SKLAR v. AMARIN CORPORATION PLC et al
OPINION filed. Signed by Judge Freda L. Wolfson on 6/26/2015. (kas, )
*NOT FOR PUBLICATION*
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
IN RE AMARIN CORP. PLC., SECURITIES
Civil Action No. 13-cv-6663 (FLW)(TJB)
WOLFSON, U.S. DISTRICT JUDGE:
Presently before the Court is a motion to dismiss the Consolidated Amended Class Action
Complaint (“CAC”) filed by Lead Plaintiff James L. Reiss (“Plaintiff”) against Amarin Corp.,
PLC (“Amarin”), Joseph S. Zakrzewski (“Zakrzewski”), John F. Thero (“Thero”), and Steven
Ketchum (“Ketchum”) (Zakrzewski, Thero, and Ketchum known collectively as “the Individual
Defendants”) (Amarin and the Individual Defendants known collectively as “Defendants”).
Plaintiff’s lawsuit stems from alleged misrepresentations Defendants made about the progress of
Amarin’s ultimately unsuccessful application to the FDA to approve its drug Vascepa for the
treatment of patients with high triglyceride levels. Also before the Court is Plaintiff’s motion to
strike certain references made in Defendants’ reply brief to a document known as the Special
Protocol Assessment (“SPA”).
For the following reasons, Defendants’ motion to dismiss is granted and Plaintiff’s motion to
strike is denied. Plaintiff’s Complaint is dismissed without prejudice. Plaintiff is given thirty
days to re-file his Complaint.
The following allegations are taken as true for the purposes of this motion. Amarin is a
biopharmaceutical company focused on the commercialization and development of therapeutics
to improve cardiovascular health. CAC ¶ 41. Vascepa is Amarin’s primary product offering and,
according to Amarin’s SEC filings, “is an ultra-pure, EPA [ethyl eicosapentaenoic acid]-only
omega-3 fatty acid product” for the treatment of patients with very high and high triglycerides.
CAC ¶ 52. During the period from November 29, 2010 through October 16, 2013 (the “Class
Period”), Amarin sought FDA approval to market Vascepa, based on a 12-week Phase III
registration trial (the “ANCHOR study”), to treat patients with high trigylceride levels (“TGs”)
when co-administered with a statin1 (a treatment purpose known as the “ANCHOR indication”).
CAC ¶¶ 7, 64. According to Plaintiff, “Amarin’s only prospect for profitability during the Class
Period was the approval of Vascepa for the ANCHOR indication.”2 CAC ¶ 8. During the Class
Period, defendants estimated that the potential patient population for the ANCHOR indication
was 36 million patients.3 Id. In support of this indication, during 2009–2010, Amarin conducted
the ANCHOR study, which was a twelve-week, Phase III clinical trial that enrolled 702 patients,
“to determine if administration of Vascepa to the patient population already optimized on statin
therapy reduced TGs.” CAC ¶¶ 11, 14.
In July 2008, senior officers of Amarin met with the FDA for the purpose of discussing the
ANCHOR study for testing of Vascepa. CAC ¶ 12. Plaintiff alleges that “[a]t that meeting, the
FDA expressed reservations to Amarin about approving Vascepa based only on the 12-week
According to Plaintiff, “[s]tatins are a class of drugs that work in the liver to prevent the
formation of LDL (bad) cholesterol, thus lowering the amount of cholesterol circulating in the
blood.” CAC at viii.
However, Plaintiff does indicate that on July 12, 2012, Vascepa was approved by the FDA
for the MARINE indication. CAC at viii. According to Plaintiff, “[u]nlike ANCHOR, the
MARINE indication was intended to treat a much smaller and sicker patient population and to
treat a different disease (pancreatitis rather than heart disease).” CAC ¶ 71.
Amarin’s ANCHOR study was based on a hypothesis that reducing TGs in patients, when
co-administered with a statin, would lead to a statistically significant reduction in major adverse
cardiac events (“MACE”). CAC ¶ 10.
ANCHOR trial, and in the absence of the completion of a long-term outcomes study that tested
the reduction of MACE (major adverse cardiovascular events).”4 CAC ¶ 13. Plaintiff alleges that
the FDA advised Amarin at that meeting that two long-term outcomes studies, the ACCORDLipid and AIM-HIGH studies, were ongoing and were expected to test the hypothesis that
reducing TGs would lead to fewer MACE. The FDA advised Amarin that it could proceed with
the ANCHOR study, but that if the ACCORD and AIM-HIGH outcomes studies (which were
then underway) failed to demonstrate a survival benefit, the FDA would be less likely to approve
Vascepa based only on the ANCHOR trial. CAC ¶ 14. Plaintiff further alleges that the FDA’s
reservations with respect to approving Vascepa for the ANCHOR indication based only on a 12week trial were reflected in written minutes of that meeting created by the FDA and provided to
Amarin. CAC ¶ 15. Plaintiff also alleges that Amarin’s future profitability at the time of that
meeting was dependent on obtaining FDA approval to market Vascepa based on the ANCHOR
study without first being required to conduct a long-term outcomes study.
Specifically, Plaintiff alleges that according to the FDA’s October 11, 2013 Briefing
Document, the FDA informed Amarin in July 2008 as follows:
During a pre-IND meeting with the applicant in July 2008 . . . the Division noted that
there was a lack of prospective, controlled clinical trial data demonstrating that
pharmaceutical reduction of non-HDL-C (or TG) with a second drug, in patients with
elevated TG Levels at LDL goal on statin therapy, significantly reduces residual
cardiovascular risk. The Division referenced trials ongoing at the time (e.g., AIMHIGH, ACCORD-Lipid) that, while not able to assess the effect of specifically
lowering non-HDL-C (or TG) on clinical outcomes, would be expected to provide
important information on the incremental benefit of adding a second lipid-active drug
to statin therapy. It was stated that before an indication would be entertained for
Ethyl-EPA as add-on to statin therapy in patients with elevated TG levels, the
applicant at a minimum would have to provide results from a 12-week study with
lipid endpoints as well as initiate an appropriately designed cardiovascular outcomes
CAC ¶ 13.
Both the ACCORD-Lipid and AIM-HIGH studies proved unsuccessful, with the test results
for ACCORD-Lipid announced in March 2010, and the discontinuation of AIM-HIGH
announced in May 2011. CAC ¶ 17. Plaintiff alleges that, “[n]otwithstanding Defendants’ actual
knowledge, initially, that the success of the ANCHOR trial was dependent on the success of the
ACCORD-Lipid and AIM-HIGH trials, and subsequently, that the ACCORD-Lipid and AIMHIGH trials had been unsuccessful, defendants intentionally failed to inform investors of the
connections drawn by the FDA among the three studies.” CAC ¶ 18. Rather, Plaintiff alleges that
“Defendants misrepresented facts with respect to the likelihood of obtaining FDA approval for
the ANCHOR indication without REDUCE-IT,” Amarin’s own long-term prospective
cardiovascular outcomes study in high-risk patients on statin therapy that was not initiated until
November 2011. CAC ¶ 19; CAC at viii.
According to Plaintiff, these misrepresentations were made “to induce Class Members to
make in excess of $226 million of investments in Amarin securities through two secondary
offerings – on January 6, 2011 – 13.8 million ADS at $7.60 per ADS, and on July 10, 2013 –
21.7 million ADS at $5.60 per ADS.” CAC ¶ 19. Plaintiff additionally alleges that “Defendants
were motivated to commit the fraud because they knew that Amarin was required to raise cash in
public offerings to conduct the long-term REDUCE-IT study and that investors would be
unwilling to buy Amarin ADSs in these public offerings if they knew that Amarin would be
required to conduct the long-term REDUCE-IT study at an expense in excess of $100 million to
get FDA approval.” CAC ¶ 20. Further, “[t]he long-term REDUCE-IT study introduced an
element of cost, risk, and delay that would have been unacceptable to public investors.” CAC ¶
21. Plaintiff alleges that “Defendants misrepresented facts with respect to the likelihood of
obtaining FDA approval for the ANCHOR indication without REDUCE-IT to induce Class
Members to make in excess of $260 million of investments in Amarin securities through two
secondary offerings – on January 6, 2011 – 13.8 million ADS at $7.60 per ADS, and on July 10,
2013 – 21.7 million ADS at $5.60 per ADS.” CAC ¶ 22.
Plaintiff also alleges that Defendants “misrepresented facts concerning the [Japan
Eicosapentaenoic acid (EPA) Lipid Intervention Study (“JELIS”)] . . . study conducted in Japan .
. . .” CAC ¶ 24. According to Plaintiff, the JELIS study, in which investigators “concluded that
JELIS showed that the addition of EPA [very similar to the active ingredient in Vascepa, ethylEPA] to statin therapy provides additional benefit in preventing major coronary events,” differed
in two material ways from the ANCHOR study. CAC ¶¶ 120–25. However, Plaintiff alleges that
Defendants held out the two studies as equivalent in their public statements to falsely indicate the
efficacy of Vascepa for the ANCHOR indication. CAC ¶ 146(ii). Further, Plaintiff alleges that
Defendants misrepresented “facts concerning . . . the use of mineral oil as a placebo in the
ANCHOR study.” CAC ¶ 24. Specifically, Plaintiff alleges that Defendants did not express
concerns raised by Plaintiff’s Confidential Witness A (“CWA”) and the FDA about the viability
of mineral oil as a placebo for the ANCHOR trial, because the mineral oil “may not be inert.”
CAC ¶¶ 72–85, 146(iii). Plaintiff asserts that due to these misrepresentations, “and unbeknownst
to the investing public, Amarin securities traded at materially inflated prices throughout the Class
Period.” CAC ¶ 24.
On October 11, 2013, the FDA released its briefing document for the Endocrinologic and
Metabolic Drugs Advisory Committee (“AdCom”) meeting scheduled for October 16, 2013 (“the
Briefing Document”). CAC ¶ 26. According to Plaintiff, the Briefing Document revealed that
“Amarin had been informed by the FDA in July 2008 that the FDA’s willingness to approve
Vascepa for use by a 36 million patient population based only on a 12-week trial, was dependent
on the ACCORD and AIM-HIGH test results, and further that those test results had been
unsuccessful.” CAC ¶ 27. Plaintiff also asserts that “the Briefing Document called into question
whether Vascepa offered any meaningful clinical benefit to patients with high triglyceride
levels.” CAC ¶ 28. Upon the release of the Briefing Document, Amarin’s shares declined by
$1.28 per share – from $6.37 to $5.09 – over 20% -- on volume of over 37.9 million shares. CAC
¶ 29. On October 16, 2013, the AdCom voted 9 to 2 against approval of Vascepa for the
ANCHOR indication citing, among other matters, concerns regarding the failure of recent
cardiovascular outcomes trials (including ACCORD-Lipid and AIM-HIGH) to demonstrate
meaningful cardiovascular benefit from reduction in triglyceride levels. CAC ¶ 30. Plaintiff
asserts that “[o]n this news, Amarin shares declined an additional $3.16 per share–over 61% on
volume of over 105.6 million shares.” CAC ¶ 31. Plaintiff further asserts that “Individual
Defendants, and other senior Amarin executives, with knowledge of the undisclosed facts,
exercised stock options and sold Amarin ADSs to unsuspecting investors on the open market,
garnering unlawful profits of excess of $15 million.” CAC ¶ 32.
