MEMORANDUM AND ORDER ON DEFENDANTS’ MOTIONS TO DISMISS
Plаintiff Genzyme Corp. alleges in a Verified Complaint (VC) that defendants Shire Human Genetic Therapies, Inc. (Shire HGT), and Shire pic, violated the Lanham Act, 15 U.S.C. § 1125 et seq., by publishing and distributing a press release falsely advertising the superior qualities of Shire’s Gaucher disease treatment drug VPRIV over those of Genzyme’s competing brand, Cerezyme. Shire HGT moves to dismiss the Complaint pursuant to Fed. R.Civ.P. 12(b)(6) for failure to state a claim for which relief may be granted. Shire pic moves to dismiss for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). The issues being fully briefed, the motion of Shire HGT will be denied, while the motion of Shire pic will be allowed.
BACKGROUND
Gaucher disease is a rare genetic disorder caused by a deficiency of glucocerebrosidase, an' enzyme that breaks down fatty substances (lipids) that accumulate in body tissues. VC ¶ 10. Without the enzyme, the buildup of harmful amounts of lipids prevents cells and organs from functioning properly. Id. Symptoms of Gaucher disease include enlargement of the liver and spleen and reduced bone mineral density, bone thinning, аnd weakened bones that are easily fractured. Id. ¶¶ 10-12. Approximately 10,000 people worldwide, including 3,200 people in the United States, suffer from Gaucher disease. Id. ¶ 13. It is particularly prevalent among Ashkenazi Jews.
Genzyme, a subsidiary of Sanofi SA, is a Massachusetts biotechnology company that focuses on treatments for rare genetic disorders, including Gaucher disease. Id. ¶ 6. In 1994, Genzyme received Food and Drug Administration (FDA) approval to manufacture and sell a drug called Cerezyme (imiglucerase for injection), a long-term enzyme replacеment therapy for patients with Type 1, the most common of the three types of Gaucher disease. Id. ¶¶ 11 & 14. Cerezyme acts like a naturally occurring enzyme and targets cells in which a buildup of lipids occurs. Id. ¶ 14. Over the years, Cerezyme has been used by approximately 6,000 Gaucher disease patients. Id.
On June 28, 2012, Shire HGT issued a press release entitled “Shire’s VPRIV (velaglucerаse alfa for injection) Shows Significant Improvement in Gaucher-Related Bone Disease.” VC ¶ 17 & Ex. A. The subheadline of the press release stated that “[i]n a head-to-head trial between VPRIV and Cerezyme (imiglucerase), only patients treated with VPRIV experienced statistically significant improvement in lumbar spine bone mineral density at 9 months.” VC-Ex. A. The press release trumpeted “new data that show VPRIV (velaglucerase alfa for injection), the company’s enzyme replacement therapy for [T]ype 1 Gaucher disease, significantly improved selected markers of Gaueher-related bone disease in patients.”
[rjesults from a head-to-head Phase III study (HGT-GCB-039) of VPRIV and Cerezyme, and follow-on extension trial (HGT-GCB-044) of VPRIV, demonstrate a statistically significant improvement in lumbar spine (LS) BMD [ (bone mass density) ] in Gaucher patients starting at nine months of treatment with VPRIV (P<0.05). Patients participating in the study were administered 60 U/kg every other week of either VPRIV or Cerezyme for nine months as part of the HGT-GCB-039 study. All patients, including those who received Cerezyme, subsequently received 60 U/kg every other week of VPRIV for an additional 15 months in the extension trial (HGT-GCB-044).
Clinically and statistically significant improvement from baseline in mean LS Z-score was seen at nine months of treatment with VPRIV, but not in the cohort of patients treated with Cerezyme. BMD, evaluated as an exploratory endpoint in the Phase III and extension studies, was measured by dual-energy x-ray absorptiometry (DEXA scan). Median LS Z-scores at baseline were -1.46 (-3.50, 0.98) in patients treated with VPRIV, and -0.86 (-2.17, 2.02) in patients treated with Cerezyme. Mean changes from baseline in LS Z-scores at nine months were 0.33 (0.10, 0.55) and 0.06 (-0.22, 0.34), respectively. Following an additional 15 months of treatment, mean change in LS Z-scores improved to 0.64 (0.22, 1.06) for patients initially treated with VPRIV and improved to 0.54 (0.21, 0.87) for patients who switched to VPRIV from Cerezyme at nine months.
Id.
