Khanna v. Ohr Pharmaceutical, Inc. et al

Filing 81

ORDER: For the reasons stated above, Plaintiffs' motion for leave to amend [dkt. no. 76] is denied, and Plaintiffs' claims are dismissed with prejudice. The Clerk of the Court shall mark the action closed and deny all pending motions as moot. SO ORDERED. (Signed by Judge Loretta A. Preska on 11/16/2020) (va)

Case 1:18-cv-01284-LAP Document 81 Filed 11/16/20 Page 1 of 7

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
GEORGE LEHMANN and INSURED
BENEFIT PLANS, INC.,
Individually and on Behalf of
All Others Similarly Situated,
Plaintiffs,

18 Civ. 1284 (LAP)

-against-

ORDER

OHR PHARMACEUTICAL INC., JASON
SLAKTER, SAM BACKENROTH, and
IRACH TARAPOREWALA,
Defendants.
LORETTA A. PRESKA, Senior United States District Judge:
Plaintiffs George Lehmann and Insured Benefits Plans, Inc.
(together, “Plaintiffs”) bring this putative securities class
action against Ohr Pharmaceutical, Inc. (the “Company”), Jason
Slakter, Sam Backenroth, and Irach Taraporewala (collectively,
“Defendants”).

Plaintiffs assert securities fraud claims under

Sections l0(b) and 20(a) of the Securities Exchange Act of 1934
and under Securities and Exchange Commission Rule l0b-5.

On

September 20, 2019, this Court granted Defendants’ motion to
dismiss those claims.
2019 [dkt. no. 71].)

(See Opinion & Order, dated Sept. 20,
On October 9, 2020, the Court of Appeals

affirmed that dismissal by Summary Order but remanded the case
“to make a determination on the record [about] whether to grant

1

Case 1:18-cv-01284-LAP Document 81 Filed 11/16/20 Page 2 of 7

Plaintiff-Appellants leave to file a second amended complaint.”
(See Summary Order, dated Oct. 9, 2020 [dkt. no. 74].)
Following the Court of Appeals’ remand, Plaintiffs filed a
letter seeking leave to file a second amended complaint or,
alternatively, leave to file a motion to amend.

(See Letter

from Richard W. Gonnello (“Plaintiffs’ Opening”), dated Oct. 23,
2020 [dkt. no. 76].)

Defendants, on the other hand, asked the

Court to modify its prior decision to include an explanation for
its denial of leave to amend.

(See Letter from Aurora Cassirer,

dated Oct. 23, 2020 [dkt. no. 77].)

Defendants opposed

Plaintiffs’ pre-motion letter, (see Letter from Aurora Cassirer
(“Def. Opposition”), dated Oct. 28, 2020 [dkt. no. 78]), and
Plaintiffs replied in further support of their pre-motion
letter, (see Letter from Richard W. Gonnello (“Plaintiffs’
Reply”), dated Oct. 29, 2020, [dkt. no. 79]).
The Court will construe these letters as a motion seeking
leave to amend further the Complaint, Defendants’ opposition to
the motion, and Plaintiffs’ reply in further support of their
motion.

For the reasons stated below, Plaintiffs’ motion for

leave to amend is DENIED, and their claims are dismissed with
prejudice.

2

Case 1:18-cv-01284-LAP Document 81 Filed 11/16/20 Page 3 of 7

I.

Background
The Court assumes the parties’ familiarity with the facts,

which the Court recounted at length in its Order dismissing the
Amended Complaint.

(See Opinion & Order at 2-5.)

To summarize briefly, Plaintiffs allege that Defendants
made false or misleading statements in connection with the
Company’s clinical trial of Squalamine, a drug that was thought
to treat Wet Age-Related Macular Degeneration, an eye disease.
(Amended Class Action Complaint (“Am. Compl.”), dated Aug. 7,
2018 [dkt. no. 44], ¶¶ 2-3.)

After purchasing Squalamine, the

Company began developing the drug to be delivered through an
eye-drop rather than intravenously.

(Id. ¶ 4.)

The Company

tested the efficacy of this method in humans in combination with
another drug, Lucentis, in a 2012 IMPACT Trial.

(Id. ¶ 6.)

In their Amended Complaint, Plaintiffs alleged that
Defendants misrepresented Squalamine by saying it “produced
beneficial effects and significant improvement in best corrected
visual acuity.”

(Id. ¶ 6.)

More specifically, Plaintiffs point

to allegedly misleading statements or omissions relating to
three categories of the IMPACT Trial: (1) “Interim Results” that
were announced by the Company in June 2014, (id. ¶ 10); (2) the
final Classic Lesions Results of the IMPACT Trial announced in
March 2015, (id. ¶ 11); and (3) the final Occult Lesions Results
announced by the Company in May 2015, (id. at ¶ 13).
3

Case 1:18-cv-01284-LAP Document 81 Filed 11/16/20 Page 4 of 7

On September 20, 2019, the Court granted Defendants’ motion
to dismiss all of Plaintiffs’ claims.