On November 1, 2013, Plaintiff filed this lawsuit. Plaintiff alleges in Count One of the CAC
that Defendants’ actions amounted to securities fraud and a violation of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder (“Rule 10b-5”). In
Count Two, Plaintiff asserts a claim pursuant to Section 20(a) of the Exchange Act against the
Individual Defendants. On July 29, 2014, the Court consolidated the various securities actions
against Amarin into this single case and appointed Plaintiff as Lead Plaintiff. Thereafter,
Defendants moved to dismiss the CAC. Specifically, Defendants assert that Plaintiff’s claims
must fail because (1) Plaintiff has not alleged that Defendants made a false statement or omission
and (2) Plaintiff fails to allege particularized facts giving rise to a strong inference that the
individual defendants acted with scienter.5
On March 12, 2015, Plaintiff moved to strike portions of Defendants’ reply brief in support
of Defendants’ motion to dismiss, arguing that Defendants’ references to the special protocol
assessment (“SPA”) governing the ANCHOR trial “that are outside plaintiff’s Class Action
Complaint and unsupported by the factual record” should be stricken. Pl.’s Mot. to Strike at 2.
Plaintiff indicates that the SPA “is a written agreement between the Company, as the trial’s
sponsor, and the FDA regarding the design, endpoints, and planned statistical analysis of the
Phase 3 [ANCHOR] trial.” CAC ¶ 130. Plaintiff argues that Defendants’ references to the SPA
are inappropriate because “without the actual SPA, amendments to the SPA, and the text of
communications between the FDA and Amarin, including minutes of those communications, the
public record is ambiguous whether the SPA concerned the criteria for filing of the NDA [new
drug application] or whether it concerned the criteria for approval of the NDA.” Id. at 6.
Whether to grant a motion to strike is within the district court’s sound discretion. McElroy v.
Sands Casino, 593 Fed. App’x 113, 116 (3d Cir. 2014) (citing Meditz v. City of Newark, 658
F.3d 364, 367 n.1 (3d Cir. 2011)).
As a threshold matter, motions to strike are brought in federal court pursuant to Rule 12(f) of
the Federal Rules of Civil Procedure. FED. R. CIV. P. 12(f). Rule 12(f) states in relevant part that
“[t] he court may strike from a pleading an insufficient defense or any redundant, immaterial,
impertinent, or scandalous matter.” Id. (emphasis added).
Here, the Court denies Plaintiff’s motion, because Plaintiff does not move to strike any
statements from a pleading; rather, Plaintiff seeks to strike statements made in a reply brief. See,
e.g., In re Schering-Plough Corp./Enhance Sec. Litig., No. 08-CV-397 (DMC), 2009 WL
1410961, at *2 (D.N.J. May 19, 2009); cf. United States v. Coney, 689 F.3d 365, 379 & n.5 (5th
Cir. 2012); 5C CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 1380 &
n.8.50 (3d ed. 2012) (“Rule 12(f) motions only may be directed towards pleadings as defined by
Rule 7(a); thus motions, affidavits, briefs, and other documents outside of the pleadings are not
subject to Rule 12(f).”); see also FED. R. CIV. P. 7(a).
In the alternative, Plaintiff argues that in the event that Defendants attached the SPA in their
opposition brief, “the Court ‘must’ convert the motion to a motion for summary judgment
pursuant to Fed. R. Civ. P. 12(d) and allow Plaintiff plenary discovery.” Pl.’s Br. at 9. However,
Defendants did not provide the SPA to the Court; thus, Plaintiff’s alternative request is denied as
Finally, I note that Defendants’ reply brief does not materially rely on the substance of the
SPA. Rather, Defendants make limited references to the SPA, mostly to argue that Plaintiff
failed to allege that the SPA stated that the success of the ACCORD, AIM-HIGH and
IMPROVE-IT studies was a condition to approving the ANCHOR indication. Defs.’ Reply Br. at
5–6. Given the several substantive references to the SPA that Plaintiff himself makes in his
Complaint, see CAC ¶¶ 69, 79, 99, 129, 130, 143, 194, 198, 199, 211–13, 215, 233, 249, 260,
262, 282, 286, 322, the Court does not find Defendants’ references to the SPA to be
inappropriate on its face. In any event, the Court will of course examine Defendants’ arguments
under the Rule 12(b)(6) standard discussed infra, which assumes Plaintiff’s factually supported
allegations to be true unless explicitly contradicted in documents which (1) are integral to, or
Standard of Review
When reviewing a motion to dismiss on the pleadings, courts “accept all factual allegations
as true, construe the [complaint] in the light most favorable to the plaintiff, and determine
whether, under any reasonable reading of the [complaint], the plaintiff may be entitled to relief.”6
Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citation and quotations
omitted). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court clarified
the Rule 12(b)(6) standard: the factual allegations set forth in a complaint “must be enough to
raise a right to relief above the speculative level.” Id. at 555. As the Third Circuit has stated,
“[t]he Supreme Court's Twombly formulation of the pleading standard can be summed up thus:
‘stating ... [a] claim requires a complaint with enough factual matter (taken as true) to suggest’
the required element. This ‘does not impose a probability requirement at the pleading stage,’ but
instead ‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal
evidence of’ the necessary element.” Phillips, 515 F.3d at 234 (quoting Twombly, 127 U.S. at
555); see also Covington v. Int'l Ass'n of Approved Basketball Officials, 710 F.3d 114, 118 (3d
Cir. 2013) (“[A] claimant does not have to set out in detail the facts upon which he bases his
claim. The pleading standard is not akin to a probability requirement; to survive a motion to
dismiss, a complaint merely has to state a plausible claim for relief.” (citations omitted)).
relied upon, in Plaintiff’s Complaint and (2) publicly available, attached to the parties’ moving
briefs, or indisputably authentic. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426
(3d Cir. 1997); Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (Courts may consider
"exhibits attached to the complaint, matters of public record, [or] undisputedly authentic
documents if the complainant's claims are based upon these documents.”); see also, e.g.,
Cichonke v. Bristol Twp., No. CIV.A. 14-4243, 2015 WL 1345439, at *7 (E.D. Pa. Mar. 25,
Though Defendants did not attach the SPA to their briefs, they do attach 27 other exhibits.
The Court will only consider, when relevant, the attached documents that are integral to, or relied
upon, in Plaintiff’s Complaint and will note when it does so. In re Burlington Coat Factory, 114
F.3d at 1426.
In affirming that Twombly’s standards apply to all motions to dismiss, the Supreme Court
explained several principles. First, “the tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). Second, “only a complaint that states a plausible claim for relief survives a motion to
dismiss.” Id. at 679. Therefore, “a court considering a motion to dismiss can choose to begin by
identifying pleadings that, because they are no more than conclusions, are not entitled to the
assumption of truth.” Id. Ultimately, “a complaint must do more than allege the plaintiff's
entitlement to relief. A complaint has to ‘show’ such an entitlement with its facts.” Fowler v. U
PMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009). However, “a district court ruling on a motion
to dismiss may not consider matters extraneous to the pleadings . . . [although a] limited
exception exists for documents that are integral to or explicitly relied upon in the [complaint].”
W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 97 n.6 (3d Cir. 2010) cert. denied,
132 S.Ct. 98 (2011) (citation and internal quotation marks omitted).
The Third Circuit has reiterated that “judging the sufficiency of a pleading is a contextdependent exercise” and “[s]ome claims require more factual explication than others to state a
plausible claim for relief.” Id. at 98. That said, the Rule 8 pleading standard is applied “with the
same level of rigor in all civil actions.” Id. (quoting Iqbal, 556 U.S. at 684).
“Independent of the standard applicable to Rule 12(b)(6) motions,” Rule 9(b) of the Federal
Rules of Civil Procedure requires a heightened pleading standard for claims sounding in fraud or
mistake. In re Rockefeller Ctr. Properties, Inc. Sec. Litig., 311 F.3d 198, 216 (3d Cir. 2002); see
also FED. R. CIV. P. 9(b) (“In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a
person's mind may be alleged generally.”).
In addition to Rule 9(b)’s heightened pleading requirements, Congress enacted the Private
Securities Litigation Reform Act of 1995 (“PSLRA”) 15 U.S.C § 78u et seq. to require an even
higher pleading standard for plaintiffs bringing private securities fraud actions. In re Suprema
Specialties, Inc. Sec. Litig., 438 F.3d 256, 276 (3d Cir. 2006). The purpose of requiring
particularized pleadings is to prevent abusive securities litigations. See Tellabs, Inc. v. Makor
Issues & Rights, Ltd., 551 U.S. 308, 313 (2007) (“Private securities fraud actions . . . if not
adequately contained, can be employed abusively to impose substantial costs on companies and
individuals whose conduct conforms to the law”); Merrill Lynch, Pierce, Fenner & Smith Inc. v.
Dabit, 547 U.S. 71, 81 (2006) (identifying “ways in which the class-action device was being
used to injure the entire U.S. economy” and listing examples such as “nuisance filings, targeting
of deep-pocket defendants, vexatious discovery requests, and manipulation by class action
lawyers of the clients whom they purportedly represent . . . ”) (internal quotes and citations
The PSLRA provides two distinct pleading requirements, both of which must be met in order
for a complaint to survive a motion to dismiss. Institutional Investors Group v. Avaya, Inc., 564
F.3d 242, 252 (3d Cir. 2009). First, under 15 U.S.C. § 78u–4(b)(1), the complaint must “specify
each allegedly misleading statement, why the statement was misleading, and, if an allegation is
made on information and belief, all facts supporting that belief with particularity.” Winer Family
Trust v. Queen, 503 F.3d 319, 326 (3d Cir. 2007) (construing 15 U.S.C. § 78u–4(b)(1)). Second,
the complaint must, “with respect to each act or omission alleged to violate this chapter, state
with particularity facts giving rise to a strong inference that the defendant acted with the required
state of mind.” 15 U.S.C. § 78u–4(b)(2).7
The PSLRA states, in pertinent part:
Both provisions of the PSLRA require facts to be pled with “particularity.” Avaya, 564 F.3d
at 253. This particularity language “echoes precisely FED. R. CIV. P. 9(b).” In re Advanta Corp.