Shire HGT posted the press release in an investor news section on Shire pic’s webpage. VC ¶ 17, Cotrone Decl. ¶ 3. Shire HGT distributed the press release to
On July 9, 2012, Genzyme wrote to Shire HGT outlining what it believed were methodological weaknesses in the data analysis reported in the press release. Genzyme demanded that Shire HGT retract the press release and the comparative claims promoting VPRIV as superior to Cerezyme. Id. ¶ 38-39. On July 23, 2012, Shire HGT informed Genzyme that it would not comply. Id. ¶ 41. Genzyme responded by filing this lawsuit on July 30, 2012. In its Verified Complaint, Genzyme alleges that the Shire HGT press release violated the false advertising prohibition of the Lanham Act. In limning the elements of the prohibition, Genzyme alleged that the press release was “directed at least to patients suffering from Type 1 Gaucher disease who require enzyme replacement therapy and to healthcare professionals who may treat Type 1 Gaucher patients,” id. ¶ 45; that it “contain[ed] false and misleading claims about the nature of the clinical trials and retrospective analysis conducted on BMD [ (bone mass density) ] data ... [and] false and misleading claims about the comparative capabilities of VPRIV and Cerezyme for improving BMD in Type 1 Gaucher patients,” id. ¶ 29, see also id. ¶¶ 28-34; and that it “likely [has] materially influenced and likely will materially influence purchasing decisions in part because ... customers ... are led to believe incorrectly that the analysis described in the Shire Press Release demonstrated that VPRIV improves BMD better than Cerezyme....” Id. ¶ 47.
SHIRE HGT’S 12(b)(6) MOTION
To survive a motion to dismiss brought pursuant to Rule 12(b)(6), the factual allegations of the complaint must “possess enough heft” to set forth “a plausible entitlement to relief.” Bell Atl. Corp. v. Twombly,
“Dismissal for failure to state a claim is appropriate if the complaint fails to set forth factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.” Gagliardi v. Sullivan,
(1) the defendant made a false or misleading description of fact or representation of fact in a commercial advertisement about his own or another’s product; (2) the misrepresentation is material, in that it is likely to influence the purchasing decision; (3) the misrepresentation actually deceives or has the tendency to deceive a substantial segment of its audience; (4) the defendant placed the false or misleading statement in interstate commеrce; and (5) the plaintiff has been or is likely tobe injured as a result of the misrepresentation, either by direct diversion of sales or by a lessening of goodwill associated with its products.
Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave.,
In support of its motion to dismiss, Shire HGT first argues that Genzyme’s Verified Complaint fails as a matter of law because the press release did not amount to commercial advertising or promotion. To qualify as a commercial advertisement, “a representation must (a) constitute commercial speech (b) madе with the intent of influencing potential customers to purchase the speaker’s goods or services (c) by a speaker who is a competitor of the plaintiff in some line of trade or commerce and (d) disseminated to the consuming public in such a way as to constitute ‘advertising’ or ‘promotion.’ ” Podiatrist Ass’n, Inc. v. La Cruz Azul De Puerto Rico, Inc.,
[t]here is no way Shire could have fairly or accurately reported the results of its research on VPRIV and Cerezyme without identifying the products at issue. Thus, any commercial elements of the press release were “inextricably intertwined” with protected, noncommercial scientific expression, requiring treatment of the entire press release as “fully protected expression.”
Shire HGT Mem. at 11.
Genzyme agrees that scientific research is protected by the First Amendment, but argues that its secondary dissemination can constitute commercial speech if it is given a pecuniary gloss. See Washington Legal Found v. Friedman,
For any given off-label prescription drug treatment, there may be a wide variety of scientific research data available, some of which concludes that the off-label treatment is effective, some of which concludes that the treatment is not. [However], manufacturers will likely only seek to disseminate information that presents their product in a favorable light. That fact, combined with the considerable financial resources-available to pharmaceutical companies, means that findings concluding that a drug effectively treats a condition is more likely to reach a physician than studies reaching the opposite conclusion. Therefore, physicians сould be led to believe that a certain drug is safe and effective because a manufacturer has found, and aggressively promoted, “the one” article that supports use of their drug, even if there exists considerable evidence to-the contrary. The potential to mislead, and the harm that could result, convinces this court that it is permissible to “depart from the rigorous review that the First Amendment generally demands.”
Id. at 65.
In Gordon & Breach Sci. Publ’rs S.A. v. Am. Inst. of Physics,
The situation is similar to that of a restaurant or movie review or a Consumer Reports product report. While the restaurant review- or product report itself constitutes exactly the type of “consumer or editorial comment” that “raise[s] free speeсh concerns” and which Congress explicitly intended to exclude from [the Lanham Actj’s scope, ... a restaurant clearly engages in commercial speech when it posts the New York Times review in its- window, and General Motors engages in commercial speech when it announces in a television commercial that its car was ranked first by Consumer Reports. The Consumer Reports article, of course, does not somehow become commercial speech; rather, G.M.’s use of the- article is commercial speech. Cоnsequently, G.M. may be sued under the Lanham Act, and Consumer Reports’ testing methodology may become subject to judicial scrutiny to determine whether G.M. “use[d] in commerce” a “false or misleading representation of fact.” We do not reach a different conclusion here merely because the secondary user of the articles is the same entity that published them in the first place.
