b'Defendants moved to dismiss plaintiffs amended com- systems disorders. Its lead drug is nuplazid, an anti-plaint, and the court granted the motion. First address- psychotic drug. In September 2015, Acadia submitted ing falsity, the court noted that plaintiffs allegationsan NDA to FDA for nuplaizd. That same month, FDAs concerning what defendants omitted from the NDAprimary drug reviewer for nuplaizd issued a clinical were impreciseat times suggesting the NDA had noreview recommending that nuplazid not be approved, reference to prior fenfluramine research, while else- in part as a result of a high rate of death in patients where alleging the NDA merely excluded references totreated with the drug in clinical trials. In March 2016, fenfluramine toxicity literature. While the former mighthowever, an advisory committee voted to recommend significantly alter the total mix of information avail- approval of the drug. FDA accepted the recommenda-able to investors, the court ultimately found that, readtion and approved nuplazid in April of 2016, though it carefully, the amended complaint pled the latter, whichrequired Acadia to provide a black box warning for was fatal to plaintiffs claims. In particular, the courtthe drug cautioning of an increased risk of death in el-reasoned that the amended complaint failed to pleadderly patients with dementia-related psychosis treated that FDA regulations required an NDA to referencewith antipsychotic drugs. In April 2016, Acadia issued particular toxicology studies. As a result, the court held,a press release announcing that FDA had approved (1) Zogenixs incorrect assessment of what literature tonuplazid. Soon thereafter, three members of Acadias reference in its NDA did not make its public statementsboard of directors announced they were resigning from fraudulent or misleading, and (2) a reasonable investorthe board. On November 7, 2016, Acadia announced would not have assumed the NDA necessarily includedthat it was receiving positive feedback regarding the all publicly available literature on fenfluramine. drug, and that prescriptions and net product sales were Second, the court dismissed the amended complaintgrowing. for the independent reason of failure to adequatelyFollowing nuplazids launch, Acadia spent more than plead scienter. According to the court, plaintiffs failed to$600,000 on consulting, speaking, and travel and show that defendants took a deliberate and recklesslodging payments to doctors in 2016, and more than gamble to exclude the non-clinical studies, a premise$8.6 million in 2017. Many physicians who received on which plaintiffs claims depended, particularly be- payments in 2016 and 2017 prescribed nuplazid. In April cause the controlling statute did not make clear which2018, CNN published a story reporting on deaths in particular studies an NDA must include. The court alsopatients treated with nuplazid and reflecting concerns emphasized the absence of a plausible motive fromthat the drug had been approved too quickly. Acadias the amended complaint, highlighting that plaintiffsstock price fell 23.4%. Shortly after the CNN story, FDA hypothetical rationales as to why defendants wouldannounced that it would reexamine the drugs safe-jeopardize FDA approval by intentionally submitting aty. In July 2019, the Southern Investigative Reporting deficient NDA simply did not hold water. Ultimately,Foundation reported that nuplazids success was a the amended complaint did not support the requisiteresult of Acadias dispensing [of] wads of cash to doc-inference of scienter because plaintiffs offered no spec- tors to incentivize prescription writing and downplaying ificity with respect to how defendants were supposedmounting reports of patient deaths. Acadias stock to have known that specific toxicity literature was criti- price dropped another 6.8%. Acadia later disclosed that cal to the FINTEPLA NDA.it had received a civil investigative demand from the The court granted plaintiffs leave to amend to giveDOJ requesting information about Acadias sales and them the opportunity to plead unambiguously, if true,marketing of nuplazid.that the NDA did not contain a single reference to priorIn July 2018, investors filed a putative class action research on fenfluramine, which could in fact be suffi- complaint, asserting violations of Sections 10(b) and cient to state a claim. On February 13, 2020, however,20(a) and Rule 10b-5 of the 1934 Act against the com-the parties filed a stipulation dismissing the case withpany and certain of its officers. The lead plaintiff filed a prejudice, which the court entered. consolidated complaint, alleging that defendants made materially false and misleading statements and failed to disclose material adverse facts relating to: (i) adverse In re Acadia Pharmaceuticals Inc. Securitiesevents, safety concerns, and deaths in nuplazid pa-Litigation, Case No. 18-cv-01647 (AJB),tients that increased the risk FDA would reconsider its 2020 WL 2838686 (S.D. Cal. June 1, 2020)approval of the drug, (ii) Acadias kickback payments to Nondisclosure of Physician Payments physicians to prescribe nuplazid, (iii) Acadias reported net sales being generated by undisclosed improper Acadia Pharmaceuticals Inc. (Acadia) is a bio-business practices, and (iv) the increased risk of regu-pharmaceutical company focused on the developmentlatory action stemming from these improper business and commercialization of medicines for central nervouspractices. 52'