Sec. Litig., 180 F.3d 525, 534 (3d Cir. 1999); see FED. R. CIV. P. 9(b) (“[A] party must state with
particularity the circumstances constituting fraud or mistake.”). Indeed, although the PSLRA
replaced Rule 9(b) as the pleading standard governing private securities class actions, Rule 9(b)'s
particularity requirement “is comparable to and effectively subsumed by the requirements of [§
78u–4(b)(1) of] the PSLRA.” Avaya, 564 F.3d at 253 (citations omitted). This standard “requires
plaintiffs to plead the who, what, when, where and how: the first paragraph of any newspaper
story.” Advanta, 180 F.3d at 534 (internal quotation marks omitted).
Defendants argue that Plaintiff fails to state a claim for securities fraud because Plaintiff does
not sufficiently allege that Defendants (1) made a materially false statement or omission or (2)
acted with scienter. “To state a claim under Section 10(b) of the Exchange Act and SEC Rule
10b–5, the plaintiff must prove: ‘(1) a material misrepresentation or omission by the defendant;
(b) Requirements for securities fraud actions
(1) Misleading statements and omissions
In any private action arising under this chapter in which the plaintiff alleges that the defendant(A) made an untrue statement of a material fact; or
(B) omitted to state a material fact necessary in order to make the statements
made, in the light of the circumstances in which they were made, not misleading; the
complaint shall specify each statement alleged to have been misleading, the reason or
reasons why the statement is misleading, and, if an allegation regarding the statement or
omission is made on information and belief, the complaint shall state with particularity all
facts on which that belief is formed.
(2) Required state of mind
In any private action arising under this chapter in which the plaintiff may recover money
damages only on proof that the defendant acted with a particular state of mind, the complaint
shall, with respect to each act or omission alleged to violate this chapter, state with particularity
facts giving rise to a strong inference that the defendant acted with the required state of mind.
15 U.S.C.A. § 78u–4(b)(1), (2).
(2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale
of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss
causation.’” Universal Am. Corp. v. Partners Healthcare Solutions Holdings, L.P., 61 F. Supp.
3d 391, 395 (D. Del. 2014) (quoting Amgen Inc. v. Conn. Ret. Plans & Trust Funds, ––– U.S. ––
––, 133 S.Ct. 1184, 1191–92 (2013)).
a. Whether Plaintiff Has Alleged that Defendants Made a False Statement or
Defendants argue that Plaintiff has failed to allege that Defendants made a materially false
statement or omission. The CAC asserts that Defendants made three sets of false statements or
omissions, and the Court will examine each set in turn.
1. First Set of Statements – Importance of the ACCORD and AIM-HIM Studies
First, Plaintiff asserts that “on no fewer than nine occasions, 8 Defendants misrepresented that
The nine statements at issue in the first set of allegedly false statements or omissions are as
follows. The first three statements pre-date the Class Period.
(1) On September 11, 2009, Amarin held a conference call in which it stated, “And we’re
also in discussion with the FDA about – over the long-term this is not required for
approval, but a CV outcome study to demonstrate the reduction in cardiovascular risk.”
CAC ¶ 127 n.10.
(2) On May 13, 2010, Amarin issued a press release stating, in relevant part, that “[t]he
results of an outcome study are not required for FDA approval of the broader indication.”
CAC ¶ 127 n.10.
(3) On August 10, 2010, Amarin issued a press release stating, in relevant part, that
“[o]utcomes study are not required for FDA approval of this broader [ANCHOR]
indication for VASCEPA.” CAC ¶ 127 n.10.
(4) On January 6, 2011 Amarin issued a Prospectus Supplement on Form 424B5 for an
offering of 12 million American Depositary Shares at a price to the public of $7.60 per
ADS which stated in relevant part:
In order to obtain a separate indication for Vascepa based on the ANCHOR trial
results, the Food and Drug Administration, or FDA, requires that we have a
clinical “outcomes study” substantially underway at the time of filing a New Drug
Application, or NDA. If we elect to seek this separate indication in our initial
NDA filing and commence an outcomes study, we will need to seek additional
financing, through a commercial partner or otherwise. The results of an outcomes
study are not required for FDA approval of the broader indication, and an
outcomes study is not required for the indication being studied in the MARINE
CAC ¶ 158.
(5) “On March 16, 2011, Amarin filed its Form 10-K for the period ending December 31,
2010. CAC ¶ 162. The Form 10-K stated, ‘[i]n order to obtain a separate indication for
Vascepa based on the ANCHOR trial results, the FDA requires that we have a clinical
outcomes study substantially underway at the time of the NDA filing. The results of an
outcomes study are not required for FDA approval of the broader indication.’” CAC ¶
163. “In further describing the ANCHOR trial, the Form 10-K reiterated, ‘[i]n order to
seek approval of this potentially expanded indication, we will be required to have
substantially enrolled subjects in a medical outcomes study at the time of our NDA
submission. We are in the process of defining the clinical trial design for the outcomes
study. We do not anticipate initiating the outcomes study until after the ANCHOR trial is
complete. The results of this outcomes study are not required for approval of the
indication studied in the ANCHOR trial; the only requirement is that the outcomes study
is substantially underway.’” CAC ¶ 164.
(6) “On April 18, 2011, prior to the opening of the U.S. securities markets, Amarin released
results from the ANCHOR trial . . . .” CAC ¶ 171. “The April 18, 2011 press release
contained the . . . statement that ‘the results of an outcomes study are not required for
FDA approval of the broader [ANCHOR] indication . . . .’” CAC ¶ 174.
(7) “During the First Quarter 2011 earnings call, Zakrzewski . . . went on to discuss plans for
submitting the MARINE NDA and referenced ANCHOR stating that “[a]n outcomes
study must be substantially enrolled, but results are not required in order to secure
approval of an indication based on the ANCHOR trial results.” CAC ¶ 186–87.
(8) On February 29, 2012, Amarin filed its Annual Report on Form 10-K for year ended
December 31, 2011. The company stated that “[b]ased upon feedback from the FDA and
in accordance with the SPA for the ANCHOR study, we do not believe that the results of
the REDUCE-IT outcomes study are required for approval of the indication studied in the
ANCHOR trial.” CAC ¶ 213 (internal quotation marks omitted).
(9) “In its Form 10-K for fiscal 2012, filed with the SEC on February 28, 2013, Amarin
reiterated its prior misrepresentations and omissions with respect to the ANCHOR study.
The Form 10-K stated that:
the long-term REDUCE-IT study was not required to be completed for FDA approval of the
ANCHOR indication, when Defendants knew that such a study was likely to be required, per
Amarin’s July 2008 meeting with the FDA9 in which the FDA indicated that the outcomes of the
Based on communications with the FDA, we believe that we are required to be
“substantially underway” with a cardiovascular outcomes study at the time of the
submission of our sNDA [supplemental new drug application] seeking approval
of the ANCHOR indication. We believe that we achieved this requirement prior
to submitting the sNDA. However, there can be no assurance that the FDA will
agree with our assessment or that they will accept our sNDA for the ANCHOR
indication. We do not believe the final results of the REDUCE-IT study will be
required for FDA approval of Vascepa for the ANCHOR indication.
CAC ¶ 261.
Plaintiff filed his complaint by relying on the FDA’s October 16, 2013 Briefing Document,
which was prepared in advance of the Endocronolic and Metabolic Drugs Advisory Committee
Meeting at which the FDA brought the supplemental application for Vascepa to the Advisory
Committee. The Briefing Document was made publicly available in October 2013. The Briefing
Document stated, in relevant part, that
During a pre-IND meeting with the applicant in July 2008 . . . the Division noted
that there was a lack of prospective, controlled clinical trial data demonstrating that
pharmacological reduction of non-HDL-C (or TG) with a second drug, in patients
with elevated TG levels at LDL goal on statin therapy, significantly reduces residual
cardiovascular risk. The Division referenced trials ongoing at the time (e.g., AIMHIGH, ACCORD-Lipid) that, while not able to assess the effect of specifically
lowering non-HDL-C (or TG) on clinical outcomes, would be expected to provide
important information on the incremental benefit of adding a second lipid-active drug
to statin therapy. It was stated that before an indication would be entertained for
Ethyl-EPA as add-on to statin therapy in patients with elevated TG levels, the
applicant at a minimum would have to provide results from a 12-week study with
lipid endpoints as well as initiate an appropriately designed cardiovascular outcomes
study. This outcomes study, known as REDUCE-IT, is ongoing and is investigating
whether the addition of AMR1014 g daily ameliorates residual cardiovascular risk
among patients at high CV risk who have moderate hypertriglyceridemia at LDL-C
goal on statin therapy. The study designs for both ANCHOR and REDUCE-IT were
agreed to by the Division under special protocol assessments.
CAC ¶ 13; see also FDA October 16, 2013 Briefing Document at 37.
long-term ACCORD and AIM-HIGH trials10 would provide “important information,” and both
trials were ultimately unsuccessful. See CAC ¶¶ 127; 158; 163; 164; 168–69; 174; 187; 213; 261;
281–84 Defendants attach the FDA’s Meeting Minutes to their motion and contend that their
alleged non-disclosure of the FDA’s 2008 comments is not actionable because (1) they had no
duty to disclose the FDA comments and (2) the statements Defendants did make were not false
In response, Plaintiff argues that “[t]he FDA’s statements to Amarin regarding the importance
of the ACCORD and AIM-HIGH studieswere essential to any discussion of approval of
Vascepa, and thus Defendants had a duty to reveal that information.” Pl.’s Opp. Br. at 13–14.
Defendants also attach to their motion the July 2008 FDA meeting minutes, which are not
publicly available and were not available to Plaintiff at the time he filed his Complaint. The
meeting minutes indicate that the FDA stated, in relevant part, that:
Although levels of non-HDL-C correlate with risk for CVD in some studies, we
are not aware of any prospective, controlled clinical trial data demonstrating that
pharmacological reduction of non-HDL-C (or TG) with a second drug in patients with
elevated TG levels at LDL goal on statin therapy significantly reduces the residual
risk for CVD. The AIM-HIGH, ACCORD, and IMPROVE-IT studies, while not
designed to address this specific gap in knowledge, will provide important
information on the incremental benefit of adding a second lipid-active drug to statin
Thus, before we would entertain granting Ethyl-EPA an indication as add-on to
statin therapy in patients with elevated TG levels, Amarin would at a minimum have
to provide us with the results from a 12-week study similar to what you have
proposed with Study B, and you would have to initiate an appropriately-designed
cardiovascular outcomes study such that the trial was well under way at the time we
reviewed the results from Study B.