(Opinion & Order at 2.)

The Court found that Plaintiffs failed to plead either an
actionable misrepresentation or omission (id. at 9-16) or
scienter (id. at 16-19) and dismissed Plaintiffs’ securities
fraud and Section 20(a) claims accordingly.
Following Plaintiffs’ appeal, and upon de novo review, the
Court of Appeals affirmed, finding that Plaintiffs had not met
the pleading standards under the Private Securities Litigation
Reform Act and Federal Rule of Civil Procedure 9(b).
Order at 3.)

(Summary

However, because the Court did not explain its

reasons for denying Plaintiffs’ leave to amend, the Court of
Appeals remanded the case “to determine on the record whether to
allow Plaintiffs an opportunity to replead.”
II.

(Id. at 5-6.)

Discussion

A court should freely give leave to amend “when justice so
requires.”

Fed. R. Civ. P. 15(a)(2).

Motions to amend are

ultimately within the discretion of the district court, Foman v.
Davis, 371 U.S. 178, 182 (1962), however, which may deny leave
to amend for “‘good reason, including futility, bad faith, undue
delay, or undue prejudice to the opposing party.’” Holmes v.
Grubman, 568 F.3d 329, 334 (2d Cir. 2009) (quoting McCarthy v.
Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007)).

4

Case 1:18-cv-01284-LAP Document 81 Filed 11/16/20 Page 5 of 7

The Court determines that it would be futile to allow
Plaintiffs another opportunity to amend their complaint.
Plaintiffs contend that their second amended complaint will add
new allegations, but each of the allegations that Plaintiffs
offer has already been considered by this Court or the Court of
Appeals.

Plaintiffs assert that their second amended complaint

will focus on allegedly misleading statements that were already
detailed in paragraphs 82-91 of the Amended Complaint.
Plaintiffs’ Opening at 2.)

(See

Plaintiffs argue that these

statements were misleading in light of the results of the
historical studies known to Defendants at the time, (see e.g.,
Plaintiffs’ Reply at 1), but Plaintiffs already made these
factual allegations in their Amended Complaint, (see e.g., Am.
Compl. ¶ 55).

Further, Plaintiffs appear to acknowledge that

Defendants already addressed these arguments in their motion to
dismiss briefing (see Plaintiffs’ Opening at 2 (citing
Memorandum of Law in Support of Motion to Dismiss (“Motion to
Dismiss”), dated Sept. 17, 2018 [dkt. no. 48], at 16-17, 26)),
and the Court also considered them when it dismissed the Amended
Complaint.
Plaintiffs fare no better with respect to scienter.
Plaintiffs offer that their second amended complaint will allege
that Defendants knew and had access to historical Lucentis
monotherapy studies and that Ohr’s personnel were involved in
5

Case 1:18-cv-01284-LAP Document 81 Filed 11/16/20 Page 6 of 7

these prior studies.

But, again, Plaintiffs already made these

allegations in their Amended Complaint, and the Court considered
them when it ruled on Defendants’ motion to dismiss.

(See Am.

Compl. ¶¶ 119-120; Plaintiffs’ Reply at 2 (citing Motion to
Dismiss at 15-17, 26).)

Moreover, the Court of Appeals also

considered these allegations, including Defendants’ statements
at oral argument (Plaintiffs’ Reply at 2), and found that
Plaintiffs’ assertions “that Defendants made certain statements
and were aware of a variety of information that Plaintiffs say
is inconsistent with those statements” were conclusory and
insufficient to provide a requisite strong inference of
“recklessness approximating actual intent.”

(See Summary Order

at 4.)
Accordingly, the arguments that Plaintiffs promise to
include in a second amended complaint have already been
considered, and they are insufficient to plead securities fraud.
Plaintiffs’ proposed revisions to their Amended Complaint “are
essentially recharacterizations of the claims in [the] first
amended complaint, and, thus, would suffer from the same defects
as those claims.”

Weaver v. Indymac Fed. Bank, FSB, 488 F.

App’x 522, 523 (2d Cir. 2012) (summary order) (citing Bellikoff
v. Eaton Vance Corp., 481 F.3d 110, 118 (2d Cir. 2007).

The

Court’s denial of a motion seeking leave to amend is appropriate
where, as here, the “proposed amendments [are] merely recycled
6

Case 1:18-cv-01284-LAP Document 81 Filed 11/16/20 Page 7 of 7

versions of claims which ha[ve] already fallen victim to a
motion to dismiss.”

Bellikoff, 481 F.3d at 118.

Having

considered Plaintiffs’ arguments, the Court has determined that
granting leave to amend would be futile.
III. Conclusion
For the reasons stated above, Plaintiffs’ motion for leave
to amend [dkt. no. 76] is denied, and Plaintiffs’ claims are
dismissed with prejudice.

The Clerk of the Court shall mark the

action closed and deny all pending motions as moot.
SO ORDERED.
Dated:

New York, New York
November 16, 2020
__________________________________
LORETTA A. PRESKA
Senior United States District Judge

7