risk of MACE by 40% orOrexigen refused to authorize a draft press release more. In November 2013, the Light Studys first batchthat would have disclosed the additional data and an-(of four planned batches) of interim results showednounced the Light Studys termination. Instead, during that Contrave in fact reduced the risk of MACE by 41%an earnings call on May 8, 2015, Orexigen executives compared to placebo. At the time, Orexigen was boundrepresented that the Light Study is continuing and that by a data access plan (DAP), which prohibited theif there was a decision to terminate the [Light Study,] company from sharing interim results beyond a corethat would be a disclosure that we would make. Just group to protect the integrity of the double-blind trial.four days later, on May 12, 2015, Orexigen announced On July 2, 2014, Orexigen filed a patent applicationthe termination of the Light Study, and the Light Studys (the 810 Application) with the USPTO to seek patentlead researcher published further interim results show-protection over the cardiovascular benefit of Contraveing that Contrave did not have any statistically signif-based on the Light Studys first batch of interim data.icant cardiovascular benefits. Also on May 12, 2015, Consistent with the DAP, Orexigen requested that theBloomberg reported that Takeda had initiated dispute 810 Application be kept confidential. However, in earlyresolution proceedings against Orexigen based on January 2015, Orexigen rescinded its request to keepOrexigens alleged breaches of its collaboration agree-the application confidential. ment with Takeda, demanding $200 million. On May 13, On March 3, 2015, the USPTO issued U.S. Patent No.Orexigens stock price fell 25%. 8,969,371 (the 371 Patent) from the 810 Application.Investors thereafter filed a putative class action com-The same day, Orexigen filed an 8-K announcing theplaint alleging violations of Sections 10(b) and 20(a) and 371 Patent and the Light Study interim results, disclos- Rule 10b5 of the 1934 Act against Orexigen and its ing that the 371 Patent incorporate[d] data from theofficers. Defendants moved to dismiss, and the court, Light Study, and contain[ed] claims related to a posi- considering only the elements of falsity and materiality, tive effect of Contrave on [cardiovascular] outcomes.dismissed plaintiffs complaint. Plaintiffs appealed, and 43'