July 14, 2008 FDA Pre-IND Meeting Notes at 9–10. The Court finds that the Meeting
Minutes are integral to Plaintiff’s Complaint, and, accordingly, may consider the
document without converting this motion into a motion for summary judgment. In re
Burlington Coat Factory, 114 F.3d at 1426.
According to Defendants, the results from the third long-term study referenced in the
Meeting Minutes, the IMPROVE-IT study, were not released until November 17, 2014;
Defendants assert that the IMPROVE-IT study was successful. Defs.’ Br. at 1.
Plaintiff acknowledges that the FDA did not state “that the success of the two trials was a
‘condition’ to approval.’” Pl.’s Opp. Br. at 10 n.8. However, Plaintiff argues “that the failure of
the trials was ‘important information’ that made it ‘substantially less likely’ that Amarin would
obtain approval.”11 Id.
Section 10(b) and Rule 10b–5 “do not create an affirmative duty to disclose any and all
material information.” Matrixx Initiatives, Inc. v. Siracusano, ––– U.S. ––––, 131 S.Ct. 1309,
1321 (2011). Rather, “‘[d]isclosure is required . . . only when necessary ‘to make . . . statements
made, in the light of the circumstances under which they were made, not misleading.’” Id.
(quoting 17 C.F.R. § 240.10b–5(b)); see also City of Edinburgh Council v. Pfizer, Inc., 754 F.3d
159, 174 (3d Cir. 2014); In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997)
(“[P]ossession of material nonpublic information alone does not create a duty to disclose it.”).
Here, the Court does not find that Defendants had a duty to disclose the FDA’s full comments
from the 2008 meeting. The Briefing Document and the Meeting Minutes characterize the FDA’s
position as: “the trials ongoing at the time (e.g., AIM-HIGH, ACCORD-Lipid) . . . , while not
able to assess the effect of specifically lowering non-HDL-C (or TG) on clinical outcomes,
would be expected to provide important information on the incremental benefit of adding a
second lipid-active drug to statin therapy.”12 CAC ¶ 13; see also FDA October 16, 2013 Briefing
Document at 37; Oct. 16, 2013 AdCom Testimony of Mary Roberts (“Specifically, the sponsor
was told the AIM-HIGH, ACCORD, and [IM]PROVE-IT studies will provide important
Plaintiff’s characterization of the FDA’s position in his opposition brief shifted slightly
from his position in the Complaint, in which Plaintiff asserted that “the success of the ANCHOR
trial was dependent on the success of the ACCORD-Lipid and AIM-HIGH trials.” CAC ¶ 18.
Similarly, the FDA July 2008 meeting minutes state that “[t]he AIM-HIGH, ACCORD,
and IMPROVE-IT studies, while not designed to address this specific gap in knowledge, will
provide important information on the incremental benefit of adding a second lipid-active drug to
statin therapy.” July 14, 2008 FDA Pre-IND Meeting Notes at 9–10.
information to the incremental benefit of adding a second lipid active drug to statin therapy.”).
Meanwhile, Defendants’ statements indicate that while the FDA would require an outcomes
study to be completed before entertaining an application for a more specific indication than the
ANCHOR indication, such a study was not required to be completed to obtain approval for the
ANCHOR indication itself.13 See CAC ¶¶ 127 n.10, 158, 163, 164, 174, 187, 213, 261.
Plaintiff argues that even though the FDA did not require the outcomes studies to be
completed, Defendants had a duty to disclose the fact that the FDA considered the results of the
outcomes studies that were underway to be important, and failure to do so, constitutes a
misleading statement or omission such that would sustain a securities fraud action. However, the
case law does not support Plaintiff’s assertion.
The Third Circuit’s recent decision in City of Edinburgh is instructive. In that securities
litigation case, which involved Pfizer’s statements made to investors in connection with the FDA
approval process involving an experimental Alzheimer’s drug, the plaintiffs argued that the
“defendants had a duty to speak fully and truthfully about the [experimental drug’s] Phase 2
interim results because they put the subject ‘in play’ by discussing those results publicly. Instead
of concealing material information about the poor Phase 2 interim results, the Funds allege
defendants should have either disclosed those poor results or admitted they had changed their
criteria for initiating the Phase 3 trial.” City of Edinburgh, 754 F.3d at 174. However, the Third
Circuit found that “[n]one of these statements [at issue] characterized or made affirmative claims
According to the July 2008 Meeting Minutes, Amarin met with the FDA to discuss
potential development plans for two indications: (1) “[a]s an adjunct to diet to reduce triglyceride
(TG) levels in adult patients with very high TG levels” (the ANCHOR indication) and (2) “[a]s
an adjunct to diet to reduce TG levels in adult patients with high TG levels not controlled by diet
and HMG CoReductase (statin) therapy” (an unnamed and more specific indication than the
ANCHOR indication, which Amarin apparently abandoned). See July 14, 2008 FDA Pre-IND
Meeting Notes at 4, 9–10.
about the Phase 2 interim results” and, thus, “defendants did not have a duty to disclose
additional information because they mentioned the Phase 2 interim results as one factor in their
decision to initiate Phase 3.” Id. at 174–75. Similarly, here, as pled, none of Defendants’
statements affirmatively characterized the importance of the outcomes studies; Defendants are
merely alleged to have stated, correctly, that the studies were not required to be completed in
order for the ANCHOR indication application process to continue, though they would have to be
completed if Amarin wished to apply for a new, more specific, indicator. See also Oran v.
Stafford, 226 F.3d 275, 285 (3d Cir. 2000) (finding that the defendant “did not make any
‘affirmative characterization’ that the FDA's approval was based on a complete review of every
piece of relevant medical information . . . . [but r]ather . . . made a simple (and accurate) factual
assertion that the FDA had found that Redux had an ‘acceptable safety profile’ following a
‘thorough review of more than 17 clinical trials’”); The Winer Family Trust v. Queen, No.
CIV.A. 03-4318, 2004 WL 2203709, at *7 (E.D. Pa. Sept. 27, 2004) aff’d sub nom. Winer
Family Trust v. Queen, 503 F.3d 319 (3d Cir. 2007) (“Rule 10b-5 . . . prohibits only misleading
and untrue statements, not statements that are incomplete. Often, a statement will not mislead
even if it is incomplete or does not include all relevant facts.”) (quoting Brody v. Transitional
Hopsitals Corp., 280 F.3d 997, 1006 (9th Cir. 2002)) cf. In re MedImmune, Inc. Sec. Litig., 873
F. Supp. 953, 966 (D. Md. 1995) (“Mere questioning by the FDA imposed no duty upon
Defendants either to trim back their opinions as to the efficacy of the drug or to report to the
public the FDA staffers' questions as they arose.”).
Plaintiff relies on In re Viropharma Inc. Securities Litigation, 21 F.Supp. 3d 458 (E.D. Pa.
2014), in which the district court examined, in relevant part, the defendants’ statements “that
based on the changes to [their drug’s] label, the Company expected to reap record sales on their
exclusivity-protected” drug. Id. at 470. The district court in that case found that the plaintiffs had
adequately alleged that defendants’ omissions regarding the FDA’s conclusions regarding
deficiencies in a pharmaceutical study were material because the FDA’s conclusions “bore
directly on the exclusivity issue.” Specifically, the plaintiffs alleged that “the FDA told
Defendants that the studies upon which Defendants based their new label did not and could not
meet the QI Act standards for exclusivity.” Id. at 470. However, Viropharma is distinguishable.
In that case, the defendants made affirmative representations about the probability that their new
label would be approved in spite of the FDA’s conclusion that the study that defendants wanted
to use in support of their label changes “was not adequate and well controlled.” Id. at 469
(internal citations and quotation marks omitted). Here, however, the FDA did not issue any
conclusions about the studies at issue, nor did they make any requirements about how far along
or successful the studies had to be in order for the FDA to consider approving the ANCHOR
indication. Rather, as pled by Plaintiff, the FDA merely commented that the studies would
provide important information. Such a comment does not transform defendants’ statements into
material omissions as in Viropharma.14
On April 13, 2015, Plaintiff submitted a supplemental letter to the court, arguing that the
Supreme Court’s March 2015 decision in Omnicare, Inc. v. Laborers Dist. Council Constr.
Indus. Pension Fund, 135 S.Ct. 1318 (2015) supports its position that Defendants made
materially false or misleading statements regarding the importance of the ACCORD and AIMHIGH studies. In Omnicare, the Supreme Court examined Section 11 of the Securities Act of
1933, which provides a private right of action for any person acquiring security in a company
making a public offering and whose registration statement, “when such part became effective,
contained an untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.” 15 U.S.C. § 77k(a).
The Supreme Court considered how opinion statements made in the registration statement should
be treated under Section 11 and found that (1) “a sincere statement of pure opinion is not an
‘untrue statement of material fact,’” though an insincere statement of opinion or a statement
supplying an underlying untrue fact may be; and (2) “if a registration statement omits material
facts about the issuer's inquiry into or knowledge concerning a statement of opinion, and if those
Therefore, Plaintiff fails to allege that the first set of statements were materially false or
misleading,15 and, thus, the first set of statements, as pled, do not support at 10b-5 action.16
2. Second Set of Statements – Mineral Oil Placebo in ANCHOR trial
Second, Plaintiff asserts that “Defendants suppressed concerns regarding the use of mineral
oil as the placebo in the ANCHOR trial.” See CAC ¶¶ 72–85; 143; 249. Specifically, Plaintiff
alleges that Defendants stated, on numerous occasions, that “(i) the use of mineral oil as a
placebo did not raise any specific concerns with respect to the anticipated approval of the
ANCHOR sNDA [supplemental new drug application] by late 2013, (ii) that the ANCHOR study
facts conflict with what a reasonable investor would take from the statement itself, then § 11's
omissions clause creates liability.” Omnicare, 135 S.Ct. at 1326, 1329.
While the Court noted that the principles considered in Omnicare “inhere, too, in much
common law respecting the tort of misrepresentation,” id. at 1330, I do not find that Omnicare
changes my analysis in this case. Here, assuming, without deciding, that Omnicare applies in the
Section 10(b) context, I find that the omitted fact in Defendants’ opinion statements at issue—
that the FDA commented that the ACCORD and AIM-HIGH studies’ outcomes would produce
“important information”—does not conflict with what a reasonable investor would take from the
statements themselves. Again, Defendants merely stated that a long-term outcomes study, which
was already underway, was not required to be completed for the ANCHOR indication to be
approved; that the completion of any other such studies underway would provide important
information does not conflict with those statements.