Id. at 1544-1545.
The reasoning underlying the holdings of WLF and Gordon & Breach has been found to apply in contexts similar to this one. In Bracco Diagnostics, Inc. v. Amersham Health, Inc.,
Shire HGT’s fallback argument is that even if the press release constituted commercial speech, Genzyme’s Verified Complaint fails to allege that it contained literally false statements, impliedly false or misleading statements, or embellished claims, because the press release accurately reported the underlying scientific analysis and results. Unless the complained of speech is such that “a court can properly say that nо reasonable person could be misled by the advertisement in question,” Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc.,
Shire HGT finally argues that Genzyme has failed to sufficiently allege the necessary element of consumer deception because the physicians who prescribe Gaucher disease treatments аre sophisticated experts who are not easily misled. However, as the court noted in WLF, a pharmaceutical manufacturer’s selective promotion of favorable scientific information could be potentially misleading even to sophisticated and experienced doctors. WLF,
SHIRE PLC’S 12(b)(2) MOTION
As plaintiff, Genzyme ultimatеly bears the burden of persuading the court that in personam jurisdiction exists over Shire plc. See Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass’n,
Genzyme does not seriously assert that the court has general personal jurisdiction over Shire pic.
[f]irst, the claim underlying the litigation must directly arise out of, or relate to, the defendant’s forum-state activities. Second, the defendant’s in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state’s laws and making the defendant’s involuntary presence before the state’s courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.
Pleasant St.,
The lynehpin of this test is the second elеment — purposeful availment. Genzyme argues that Shire pic purposefully availed itself of the privilege of conducting business in Massachusetts because “Shire [pic] took actions to create the Shire Press Release and make it available on its website,” thereby targeting and harming Genzyme, a Massachusetts company. Genzyme Opp’n at 9. “Second, Shire [pic] has entered into an exclusive agreement with Shire HGT to sell VPRIV
Neither allegation withstands scrutiny. First, it is uncontradicted that Shire HGT, and not Shire pic, created the press release and was responsible for its publication on the Shire pic website.
The final arrow in Genzyme’s quiver is the argument that, even in the absence of direct specific jurisdiction, the court should impute Shire HGT’s actions to Shire pic, and treat Shire pic as the alter-ego of Shire HGT for jurisdictional purposes. To overcome the presumption of separate corporate identity and assert personal jurisdiction over a parent corporation based on its subsidiary’s forum contacts, there must be a “plus” factor “beyond the subsidiary’s mere presence within the bosom of the corporаte family.”' Donatelli v. Nat’l Hockey League,
Anticipating this finding, Genzyme requests the opportunity to take discovery to bolster its claim for personal jurisdiction over Shire pic. The court has the discretion to permit limited jurisdictional discovery where a plaintiff has made out a “colorable case” for the existence of personal jurisdiction and has “presented] facts to the court which show why jurisdiction would be found if discovery were permitted.” Negroru-Torres,
ORDER
For the foregoing reasons, Shire HGT’s motion to dismiss for failure to state a claim for which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(6) is DENIED. Shire pic’s motion to dismiss for lack of
SO ORDERED.
Notes
. For purposes of evaluating personal jurisdiction, the court may consider "facts put forward by the defendants, to the extent that they are uncontradicted.” Negron-Torres v. Verizon Commc'ns, Inc.,
. The data was presented at the European Working Group on Gaucher Disease (EWGGD) meeting held in Paris, France, June 28-30, 2012.
. Genzyme also alleges that (1) rather than being "new,” the data reported by Shire HGT’s press was release collected in clinical trials in 2008-2009, VC ¶ 31; (2) despite stating that BMD was an exploratory end point of the reported clinical trials, the press release gives the misleading overall impression that the clinical trials were designed to test VPRIV and Cerezyme’s efficacy vis-á-vis BMD, VC ¶ 32; and (3) the underlying clinical trials and analysis suffered from a variety of undisclosed methodological defects that biased or failed to support the results. VC ¶ 33-34. Cf. Gordon & Breach,
. As will be seen, Shire pic’s only contact with this forum — guaranteeing certain of Shire HGT’s leases of real property in Massachusetts, Stewart Decl. ¶ 7 — would not rise to the level of " ‘continuous and systematic general business contacts’ ” between Shire pic and Massachusetts. United States v. Swiss Am. Bank, Ltd.,
. A federal court may only exercise personal jurisdiction in Massachusetts consistent with the Massachusetts Long-Arm Statute and within the constitutional limits of due process. Pleasant St.,
. That Shire HGT's press release identified Shire pic and its stock trading symbols is not unusual given that Shire pic is Shire HGT's ultimate corporate parent.
