Shash v. Biogen Inc., 84 F.4th 1

Background

Biogen developed aducanumab for Alzheimer’s and ran two Phase III trials, ENGAGE and EMERGE, with identical designs but staggered starts and three dose arms (placebo, low, high).
Protocol amendments (PV3, PV4) increased titration and raised high-dose for APOE4 carriers, producing subgroup differences (carriers vs. noncarriers) in exposure and interruptions.
A futility analysis (cutoff Dec. 28, 2018) prompted trial termination in March 2019; subsequent internal post‑hoc review showed EMERGE high‑dose met endpoints while ENGAGE did not.
In Oct.–Nov. 2019–2020 Biogen executives publicly stated the data showed a sharp dose‑response and that "all data" were consistent with needing the high dose; Biogen withheld certain subgroup analyses pending regulatory review.
Plaintiffs sued under §10(b) and §20(a), alleging Biogen concealed subgroup data that undermined dose‑response and plaque‑outcome claims; the district court dismissed for failure to plead a misleading statement/omission, scienter, and loss causation.
The First Circuit affirmed dismissal except it reversed as to one statement — Sandrock’s "all data" remark — holding plaintiffs adequately pled a misleading omission, scienter, and loss causation for that statement and remanded.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Material misrepresentation/omission	Sandrock’s "all data" statement was misleading because subgroup data showed inconsistent dose‑response (noncarriers didn’t benefit; carriers’ results varied) and was omitted.	Statements were opinions or truthful topline disclosures; subgroup data were properly withheld for regulatory reasons and did not render statements false.	Reversed as to Sandrock’s "all data" statement: omission of subgroup data plausibly made the statement misleading and was material. Other efficacy statements: dismissal affirmed (no adequate pleading of material falsity).
Scienter (state of mind)	Defendants knew of subgroup analyses, selectively withheld inconsistent data, and manipulated analyses to support approval — supporting intent or recklessness.	Close attention to data, post‑hoc analyses, and withheld subgroup detail do not establish intent to deceive; FDA engagement and disclosures undercut inference of fraud.	Plaintiffs adequately alleged scienter for Sandrock’s "all data" statement (knew of contradictory subgroup data and consciously withheld it). Scienter not adequately pled for other efficacy statements.
Loss causation	Massie’s statistical critique (published Nov. 4, 2020) was a corrective disclosure revealing the omitted truth; the stock drop after Nov. 4–9 shows causation.	Any corrective information was public before plaintiffs purchased shares, so price decline was not caused by defendants’ alleged fraud.	Rejected the district court’s per se rule requiring immediate price drop; plaintiffs plausibly alleged a delayed market reaction to Massie’s report, so loss causation survives for the "all data" claim.
§20(a) control‑person claim	Derivative of §10(b) claim; if §10(b) survives as to "all data," §20(a) should too.	§20(a) fails if underlying §10(b) fails.	Vacated district court’s §20(a) dismissal insofar as it depends on the reinstated §10(b) claim for the "all data" statement; otherwise affirmed.

Key Cases Cited

Tellabs, Inc. v. Makor Issues & Rts., 551 U.S. 308 (2007) (standard for evaluating competing inferences on scienter under the PSLRA)
Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund, 575 U.S. 175 (2015) (opinion‑statement liability; reasonable investor may infer facts about the speaker’s basis)
Basic Inc. v. Levinson, 485 U.S. 224 (1988) (materiality as alteration of the total mix of information)
Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (2005) (loss causation requirement)
Mass. Ret. Sys. v. CVS Caremark Corp., 716 F.3d 229 (1st Cir. 2013) (loss causation and corrective disclosure framework)
Constr. Indus. & Laborers Joint Pension Tr. v. Carbonite, Inc., 22 F.4th 1 (1st Cir. 2021) (PSLRA pleading specificity and treatment of opinion statements)
Mehta v. Ocular Therapeutix, Inc., 955 F.3d 194 (1st Cir. 2020) (pleading standards for securities claims)
In re Ariad Pharms., Inc. Sec. Litig., 842 F.3d 744 (1st Cir. 2016) (scienter pleading requirements)
Loc. No. 8 IBEW Ret. Plan & Tr. v. Vertex Pharms., Inc., 838 F.3d 76 (1st Cir. 2016) (scienter and attention to clinical data does not alone prove recklessness)
Alaska Elec. Pension Fund v. Pharmacia Corp., 554 F.3d 342 (3d Cir. 2009) (selective presentation of clinical data can support scienter)