Defendants also separately argue that their first set of statements is not materially false or
misleading because Plaintiff “does not identify any statement rendered false or misleading by the
information Amarin actually omitted.” Defs.’ Br. at 12–13. The Court does not view this
argument as separate from Defendants’ underlying argument that there was no duty to disclose
the FDA’s comment that the outcomes studies would provide important information. Because
“‘[d]isclosure is required . . . only when necessary ‘to make . . . statements made, in the light of
the circumstances under which they were made, not misleading,” Matrixx, 131 S.Ct. at 1321,
Defendants had no duty to disclose here because the statements they made on the subject were
not misleading; inherent in that conclusion is the notion that Plaintiff “does not identify any
statement rendered false or misleading by the information Amarin actually omitted.” Defs.’ Br.
Defendants further allege that the first set of statements were not materially false or
misleading because (1) Amarin’s statements are protected by the safe harbor for forward-looking
statements, (2) the allegedly false statements are inactionable puffery, and (3) the truth on the
market doctrine bars Plaintiff’s claims. Because I have found that the statements are not
materially false or misleading, I need not consider Defendants’ alternative arguments.
achieved its primary and secondary endpoints, and (iii) that Amarin anticipated approval of the
ANCHOR sNDA without completing an outcomes study,” all of which was materially false and
misleading,17 because “[a]ccording to the FDA’s statements at the Advisory Committee Meeting,
the FDA’s [concerns] with the use of mineral oil as placebo was shared with Amarin prior to the
AdCom.”18 CAC ¶ 143(iii). Defendants argue that their alleged omissions about the mineral oil
Plaintiff alleges that Defendants made statements to this effect at least thirty times, on the
following occasions: (1) the November 29, 2010 press release, (2) the December 16, 2010 press
release, (3) the January 6, 2011 Prospective Supplement, (4) the 2010 Form 10-K, (5) the March
17, 2011 conference call, (6) the April 18, 2011 press release announcing the ANCHOR trial
results, (7) the April 18, 2011 conference call, (8) the May 10, 2011 press release announcing
first quarter 2011 operating results, (9) the May 10, 2011 conference call, (10) the August 9,
2011 press release, (11) the August 10, 2011 earnings call, (12) the November 7, 2011 press
release, (13) the November 8, 2011 earnings call, (14) the January 3, 2012 letter to shareholders,
(15) the 2011 Form 10-K, (16) the February 29, 2012 press release, (17) the February 29, 2012
conference call, (18) the May 8, 2012 conference call, (19) a conference call following the July
26, 2012 announcement that Amarin had received approval for the MARINE indication, (20) the
August 8, 2012 press release announcing second quarter 2011 operating results, (21) the August
8, 2012 earnings call, (22) the November 8, 2012 conference call, (23) the February 26, 2013
press release, (24) the February 28, 2013 press release, (25) the February 28, 2013 conference
call, (26) the 2012 Form 10-K, (27) the May 9, 2013 press release, (28) the May 9, 2013
conference call, (29) the June 19, 2013 announcement of an Advisory Committee for the
ANCHOR sNDA, (30) the July 10, 2-013 Prospectus Supplement, and (31) the August 8, 2013
press release and conference call. CAC ¶ 146(ii); see also CAC ¶¶ 146–147, 149, 153, 158, 162–
164, 168–169, 172, 174–175, 180, 181, 183–187, 194–198, 201–202, 204–208, 211–213, 215–
217, 220–222, 224, 231–234, 240, 241, 243–245, 249, 256–261, 266, 268, 274, 275, 281, 286–
Plaintiff’s specific allegations about the viability of mineral oil as a placebo are detailed
below. The ANCHOR trial utilized mineral oil as a placebo. CAC ¶ 74. “The ANCHOR study
demonstrated adverse lipid test results on placebo compared to baseline statin therapy –
including an increase in LDL-C of 8.8% and TGs of 5.9% -- raising the possibility that mineral
oil was not inert and had an adverse impact on absorption of the statin.” CAC ¶ 76. “Moreover,
the treatment arm (Vascepa plus statin) resulted in a 1.5% increase in LDL-C over baseline.
Therefore, in absolute terms, Vascepa did not decrease the reading of LDL-C in the ANCHOR
study, but rather only decreased the reading relative to placebo.” CAC ¶ 77.
In September 2011, Confidential Witness A [“CWA”], a senior director of clinical
research and medical affairs at Amarin who reported to Paresh Soni, Senior Vice
President, Head of Development, was concerned that the mineral oil placebo was not
inert and had an adverse impact on the absorption of the statin, which resulted in the
placebo used in the ANCHOR trial are not materially false or misleading because (1) “[a]
company has no duty to disclose “internal debate” regarding its trials (especially so when the
position management has taken is consistent with a negotiated protocol approved by the FDA)
8.8% increase in LDL-C and 5.9% increase in TG readings in the control arm. Soni
informed [CWA] that he too was concerned that mineral oil was not inert and had
discussed his concerns with defendant Zakrzewski.
CAC ¶ 78.
Because of his concern with mineral oil as the placebo, [CWA] recommended to
 Soni and Rene Braeckman (Head of Development Operations) that Amarin conduct
a . . . study to compare mineral oil placebo to corn oil and olive oil to determine if
there were effects on results [and potentially modify the newer REDUCE-IT study].
Other similar studies of drugs with similar viscosity and taste to Vascepa at the time
were using olive oil or corn oil placebos. Soni and Braeckman rejected any potential
study or modifications to the REDUCE-IT protocol because the SPA had been
approved by the FDA and the ANCHOR study had been conducted with mineral oil
as the placebo. Zakrzewski told [CWA] that he would not allow any change to
REDUCE-IT and that this study would meet a budget number and not to answer a
scientific question and that Amarin ‘was not moving backwards.’ Zakrzewski told
[CWA] that he was not changing any studies that would affect the time line of when
Amarin could file the sNDA with the FDA for the ANCHOR indication.
CAC ¶ 79.
“As stated . . . in the [FDA’s] October 11, 2013 Briefing Document to the Advisory
Committee and at the Advisory Committee meeting itself, the FDA shared [CWA’s] concern that
mineral oil was not inert and stated that it had met with Amarin to discuss the issue in advance of
the Advisory Committee hearing – thus confirming plaintiff’s allegations that Defendants’ had
actual knowledge of the risk that mineral oil was not inert and misrepresented the true facts to
investors.” CAC ¶ 83; see also CAC ¶ 313 (Plaintiff’s allegations quoting an FDA official’s
testimony at the AdCom meeting in which the official allegedly stated, “we discussed our
concerns with the sponsor and asked that they task the REDUCE-IT data monitoring committee
with evaluating the accruing lipid data with this concern in mind”). Therefore, according to
Plaintiff, “Defendants knew that the ANCHOR test results indicated that mineral oil may not be
biologically inert, refused to conduct further tests, and misrepresented the truth with respect to
the ANCHOR results to investors.” CAC ¶ 84.
However, Plaintiff does not specify in the CAC when Defendants allegedly became aware of
the FDA’s concerns. See generally CAC.
The credibility of CWA’s allegations is examined infra in the Court’s discussion of scienter.
and (2) “Plaintiffs also fail to allege that any affirmative statement was rendered misleading by
the alleged omission.” Defs.’ Br. at 18–19.
At the outset, to the extent that the more than thirty statements highlighted by Plaintiff
indicated “that Amarin anticipated approval of the ANCHOR sNDA without completing an
outcomes study,” such statements are opinions which do not contain underlying untrue facts and
are thus not materially false or misleading unless Defendants knew them to be false or
misleading at the time they were made. See, e.g., Dutton v. Harris Stratex Networks, Inc., 270
F.R.D. 171, 178 (D. Del. 2010).
Here, the Court does not find Defendants’ statements about the progress and likelihood of
success of the ANCHOR trial to be materially false or misleading at the time they were made, for
multiple reasons. First, Plaintiff does not plead that any FDA concerns about the mineral oil
placebo were so serious as to place the ANCHOR trial and, thus, FDA approval of the ANCHOR
indication, in jeopardy; in fact, Plaintiff indicates that the FDA approved the use of mineral oil as
a placebo in its SPA with Amarin. See CAC ¶ 79. Because Plaintiff fails to plead that the FDA’s
concerns were so concrete or serious as to derail the ANCHOR trial or indication,19 Plaintiff fails
to plead that Defendants’ statements expressing optimism about the ANCHOR trial’s progress
were materially false or misleading so as to require the disclosure of those concerns. See, e.g., In
re Sanofi Sec. Litig., No. 13 CIV. 8806 PAE, 2015 WL 365702, at *18 (S.D.N.Y. Jan. 28, 2015)
(finding that defendants’ omissions regarding FDA concerns about a clinical trial to not be
materially false or misleading statement because “[d]espite the concerns the FDA had expressed
about the design of the clinical trials, it allowed those trials to proceed.”); cf. In re MedImmune,
Indeed, the July 2008 Meeting Minutes indicate that any FDA concerns expressed at that
time regarding the mineral oil placebo were resolved at the meeting. See July 14, 2008 FDA PreIND Meeting Notes at 7–8.
Inc. Sec. Litig., 873 F. Supp. at 966 (“Continuous dialogue between the FDA and the proponent
of a new drug is the essence of the product license application process . . . . Requiring ongoing
disclosure of FDA's questions would not only be disruptive to the review process; it could easily
result in misleading the public more than not reporting the questions.”). Moreover, Plaintiff fails
to plead when the FDA expressed its concerns to Amarin about the mineral oil placebo. See
generally CAC. Therefore, even if the Court were to conclude that positive statements about the
trial in the wake of such concerns were materially false or misleading, I would be unable to
determine which statements were made after the concerns were expressed.
Therefore, the Court finds that Plaintiff has failed to plead that Defendants’ second set of
statements are materially false or misleading so as to sustain a 10b-5 action.
