b'Ninth Circuit and California District Court Cases to Watch in 2021Hayden v. Portola Pharma, Inc. et al., CaseOn January 8, 2019, Portola announced its full com-No. 3:20-cv-00367 (VC) (N.D. Cal.)mercial launch of Andexxa. Throughout 2019, Portola Overstating Demand and Under-Reservingreported revenue growth and that its hospital demand for Product Returns for Andexxa was strong and growing. However, con-trary to Portolas assertions about Andexxa demand, Portola Pharmaceuticals, Inc. (Portola) is a California- many hospitals were opting for cheaper, off-label (i.e., based pharmaceutical company focused on the devel- non-FDA approved) alternatives, rather than Andexxa, opment of drugs for thrombosis, other blood disorders,which cost between $25,000 and $50,000 per dose. and inflammation. At the time of Portolas May 2013On January 9, 2020, Portola issued a press release dis-IPO, it was focused on researching and developing twoclosing that its Q4 2019 revenues from Andexxa were therapeuticsBevyxxa, a thrombosis prevention drug,projected to decline by 27% due to decreasing utiliza-and Andexxa, a drug used to reverse anticoagulationtion and an increase in Andexxas reserve for future for treatment of severe bleeds. product returns. After this news, Portolas stock price dropped by approximately 40%. On June 23, 2017, Portola announced that FDA ap- On January 16, 2020, investors filed a putative class proved Bevyxxa and that the company expectedaction complaint against Portola, its officers and direc-Bevyxxa to launch between August and Novembertors, and the underwriters for Portolas August 2019 2017. On this news, Portolas stock price increasedoffering, alleging violations of Sections 10(b) and 20(a) by 48.7%. Manufacturing issues, however, delayedand Rule 10b5 of the 1934 Act, and Sections 11, 12(a)Bevyxxas launch until Q1 2018. Once the drug(2), and 15 of the 1933 Act. Plaintiffs alleged that de-launched, its sales were below expectations, atfendants violated the 1934 Act by (1) making false and $606,000 and $33,000 in the first and second quartersmisleading statements reflecting that there was strong of 2018, respectively. On an August 9, 2018 earningsdemand for Andexxa when there was not, and (2) inflat-call discussing second quarter sales, Portola admitteding Andexxas net product revenues by under-reserv-that it was having difficulties commercializing Bevyxxa.ing for product returns, thereby misleading the public Eventually, after continued failed efforts to commer- about Andexxas actual value. Plaintiffs also alleged that cialize, Portola announced it would shift its focus fromdefendants violated the 1933 Act by making misleading Bevyxxa to Andexxa, and that it would incur a $27.5statements about Andexxa demand, revenues, reorder million wind-down charge to do so. rates, and return reserves in Portolas registration state-On May 3, 2018, Portola announced FDAs accelerat- ment for its August 2019 public offering. ed approval of Andexxa under the AAP, which allowsOn July 1, 2020, defendants moved to dismiss. Duringdrugs being developed to treat an unmet medical needoral argument on September 24, 2020, the courtto receive approval based on evidence of an effect onverbally granted defendants motion to dismiss, with a biomarker endpoint (rather than a clinical endpoint)leave to amend. On November 5, 2020, plaintiffs filed that is considered reasonably likely to predict a clinicaltheir first amended complaint. On December 15, 2020, benefit. FDA conditioned its approval on Portola con- defendants moved to dismiss the amended complaint. ducting a four-year post-market randomized control trialBriefing on defendants motion to dismiss is ongoing, for Andexxa. On December 31, 2018, Portola receivedand is expected to be completed by February 9, 2021. FDA approval for its Generation 2 manufacturing pro- A hearing on the motion is scheduled for February 25, cess, which would provide commercial scale volume to2021. support a global commercial launch of Andexxa. 54'