b'the Ninth Circuit affirmed in part and reversed in part.With respect to loss causation, the court held that plain-In particular, the Ninth Circuit held that plaintiffs plausi- tiffs failed to plead a sufficient causal link between the bly alleged that: (1) Orexigens March 3, 2015 8-K wasMarch 3, 2015 alleged misrepresentations and the May materially misleading because it failed to disclose that12, 2015 Bloomberg article reflecting that Takeda had the Light Studys interim results were unreliable; andinitiated dispute resolution proceedings for a breach of (2) defendants May 8, 2015 statements were materi- the collaboration agreement, which plaintiffs alleged ally misleading because they misrepresented that theconstituted a corrective disclosure. While plaintiffs al-Light Study was ongoing and failed to disclose theleged that defendants unilateral decision[ ] to publish then-known findings that Contrave did not have anythe interim data was the proximate cause of Takedas statistically significant cardiovascular benefits. Upondecision to institute dispute resolution proceedings, remand back to the district court, defendants moved tothe court held that the chain of inferences cited in the dismiss a second time on the basis that plaintiffs failedcomplaint failed to support the connection. to adequately plead scienter or loss causation. OnOn December 9, 2020, the parties jointly informed the September 23, 2019, the district court denied defen- court that they had reached a settlement. The court set dants motion to dismiss in part and granted it in part.a briefing schedule for a motion to approve the settle-While the court held the complaint sufficiently stated ament, and hearing on the motion is scheduled for April claim with respect to some of the statements at issue, it29, 2021.held that plaintiffs failed to allege that the May 12, 2015 press release was a corrective disclosure with respect to alleged misrepresentations in Orexigens March 3,In re Nektar Therapeutics, Case No. 4:18-cv-2015 8-K. 06607 (HSG), 2020 WL 3962004 (N.D. Cal. On October 17, 2019, plaintiffs filed a second amendedJuly 13, 2020) complaint. Defendants thereafter moved to partiallyShort seller allegations concerning safety dismiss the amended complaint for failure to plead lossand efficacycausation, arguing that plaintiffs did not allege that de-fendants allegedly fraudulent statements on March 3,Nektar Therapeutics (Nektar) is a research-based 2015 had any causal connection to the losses plaintiffsbiopharmaceutical company that develops innovative purportedly suffered after the May 12, 2015 correctivemedicines, including treatments for cancer, autoim-disclosures. The motion did not seek to disturb themune disease, and chronic pain. Nektar developed the courts previous ruling that the complaint adequatelybiologic NKTR-214, an immuno-oncology candidate with stated a claim with respect to the May 8 statements.biased signaling, through a proteinan IL-2 receptor On November 2, 2020, the district court granted thesubunitthat stimulates proliferation and growth of partial motion to dismiss. Although defendants had onlytumor-killing immune cells. IL-2 has a short half-life and cited a failure to plead loss causation in their motion,is known to have unintended biologic consequences. the court concluded that in actuality, defendantsNKTR-214 adds polyethylene glycol molecules to IL-2 were also arguing that the amended complaint failed to(in a process known as pegylation), which potentially plead falsity. Considering the partial motion to dismissextends the half-life and causes fewer side effects.with this framing, the court granted the motion on theIn December 2015, Nektar announced it had dosed basis that plaintiffs failed to adequately plead (1) thatthe first human participants with NKTR-214 in a Phase 1 the March 3 representations challenged by defendantsclinical trial (EXCEL) for patients with advanced solid were misleading, and (2) loss causation with respect totumors. On January 10, 2017, Nektar presented results the challenged statements.from EXCEL at a healthcare conference, including a With respect to falsity, plaintiffs had alleged thatchart reflecting that cancer-fighting cells increased Orexigens March 3 8-K misleadingly failed to discloseby an average of 30-fold in tumors of ten trial partici-that the company had not consulted with Takedapants. Nektar continued to present the 30-fold increase before revealing the interim data (in addition to plain- chart at numerous investor conferences, and to provide tiffs theory that the 8-K misleadingly touted the interimcommentary on EXCELs participant pool, process, and results while omitting their unreliability, a theory theresults, including that NKTR-214 could fill the gap of Ninth Circuit had upheld and that defendants did notactually replenishing the patients own immune system.challenge on remand). The court rejected this theory,In February 2018, Nektar announced a collaboration holding that no statements in the 8-K were renderedwith Bristol-Myers Squibb (BMS) to evaluate NKTR-214 misleading by the omission of Orexigens failure toin a second clinical trial (PIVOT-02). On June 2, 2018, consult with Takeda, and therefore that plaintiffs failedNektar disclosed results from PIVOT-02 at a healthcare to plead that defendants had a duty to disclose thatconference, reporting that the drugs response rates information.44'