3. Third Set of Statements – JELIS Trial
Plaintiff states that “Defendants repeatedly miscited JELIS20 as support for the efficacy of
Vascepa, despite their actual knowledge of critical distinctions between JELIS and ANCHOR
and REDUCE-IT.” See CAC ¶¶122–25; ¶ 146(ii), 165; 202; 288. Specifically, Plaintiffs allege
that on two occasions, Defendants “represented that the JELIS study was indicative of efficacy
of Vascepa for the ANCHOR indication,” which was “materially false and misleading because
“The Japan Eicosapentaenoic acid (EPA) Lipid Intervention Study, or JELIS study, was the
first large-scale, prospective, randomized trial of combined treatment with a statin and an omega3 fatty acid originally derived from fish, eicosapentaenoic acid (EPA). The study tested the
effects of long-term use of EPA in addition to a statin in Japanese patients with
hypercholesterolemia.” CAC ¶ 120. “The JELIS investigators concluded that JELIS showed that
the addition of EPA to statin therapy provides additional benefit in preventing major coronary
events, apparently through lipid-independent mechanisms.” CAC ¶ 121.
Plaintiff identifies the differences between the JELIS trial and the ANCHOR trial as follows:
(1) “the ANCHOR trial was double-blind (neither participants nor researchers were aware of
which treatment each participant was receiving), whereas JELIS was open-label (both
participants and researchers knew which treatment was being administered),” and (2) “whereas
over 90% of the patients in the ANCHOR trial were on medium to high doses of statins, by
design, all of the patients in the JELIS study were on low doses of statin.” CAC ¶¶ 123, 125.
they failed to disclose material distinctions with respect to JELIS. Defendants were aware of the
distinctions between [the] JELIS and ANCHOR [trials] and knew that the results of the JELIS
study (high LDL-C at baseline and low statin administration) were not indicative of efficacy of
Vascepa for the ANCHOR indication.”21 CAC ¶ 146(ii). Defendants, however, argue that
“Amarin . . . never represented that the studies were identical or that the JELIS trial could serve
as a proxy for a Vascepa outcome study.” Defs.’ Br. at 20. Defendants further argue that
“Plaintiffs’ claim is also barred by the truth-on-the-market doctrine because the information
Specifically, Plaintiffs point to the following statements:
(1) The 2010 Form 10-K “discussed JELIS as establishing a successful outcomes study for
the ANCHOR indication of Vascepa:
Among the reasons why Phase II trials were not conducted or required is that the
active ingredient in Vascepa, ethyl-EPA of not less than 96% purity with no DHA,
has been approved by regulatory authorities in Japan and marketed by Mochida
Pharmaceutical Co. for over a decade. In Japan, ethyl-EPA is marketed under the
product name of Epadel and is indicated for hyperlipidemia and peripheral vascular
disease and which we understand has 2009 revenues in Japan that exceed $500
million per year. Clinical data from Japan shows that Epadel is effective in reducing
TGs. In addition, in an outcomes study called the Japan EPA Lipid Intervention Study
(JELIS) study, which study consisted of more than 18,000 patients followed over
multiple years, Epadel, when used in conjunction with statins, was shown to reduce
cardiovascular events by 19% compared to the use of statins alone. In this study,
cardiovascular events decreased by approximately 53% compared to statins alone in
the subset of patients with triglyceride levels of 150 mg/dL (average 269 mg/dL at
entry) and HDL-C <40 mg/dL.”
CAC ¶ 165.
(2) At the August 8, 2013 conference call, “Defendant Steven B. Ketchum, AMRN’s
head of R&D sought to downplay any risk to the approval of Vascepa for the ANCHOR
indication based on the outcomes of recent studies: . . . . ‘While we believe we do not
need the REDUCE-IT study to be completed for approval of the ANCHOR indication,
we do believe that this study is positioned for success. (inaudible) EPA and the JELIS
study, albeit in a Japanese population demonstrated significant reduction in
cardiovascular events over statin therapy alone . . . .’” CAC ¶ 288.
Plaintiffs allege was omitted was part of the total mix of information available to the market.” Id.
Upon review of Plaintiff’s allegations, the Court concludes that, as a matter of law,
Defendants’ statements regarding the JELIS trial were not materially false or misleading. The
first statement merely notes the existence of the JELIS trial and its successful outcome, without
comparing the JELIS trial to the ANCHOR trial. See CAC ¶ 165. The second statement is not
even pled as a complete statement, and the portion that was audible and transcribed in the
Complaint merely states that the JELIS study “demonstrated significant reduction in
cardiovascular events over statin therapy alone,” again without making comparisons or
highlighting similarities between the JELIS and ANCHOR studies. CAC ¶ 288. Indeed, the
second statement actually notes a distinction between the two studies: that the JELIS study tested
a Japanese population. Id. Therefore, as pled, Defendants’ statements regarding the JELIS trial
are not materially false or misleading as to sustain a 10b-5 action.22
Because the existence of a materially false or misleading statement is an essential element of
a 10b-5 action, and I have found that none of the statements identified by Plaintiff qualify,
Plaintiff’s Complaint is dismissed without prejudice for failure to state a claim.
b. Whether Plaintiff Has Alleged Particularized Facts Giving Rise to a Strong
Inference that the Individual Defendants Acted with Scienter
Plaintiff’s Complaint also fails to state a claim because Plaintiff fails to allege that the
Individual Defendants acted with scienter, another essential element of a 10b-5 action. “[I]n
determining whether the pleaded facts give rise to a ‘strong’ inference of scienter, the court must
Defendants further argue that their statements about the JELIS study are protected by the
“truth on the market” doctrine. Because I find that Defendants’ statements regarding JELIS are
not materially false or misleading, I need not reach this issue.
take into account plausible opposing inferences . . . . A plaintiff alleging fraud in a § 10(b) action
. . . must plead facts rendering an inference of scienter at least as likely as any plausible opposing
inference.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 323–29 (2007) (emphasis
in original). “While we will aggregate the allegations in the complaint to determine whether it
creates a strong inference of scienter, plaintiffs must create this inference with respect to each
individual defendant in multiple defendant cases.”23 Winer Family Trust v. Queen, 503 F.3d 319,
337 (3d Cir. 2007) (quoting Makor Issues & Rights, Ltd. v. Tellabs, Inc., 437 F.3d 588, 603 (7th
Cir. 2006) rev'd on other grounds, 551 U.S. 308 (2007)).
Plaintiff alleges that the following facts that, according to Plaintiff, support a strong inference
that the Individual Defendants acted with scienter: (1) Vascepa is Amarin’s “core” business,
supporting a strong inference that the Individual Defendants knew what transpired at the July
2008 meeting; (2) financial motives of the individual defendants support a strong inference of
scienter; (3) key senior employees left Amarin soon before the FDA ruling on the sNDA for
Defendants argue that Plaintiff has failed to plead that the Individual Defendants acted
with scienter. Regarding corporate scienter, also known as collective scienter, in which “a
plaintiff . . . plead[s] an inference of scienter against a corporate defendant without raising the
same inferences required to attribute scienter to an individual defendant,” the Third Circuit has
“neither . . . accepted nor rejected the doctrine of corporate scienter in securities fraud actions.”
Rahman v. Kid Brands, Inc., 736 F.3d 237, 246 (3d Cir. 2013) (internal citation omitted).
Plaintiff argues that the doctrine should be used here because the Third Circuit acknowledged
that other Circuits have adopted the concept of corporate scienter and indicated a willingness to
adopt the concept as well. Pl.’s Opp. Br. at 36. However, the Court reads Rahman as neutral, not
positive, towards the corporate scienter doctrine. See Rahman, 736 F.3d at 246.
Nevertheless, in his Complaint, Plaintiff does not plead any specific facts raising a strong
inference of scienter against Amarin; at most, Plaintiff states general, conclusory allegations that
both Amarin and the Individual Defendants acted with scienter. See CAC ¶¶ 327–380. Instead,
Plaintiff raises specific corporate scienter allegations for the first time in his opposition to
Defendants’ motion to dismiss by alleging that Amarin (1) had knowledge of the July 2008 FDA
meeting and (2) was economically motivated to commit fraud. It is axiomatic that a plaintiff may
not amend his Complaint through an opposition brief. Commonwealth of Pa. ex rel. Zimmerman
v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1988). Therefore, the Court will not consider
Plaintiff’s allegations of corporate scienter.
ANCHOR; and (4) CWA confirmed that Defendants were aware of but chose to ignore concerns
with the outcomes trials. CAC ¶¶ 327–80. While the Court will examine the totality of the
inferences supporting and opposing scienter to make its final determination, I will examine the
allegations regarding Defendants’ motive and opportunity before proceeding to allegations
regarding Defendants’ conscious misbehavior or recklessness. See Institutional Investors Grp. v.
Avaya, Inc., 564 F.3d 242, 268 (3d Cir. 2009).
1. Motive and Opportunity
The Court will first examine Plaintiff’s contention that the Individual Defendants acted with
scienter because they had financial motive and opportunity. While the Third Circuit recognizes
that “‘motive and opportunity’ may no longer serve as an independent route to scienter” in the
wake of Tellabs’s instructions to consider the complaint in its entirety, particularized allegations
regarding motive and opportunity may, in combination with other allegations, support a strong
inference of scienter. Avaya, 564 F.3d at 268; see also Tellabs, 551 U.S. at 323–29. In that
connection, Plaintiff alleges that (1) Defendants Zakrzewski and Thero were “financially
motivated to commit the fraud and artificially inflate the market price of Amarin stock, [because
w]hile in possession of material, nonpublic information regarding the prospects for approval of
Vascepa for the ANCHOR indication, [they] sold substantial Amarin ADSs at artificially inflated
prices, reaping huge profits.”24 CAC ¶¶ 343, 346. “Stock sales unusual in time and scope may
give rise to an inference of scienter.” In re Urban Outfitters, Inc. Sec. Litig., No. CIV.A. 135978, 2015 WL 2069222, at *12 (E.D. Pa. May 4, 2015) (citing Avaya, 564 F.3d at 279). Put
another way, “insider trading in suspicious amounts or at suspicious times” giving rise to an
inference that the trader engaged in wrongdoing, may be also inferred to the company as well.
As to Defendant Ketchum, Plaintiff does not allege that Ketchum sold any stock.
Advanta, 180 F.3d at 540; see also Urban Outfitters, 2015 WL 2069222, at *12. “Whether a sale
is ‘unusual in scope’ depends on factors such as ‘the amount of profit made, the amount of stock
traded, the portion of stockholdings sold, or the number of insiders involved.’” In re Suprema
Specialties, Inc. Sec. Litig., 438 F.3d 256, 277 (3d Cir. 2006) (quoting Wilson v. Bernstock, 195
F.Supp. 2d 619, 635 (D.N.J. 2002)). “Other factors relevant to scope and timing are whether the
sales were ‘normal and routine,’ and whether the profits were substantial relative to the seller's
ordinary compensation.” Id. (quoting In re Burlington Coat Factory, 114 F.3d at 1423).
