b'Circuit Case StatusYear Filings 1st 2nd 3rd 9th Other PercentPercentPercentPercent Dismissed Settled Remanded Ongoing2005 32 5 4 4 3 16 56.3% 43.8% 0% 0%2006 25 0 5 3 3 14 44% 56% 0% 0%2007 29 0 11 2 7 9 58.6% 41.4% 0% 0%2008 25 5 5 2 2 11 40% 60% 0% 0%2009 22 1 1 2 11 7 36.4% 63.6% 0% 0%2010 33 3 7 2 15 6 45.5% 51.5% 3% 0%2011 21 0 5 0 6 10 57.1% 38.1% 4.8% 0%2012 28 2 5 5 5 11 57.1% 42.9% 0% 0%2013 34 2 10 5 11 6 41.2% 58.8% 0% 0%2014 38 3 8 11 11 5 52.6% 47.4% 0% 0%2015 42 6 4 5 18 9 52.4% 40.5% 7.1% 0%2016 65 5 22 8 20 10 47.7% 35.4% 1.5% 15.4%2017 65 7 17 15 13 13 58.5% 20% 3.1% 18.5%2018 56 3 15 11 15 12 41.1% 17.9% 0% 41.1%2019 62 3 23 12 11 13 22.6% 11.3% 0% 66.1%2020 52 1 13 9 21 8 1.9% 0% 0% 98.1%Average36 3 8 5 9 11 44.0% 49.0% 0.9% 6.1%(19972019)Figure 2:1 Sectors and subsectors are based on the Bloomberg Industry Classification System.and misleading statements or omissions with scienterDefendants did not fare as well in the Second Circuit (i.e., intentionally or recklessly). The First Circuit issuedand the New York federal courts in 2020. As we noted two decisions in 2020, affirming dismissal in both cases.in last years Year in Review, the filing activity in the For example, in Ocular Therapeutix, the Court affirmedSecond Circuit in 2019 was particularly high, so it is dismissal of claims premised on alleged misstatementsunsurprising that the Second Circuit issued three deci-relating to manufacturing issues identified in a Formsions in 2020 in cases against life sciences and health-483 issued by FDA and a complete response letter latercare companies. The Second Circuit reversed dismissal issued by FDA. The Court held that the complaint failedin one case, affirmed dismissal in the second case, and to allege facts to support the requisite strong inferenceaffirmed dismissal in the third case but concluded that of scienter, pointing to the Companys informativethe district court abused its discretion by refusing to al-disclosures concerning the Form 483 observationslow plaintiffs leave to amend without explaining its basis and the need to address and resolve the issues iden- for doing so. In Abramson v. NewLink, for example, the tified by FDA therein. The Court then weighed theSecond Circuit affirmed the district courts dismissal of inferences to be drawn from the complaints allegationsclaims based upon alleged misstatements relating to and concluded that the more reasonable inferencePhase 2 clinical trial results (overall survival rates) and to be drawn was that the defendants were expressinghow they compared to historical pancreatic cancer rates an intent to comply with good manufacturing prac- discussed in scientific literature, expected results for tices, not claiming that the Company was complyingthe Phase 3 trial as compared to control group results, presently in all respects. Courts within the District ofand enrollment for the Phase 3 trial. The district court Massachusetts likewise dismissed all class actionsdismissed the complaint in full, primarily on the basis against life sciences and healthcare companies decid- that the alleged misstatements were either inactionable ed in 2020 and denied several motions by plaintiffspuffery (vague statements of optimism) or statements of seeking to amend their complaints. opinion. The Second Circuit reversed, holding that even 7'