b'Inchen Huang v. Higgins, Case No.amended complaint, claiming the same violations of 17-cv-04830 (JST), 443 F. Supp. 3d 1031the 1934 Act, but adding 120 pages of new allegations. (N.D. Cal. 2020)Defendants again moved to dismiss on June 17, 2019.Off-label marketing On March 11, 2020, the court again granted defendants motion to dismiss, holding that plaintiffs failed to plead Assertio Therapeutics, Inc. (Assertio), previouslyfalsity, materiality, collective or individual scienter, and known as Depomed, Inc., is a California-based special-ty pharmaceutical company that develops, sells, and licenses products for pain and other central nervousThe court concluded that the complaint system conditions. On April 2, 2015, Assertio acquired the U.S. rights to the NUCYNTA franchise, a line of opi- failed to (1) allege facts sufficient to support oid drugs that thereafter drove the majority of Assertiosan inference that defendants had engaged revenues. In the companys Form 10-Ks and 10-Qs between February 26, 2015 and May 10, 2017, Assertioin an illegal off-label marketing campaign, disclosed risk factors that reflected, in relevant part,such that none of the statements were that (1) Assertio could incur significant liability for pro-moting the off-label use of drugs; (2) Assertios failureactually misleading; (2) raise a sufficiently to comply with regulations governing pharmaceuticalstrong inference of scienter because it marketing could adversely affect its business; and (3) changes in laws and regulations applicable to the phar- alleged only isolated instances of off-label maceutical industry could adversely affect Assertio.marketing, not widespread deception; When Assertio filed its August 2017 10-Q, it disclosed that it had received subpoenas related to opioid salesand (3) adequately allege loss causation, and marketing from the Office of the Attorney Generalincluding because it pointed to events of Maryland and the United States Department of Justice and an opioid-related request for informationconcerning the opioid industry as a from a member of the United States Senate Committeewholeannouncements of industry-wide on Homeland Security and Governmental Affairs. The day after Assertio disclosed these inquiries, its stockinvestigations and the Presidents price fell more than 33%. declaration that the opioid epidemic was On August 18, 2017, investors filed a putative class ac- a public health emergencynot Assertio tion complaint against Assertio and three of its officers alleging violations of Sections 10(b) and 20(a) and Rulein particular.10b5 of the 1934 Act. Plaintiffs claim that Assertio engaged in a widespread off-label (i.e., non-FDA ap-proved use) marketing campaign for NUCYNTA, and that statements by defendants concerning Assertiosloss causation. With respect to falsity, the court held sales growth were misleading because they failed tothat plaintiffs central claim was doomed by the lack attribute the companys growth to the illegal off-labelof allegations supporting the inference that an illicit marketing campaign.off-label marketing campaign actually took place at On March 18, 2019, the district court dismissed plaintiffsAssertio. While the complaint alleged some instanc-amended class action complaint, with leave to amend.es of off-label marketing, the court concluded that its The court concluded that the complaint failed to (1)allegations were insufficient to demonstrate a systemic allege facts sufficient to support an inference that de- or widespread campaign. Similarly, the court held that fendants had engaged in an illegal off-label marketingplaintiffs failed to allege scienter in light of the amended campaign, such that none of the statements were actu- complaints failure to allege the existence of a wide-ally misleading; (2) raise a sufficiently strong inferencespread campaign. Finally, the court held that plaintiffs of scienter because it alleged only isolated instancesfailed to plead loss causation. Like plaintiffs earlier of off-label marketing, not widespread deception; andcomplaint, the amended complaint lacked any allega-(3) adequately allege loss causation, including becausetions connecting the risks of the alleged off-label mar-it pointed to events concerning the opioid industry asketing to a subsequent stagnation or decrease in off- a wholeannouncements of industry-wide investiga- label prescriptions underlying the negative financial tions and the Presidents declaration that the opioid epi- news released on [p]laintiffs loss causation dates. demic was a public health emergencynot AssertioMoreover, as with plaintiffs earlier attempt, the in particular . On May 2, 2019, plaintiffs filed a secondcomplaints citations to investigations and reports 48'