Here, Plaintiff alleges that, “[a]s part of Zakrzewski’s remuneration, he was granted an
option on December 21, 2009 to purchase 1,170,000 ordinary shares under the Amarin 2002
Stock Option Plan (the options were to vest in four equal installments over four years). On
November 11, 2010, Zakrzewski was granted options to purchase an additional 1,750,000 shares
under the same Plan (also to vest over four years in equal installments). During 2011, 730,000 of
his shares became exercisable and he sold 460,000, or 63% of his total shares available to sell.
During 2012, another 730,000 of his shares became exercisable and he sold 610,000, or 84% of
his total shares available to sell. In sum, from February 22, 2011 through October 1, 2012,
Zakrzewski sold 1,070,000 shares of Amarin ADSs for total net proceeds of $11,898,553.” CAC
¶¶ 344–45. However, none of these facts suggest that Zakrzewski sold his stocks at unusual
times or in unusual amounts; Zakrzewski sold his stocks at prices well below Amarin’s high of
$19.50, sold them in increments throughout 2011 and 2012, sold them well before the October
2013 Briefing Document was released, and still retained hundreds of thousands of Amarin
shares. See CAC ¶ 4. Further, Zakrzewski’s stock options were a portion of his salary, and, thus,
it is not unusual for him to have exercised his stock options when they became available. See In
re Advanta Corp. Sec. Litig., 180 F.3d 525, 541 (3d Cir. 1999) (“A large number of today's
corporate executives are compensated in terms of stock and stock options. It follows then that
these individuals will trade those securities in the normal course of events.”) (quoting Burlington
Coat Factory, 114 F.3d at 1424); see also In re Astea Int'l Inc. Sec. Litig., No. CIV.A. 06-1467,
2007 WL 2306586, at *14 (E.D. Pa. Aug. 9, 2007); City of Edinburgh Council v. Pfizer, Inc.,
754 F.3d 159, 176 (3d Cir. 2014). (“The mere fact that [the defendants] sold stock is insufficient
to establish scienter.”).
Similarly, Plaintiff alleges that, “[a]s part of Thero’s remuneration, he was granted an option
on December 21, 2009 to purchase 900,000 ordinary shares under the Amarin 2002 Stock Option
Plan (under which the options were to vest in four equal installments over four years). On
November 10, 2010, Thero was granted an option to purchase an additional 1,200,000 ordinary
shares under the Amarin 2002 Stock Option Plan (also to vest over four years in equal
installments). During 2012, 625,000 of his shares became exercisable and he sold 451,852, or
approximately 72% of his total shares available to sell. In sum, from April 9, 2012 through July
27, 2012, Thero sold 451,852 shares of Amarin ADSs for total net proceeds of $4,901,434.”
CAC ¶¶ 347–48. However, the same reasoning applies to Plaintiff’s allegations about Thero’s
motive and opportunity. Thero sold his stocks at prices well below Amarin’s high of $19.50, sold
them in increments throughout 2012, sold them well before the October 2013 Briefing Document
was released, and still retained several hundreds of thousands of shares. Further, Thero’s stock
options were a portion of his salary, and, thus, it is not unusual for him to have exercised his
stock options when they became available. See In re Advanta Corp., 180 F.3d at 541; see also In
re Astea Int'l Inc., No. CIV.A. 06-1467, 2007 WL 2306586, at *14.
Plaintiff further alleges that Zakrzewski, Thero, and Ketchum also received bonuses,
additional stock options, and high salaries. Specifically, “[a]ll three defendants were paid, in the
aggregate, from 2010-12, in excess of $24.5 million of executive compensation–an enormous
sum considering that the company had hardly any revenue and little to no prospect of success on
getting FDA approval for Vascepa based on the ANCHOR indication, without conducting the
‘bet the ranch’ $100 plus million REDUCE-IT test.” CAC ¶ 360. However, this fact simply
reveals a generic corporate motive to continue Amarin’s success, which is insufficiently
supportive of scienter. See GSC Partners CDO Fund v. Washington, 368 F.3d 228, 237-38 (3d
Cir. 2004) (finding insufficient the plaintiffs’ allegations that “the defendants' motive to commit
fraud was that Washington ‘would not have been able to acquire [the target company] without
the successful issuance of the Notes,’ and would not have been able to sell any of the notes at or
near the price sought ‘had the true financial condition of the [target company] been revealed’”).
Courts have found even more specific pecuniary motivations, such as the possibility of receiving
performance-related bonuses or underwriting fees on behalf of the company, to fall short of
demonstrating scienter. Id. (underwriting and financial advisory fees); California Pub.
Employees' Ret. Sys. v. Chubb Corp., No. CIV. NO. 00-4285 (GEB, 2002 WL 33934282, at *22
(D.N.J. June 26, 2002) (a higher salary and bonus). Nor is it sufficient to allege a general desire
to inflate, increase, or maintain the stock price. Nat’l Junior Baseball League, 720 F. Supp. 2d at
551-52; In re Bio-Technology General Corp. Sec. Litig., 380 F. Supp. 2d 574, 595 (D.N.J. 2005).
Therefore, Plaintiff has failed to allege that Defendants had motive and opportunity, or
engaged in sock sales unusual in time or scope, such that would support a strong inference of
2. Conscious Misbehavior or Recklessness
I next turn to Plaintiffs’ scienter allegations regarding Defendants’ alleged conscious
misbehavior or recklessness. “The standard for ‘conscious misbehavior or recklessness’ requires
misrepresentations to be ‘so recklessly made that the culpability attaching to such reckless
conduct closely approaches that which attaches to conscious deception.’” In re Radian Sec.
Litig., 612 F. Supp. 2d 594, 622 (E.D. Pa. 2009) (quoting In re Digital Island Sec. Litig., 357
F.3d 322, 332 (3d Cir. 2004)). “Conscious misbehavior involves ‘intentional fraud or other
deliberate illegal behavior.’” In re Radian Sec. Litig., 612 F. Supp. 2d 594, 613 (E.D. Pa. 2009)
(quoting In re Advanta, 180 F.3d at 535). Recklessness involves “not merely simple, or even
inexcusable negligence, but an extreme departure from the standards of ordinary care, and which
presents a danger of misleading buyers or sellers that is either known to the defendant or is so
obvious that the actor must have been aware of it.” In re Advanta, 180 F.3d at 539.
In that connection, Plaintiff alleges that (1) Vascepa is Amarin’s “core” business, and,
therefore, “it is simply not plausible that Amarin’s most senior management, including those
directly responsible for overseeing, managing and reporting on its financial state, were not privy
to the internally known adverse facts disclosed to the Company by the FDA in July 2008,” CAC
¶ 331; (2) “two key senior employees with knowledge of Amarin’s communication with the
FDA” left Amarin soon before the FDA ruling on the sNDA for ANCHOR, CAC ¶ 361; and (3)
CWA confirmed that Defendants were aware of but chose to ignore concerns with the outcomes
I will first address Plaintiff’s “core business” allegation. “While it is true that false or
misleading statements by key executives regarding a company's lead product or core business
practices will weigh in favor of finding a strong inference of scienter, [courts] will not make such
an inference ‘absent particularized allegations showing that defendants had ample reason to
know of the falsity of their statements.’” City of Roseville Employees' Ret. Sys. v. Horizon Lines,
Inc., 686 F. Supp. 2d 404, 423 (D. Del. 2009). In that connection, Defendants argue that the
Individual Defendants joined Amarin years after the 2008 Meeting, and, thus, Plaintiffs do not
sufficiently allege that the Individual Defendants knew about the FDA’s comments regarding the
ACCORD and AIM-HIGH trials. Defs.’ Br. at 23. The Court agrees. See Nat’l Junior Baseball
League, 720 F. Supp. 2d at 556 (“[I]t is not automatically assumed that a corporate officer is
familiar with certain facts just because these facts are important to the company’s business; there
must be other, individualized allegations that further suggest that the officer had knowledge of
the fact in question.”); see also In re Bio–Technology General Corp. Sec. Litig., 380 F.Supp.2d
574, 596 (D.N.J.2005); In re Advanta, 180 F.3d at 539 (“[A]llegations that a securities-fraud
defendant, because of his position within the company, ‘must have known’ a statement was false
or misleading are precisely the types of inferences which courts, on numerous occasions, have
determined to be inadequate to withstand Rule 9(b) scrutiny.”). Here, that the FDA expressed its
opinion at one point that the results of the ACCORD and AIM-HIGH studies would be
“important information” with respect to the ANCHOR indication is not even a specific enough
statement to qualify as a fact that was important to Amarin’s business; even if it were, Plaintiff
has not adequately alleged that the individual defendants had knowledge of the FDA’s comment.
Thus, Plaintiff’s allegations that Vascepa is Amarin’s core business are insufficient to support a
strong inference of scienter.
Next, I examine Plaintiff’s argument that two key employees with knowledge of the FDA’s
July 2008 comments left Amarin before the FDA ruled on the ANCHOR sNDA. “[A]
defendant's resignation could constitute a ‘piece to the scienter puzzle’ if the resignation both
takes place within a couple of months of the announcement of the errors committed and is
accompanied by an extraordinary corporate punishment measure, e.g., denial of severance
payment.” In re Intelligroup Sec. Litig., 527 F. Supp. 2d 262, 347 (D.N.J. 2007); see also City of
Roseville Employees' Ret. Sys. v. Horizon Lines, Inc., 442 Fed. App'x 672, 679 (3d Cir. 2011).
Here, Plaintiff alleges that Paresh Soni, Amarin’s Senior Vice President and Head of
Development since September 2008, left in August 2013, two months before the Briefing
Document was released, “reflecting his lack of confidence in Amarin’s ability to get FDA
approval of Vascepa for the ANCHOR indication.” CAC ¶ 368. Further, Plaintiff alleges that
Paul Duff, who joined Amarin in February 2011 as Chief Commercial Officer and was thereafter
promoted to Senior Vice President, “resigned from Amarin without public comment in July
2013, prior to the AdCom Hearing, reflecting his significant lack of confidence in Amarin’s
ability to get FDA approval of Vascepa for the ANCHOR indication.”25 CAC ¶ 377. Neither
Soni nor Huff are named as Individual Defendants in Plaintiff’s Complaint.
