451 F.Supp.3d 176
D. Mass.2020Background
- Alnylam Pharmaceuticals developed patisiran (Onpattro) for hATTR amyloidosis and submitted an NDA in late 2017 based largely on the Phase 3 APOLLO trial.
- APOLLO’s primary endpoint targeted polyneuropathy; the trial also included a cardiac subpopulation, secondary endpoints, and exploratory cardiac assessments.
- Alnylam announced APOLLO met primary and secondary endpoints; investors were told the data could support approval/labeling for cardiac manifestations.
- In Aug. 2018 the FDA approved patisiran for polyneuropathy only and did not include cardiomyopathy labeling; the EMA later approved and included cardiac data on its label.
- Lead plaintiff alleged defendants made materially false/misleading statements about cardiac efficacy, safety, and prospects for FDA approval, injuring investors during Feb 15–Sept 12, 2018.
- The District Court granted defendants’ motion to dismiss the Amended Complaint without prejudice, finding plaintiffs failed to plead actionable misrepresentations and failed the PSLRA scienter pleading requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants made materially false or misleading statements about APOLLO’s ability to support FDA approval for cardiomyopathy | APOLLO was not designed to test cardiac efficacy and defendants falsely suggested FDA approval/label for cardiomyopathy was supported | APOLLO’s protocol disclosed cardiac secondary/exploratory endpoints and the EMA’s later label inclusion shows cardiac data existed and approval was plausible | Court: No actionable misrepresentation; disclosures and study design refute claim |
| Whether defendants concealed or misreported cardiac safety signals (deaths) | Alnylam failed to disclose higher rate of cardiac-related deaths in patisiran arm and misclassified some deaths | FDA review found small numbers, no causal link, and limitations in interpreting the deaths; Alnylam disclosed death counts | Court: Safety statements/omissions not materially misleading given FDA’s safety conclusions and small sample limitations |
| Whether forward-looking statements re: approval are protected by the PSLRA safe harbor | Statements predicting approval/labeling are actionable | Statements were forward-looking and accompanied by meaningful, specific cautionary language (conference-call warnings, SEC filings, slides) | Court: Many challenged approval statements fall within PSLRA safe harbor and are non-actionable |
| Whether plaintiffs pleaded scienter (intent or recklessness) adequately | Insider sales, motive from a related trial failure, and alleged business incentives show a strong inference of intent to defraud | Trades were routine, tied to option expirations or 10b5-1 plans, not unusually timed or suspicious; no direct evidence of fraud | Court: Plaintiffs failed to plead a strong, cogent inference of scienter; scienter not established |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (standards for plausibility at the motion to dismiss stage)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must be plausible, not merely conceivable)
- Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27 (elements of securities-fraud claim under §10(b) and Rule 10b-5)
- Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (standard for pleading scienter; competing inferences test)
- Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (loss causation and elements of securities claims)
- ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46 (1st Cir.) (securities-fraud elements and pleading rules)
- Greebel v. FTP Software, Inc., 194 F.3d 185 (1st Cir.) (insider trading/suspicious trading analysis)
- In re Stone & Webster, Inc., Sec. Litig., 414 F.3d 187 (1st Cir.) (PSLRA safe-harbor/forward-looking statements)