Here, though Soni and Huff did resign just a few months before the Briefing Document was
released, in which it was “revealed” that the FDA had concerns about the studies underpinning
Vascepa’s ANCHOR sNDA, Plaintiff does not allege that any extraordinary corporate punitive
actions were taken against Soni or Huff, nor any other specific facts that suggest that they
resigned because they feared fallout from Amarin’s false or misleading statements about
Vascepa. Based on Plaintiff’s allegations, is more plausible that Soni and Huff resigned for
various other reasons, such as to pursue other opportunities, for family reasons, etc., than it is
that they resigned due to knowledge that Amarin’s false or misleading statements were soon to
be exposed. See Tellabs, 551 U.S. at 323–29. Thus, those executives’ resignations, without more,
The CAC also alleges that in 2011, Soni sold 200,000 of his 400,000 stock shares that
became exercisable and that in 2012, Huff sold 100% of his restricted stock units that vested, as
well as an unspecified percentage of his stock options that also vested. To the extent that Plaintiff
alleges these facts to suggest that Soni and Huff lacked confidence in the possibility that Vascepa
would be approved for the ANCHOR indication, such a suggestion must fail, for the same
reasons discussed supra regarding Plaintiff’s scienter allegations about the Individual
Defendants’ exercise of their stock options.
are insufficient to support a strong inference of scienter. See, e.g., In re Intelligroup Sec. Litig.,
527 F. Supp. 2d 262, 347 (D.N.J. 2007); see also City of Roseville Employees' Ret. Sys., 442 Fed.
App’x at 679.
Finally, Plaintiff also alleges that scienter may be inferred from the fact that CWA confirmed
that Defendants were aware of but chose to ignore concerns with the outcomes trials. See CAC
¶¶ 378–80. Defendants argue that the majority of CWA’s allegations pertain to the use of
mineral oil as a placebo and “establish the highly credible non-fraudulent inferences that Amarin
was comfortable with the mineral oil placebo, and resistant to running new trials using a new
placebo ‘because the SPA had been approved by the FDA and the ANCHOR study had been
conducted with mineral oil as the placebo.’” Defs.’ Br. at 26 (quoting CAC ¶ 79). Defendants
further argue that “CWA’s allegations regarding Zakrzewski’s disagreement with an unspecified
Senior Director of Investor Relations likewise fail to raise any inference of scienter, instead
bolstering the notion that Zakrzewski believed Vascepa would be approved for the ANCHOR
Indication,” in part because Plaintiff has not alleged that Zakrzewski did not believe his own
statements. Defs.’ Br. at 26–27.
The Third Circuit has counseled that when examining the allegations of confidential sources,
district courts should examine “the detail provided by the confidential sources, the sources’ basis
of knowledge, the reliability of the sources, the corroborative nature of other facts alleged,
including from other sources, the coherence and plausibility of the allegations, and similar
indicia.” Calif. Public Employees' Retirement Sys. v. Chubb Corp., 394 F.3d 126, 147 (3d Cir.
2004). “If, after that assessment, ‘anonymous source allegations are found wanting with respect
to these criteria . . . courts must discount them steeply.” Rahman v. Kid Brands, Inc., 736 F.3d
237, 244 (3d Cir. 2013) (quoting Avaya, 564 F.3d at 261). “We explained in Avaya that such a
discount ‘is consistent with Tellabs’s teaching that omissions and ambiguities count against
inferring scienter under the PSLRA's particularity requirements,’ but if ‘a complaint’s
confidential witness allegations are adequately particularized, we will not dismiss them simply
on account of their anonymity.’” Id. (quoting Avaya, 564 F.3d at 261).
Here, Plaintiff has identified CWA as “a senior director of clinical research and medical
affairs at Amarin who reported to Paresh Soni, Senior Vice President, Head of Development . . .
.” CAC ¶ 78. The Court finds that CWA’s sources of knowledge (his clinical research position at
Amarin and his conversations with senior executives at the company), the reliability of the
sources (high, by virtue of his position at Amarin), the corroborative nature of other facts alleged
(fairly corroborative, given that Amarin made no changes to placebo used in the ANCHOR trial
and the FDA stated it had expressed concerns about the placebo as well) and the coherence and
plausibility of the allegations (high, by virtue of the FDA’s similar concerns and his position at
Amarin), are not wanting; thus, the Court will not discount CWA’s allegations simply because he
is anonymous. See Calif. Public Employees' Retirement Sys., 394 F.3d at 147; Rahman, 736 F.3d
However, the Court finds that CWA’s allegations do not support a strong inference of
scienter. CWA’s allegations state that (1) Zakrzewski was open about wanting to sell Amarin at a
high price, (2) the Senior Director of Investor Relations and Communications “would tell CWA
that he tried to get Zakrzewski to be less optimistic in public statements” and that CWA tried to
do the same, and (3) “the Senior Director told CWA that the Senior Director was ‘at the end of
his rope,’” and “[t]he Senior Director left Amarin in March 2013.” CAC ¶ 379. “CWA also said
that he has spoken to two different Medical Science Liaisons (the “MSLs”) who worked with
Amarin, and specifically defendant Ketchum, in advance of the October 16, 2003 AdCom. The
MSLs told CWA that defendant Ketchum knew he would receive questioning from the AdCom
on the use of mineral oil on placebo and the relevance of ACCORD-LIPID and AIM-HIGH to
approving Vascepa for the ANCHOR indication without an outcomes trial and was concerned
that he would be unable to satisfy the FDA’s and the AdCom’s concerns.” CAC ¶ 380. However,
these statements—even coupled with Plaintiff’s statements earlier in the Complaint about
Amarin senior executives rejecting any changes to their studies because the SPA had been
approved and Amarin “was not moving backwards”—merely create the inference that
Zakrzewski and other executives were optimistic about the success of Vascepa and about
Amarin’s success, despite some concerns raised about the mineral oil placebo. The statements do
not indicate that Zakrzewski or any other executive did not believe the statements Amarin made
about Vascepa were false. See CAC ¶¶ 78–79; 378–80. Therefore, CWA’s statements do not
raise the strong inference of scienter.26
Finally, to the extent that allegations by Confidential Witness B (“CWB”) are raised in
support of scienter, Defendants argue that the allegations “are so speculative and attenuated as to
have no credibility.” Defs.’ Br. at 27.
“[CWB] was a Senior Medical Science Liaison for Amarin based in a mid-Atlantic state.
[CWB] was employed by Amarin from July 2012 to October 2013. Confidential Witness B
reported to Sephy Philip, Senior Director of Medical Affairs, and to Christina Copeland, Medical
Director.” CAC ¶ 294. Plaintiff “has confirmed [CWB’s] job description and employment with
Amarin on LinkedIn.” CAC ¶ 298 n.11. “When [CWB] attended the prep session for the FDA
meeting, he was under the impression that Dr. Christie Ballantyne, the principal investigator on
the ANCHOR study, would be presenting the results of the study and speaking on behalf of
Amarin at the FDA meeting. A week before the FDA meeting, however, [CWB] learned that
Ballantyne had declined to participate and was not going to present the data or speak on behalf of
Amarin.” CAC ¶ 301. “Ballantyne’s decision surprised [CWB] because principal investigators
usually are willing to present their data and speak on behalf of the company at FDA meetings.”
CAC ¶ 302. “‘I found that odd,’ [CWB] said. ‘I’m sure it’s happened before but not in my 20
years in the industry. It clearly raised a red flag for me.’” CAC ¶ 303.
Assuming without deciding that CWB’s allegations should not be discounted due to the
witness’s confidential status, the Court finds that CWB’s allegations do not create a strong
inference of scienter. Plaintiff does not allege that Dr. Ballantyne chose not to testify because he
knew Amarin’s public statements about Vascepa were materially false or misleading, and CWB
Further, reading Plaintiff’s allegations of scienter holistically, no strong inference of scienter
may be imputed, either. None of Plaintiff’s allegations individually raise a strong inference of
scienter, and, even when combined, Plaintiff fails to “plead facts rendering an inference of
scienter at least as likely as any plausible opposing inference.” Tellabs, 551 U.S. at 323–29.
Rather, it is more plausible to infer from the totality of Plaintiff’s allegations that, at most,
Amarin executives were simply overly optimistic about the success of the ANCHOR trial and the
likelihood of FDA approval for the ANCHOR indication. See Rahman, 736 F.3d at 247.
Therefore, Plaintiff’s 10b-5 claim fails as a matter of law for failure to sufficiently allege
Because Plaintiff’s 10b-5 claim fails to sufficiently allege either a material false or
misleading statement or that Defendants acted with scienter, Count One of the CAC must be
dismissed for failure to state a claim.28
c. Count Two
himself acknowledges that he’s “sure it’s happened before” that a principal investigator would
not present his or her study’s results before the AdCom.
Defendants also argue that their risk disclosures negate an inference of scienter. See Defs.’
Br. at 24–25. However, Defendants do not cite to any cases in this circuit for that proposition,
and the Court is unable to find authority within the circuit addressing the existence and content
of risk disclosures in connection with scienter analysis. Rather, case law in this circuit appears to
address risk disclosures in the context of the applicability of the safe harbor to forward-looking
statements. See, e.g., In re Anadigics, Inc., Sec. Litig., No. CIV.A. 08-5572 MLC, 2011 WL
4594845, at *24 n.7 (D.N.J. Sept. 30, 2011) aff'd sub nom. In re Anadigics, Inc. Sec. Litig., 484
F. App'x 742 (3d Cir. 2012); Bldg. Trades United Pension Trust Fund v. Kenexa Corp., No.
CIV.A. 09-2642, 2010 WL 3749459, at *14 (E.D. Pa. Sept. 27, 2010). Therefore, the Court will
not consider this argument.
In a footnote of their moving brief, Defendants also argue that Plaintiff fails to plead loss
causation, another essential element of a 10b-5 action, as to Defendants’ allegedly misleading
statements about the JELIS study. See Defs.’ Br. at 20 n.6. However, the Court need not reach
this issue, as I have already found that Plaintiff’s claim is deficient as to two of the required
elements of a 10b-5 action and because the parties do not adequately argue the issue.
In Count Two, Plaintiff alleges a violation of Section 20(a) of the Exchange Act against the
Individual Defendants. “[S]uch liability ‘is derivative of an underlying violation of Section 10(b)
by the controlled person.’ Inasmuch as there cannot be Section 10(b) liability here, the individual
defendants cannot be liable” under Section 20(a). Rahman, 736 F.3d at 247 (quoting Avaya, 564
F.3d at 252). Therefore, because the Court finds that Plaintiff fails to state a claim under Section
10(b), Count Two must also be dismissed for failure to state a claim.
For the foregoing reasons, Defendants’ motion to dismiss is granted and Plaintiff’s motion to
strike is denied. Plaintiff’s Complaint is dismissed without prejudice. Plaintiff is given thirty
days to re-file his Complaint.
Dated: June 26, 2015
/s/ Freda L. Wolfson
United States District Judge
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