United States District Court, D. Massachusetts
MARK A. CORBAN, individually and on behalf of all others similarly situated, Plaintiff,
SAREPTA THERAPEUTICS, INC., CHRIS GARABEDIAN, SANDY MAHATME, and ED KAYE, Defendants.
MEMORANDUM & ORDER
TALWANI, District Judge.
before the court is Lead Plaintiffs' Motion for Relief
from Judgment Pursuant to Fed.R.Civ.P. 60(b)(2) [#103]. For
the following reasons, Plaintiffs' motion is DENIED.
putative federal securities class action was brought under Â§
10(b) of the Securities Exchange Act of 1934, 15 U.S.C. Â§
78j(b), and Rule 10b-5, 17 C.F.R. Â§ 240.10b-5.
Plaintiffs' allegations centered on allegedly false or
misleading statements issued July 24, 2013 through November
11, 2013 (the "Class Period"), regarding potential
FDA approval of eteplirsen, Defendant Sarepta Therapeutics,
Inc.'s ("Sarepta" or "the company")
lead drug candidate for the treatment of Duchenne Muscular
Dystrophy. Consolidated Class Action Complaint [#39]
March 31, 2015, the court allowed Defendants' Motion to
Dismiss [#42] Plaintiffs' Amended Complaint for failing
to allege any actionable misstatements or omissions. See Mem.
& Order [#77]. The court concluded that Plaintiffs'
allegations regarding feedback the company had received from
the FDA fell short because (1) Defendants' statements
regarding the FDA's July 2013 feedback had been
adequately qualified by disclosures that the FDA had
requested additional information "related to dystrophin
quantification and methodology" and that the FDA might
determine that "substantial additional data" would
be required for approval; (2) Plaintiffs' allegations
failed to establish that, to the extent concerns were
previously conveyed to the company, this occurred before the
challenged statements were made or that those concerns were
sufficiently strong as to require disclosure; and (3)
Defendants were not under a duty to disclose all of the
specific information Plaintiffs sought. Id. at
15-18. Because the court found Plaintiffs had not met their
pleading burden under the Private Securities Litigation
Reform Act ("PSLRA") of identifying a materially
false or misleading statement or omission, the court
dismissed the Complaint. The court did not reach
Defendants' further argument that Plaintiffs had failed
to meet their burden of alleging scienter with particularity.
thereafter moved for leave to file an amended complaint.
Plaintiffs' Proposed Amended Consolidated Complaint
[#81-2] ("Proposed Amended Complaint") alleged that
statements contained in press releases issued by Sarepta on
April 14, 2014 and October 27, 2014, and a statement issued
by the FDA on October 30, 2014, demonstrated with the
requisite particularity that the FDA had indeed expressed
grave concerns to the company prior to the July 2013 meeting.
court again rejected Plaintiffs' arguments. See Order
[#96]. While the court agreed that the FDA's concerns and
demands were of such a nature as to require disclosure if
Defendants had been aware of them, the court found the new
allegations still failed to demonstrate that the FDA had
formulated its concerns and demands prior to Defendants
making the challenged statements and that Defendants were
aware of those concerns when making the challenged
statements. Id. at 2-4. Accordingly, the court
denied Plaintiffs' motion for leave to amend, and again
declined to reach whether Plaintiffs had adequately alleged
scienter under the PSLRA.
appealed from this court's orders to the First Circuit.
While that appeal was pending and before briefing had begun,
the FDA released a briefing document on January 15, 2016, in
preparation for its upcoming meeting with Sarepta regarding
the New Drug Application ("NDA") for eteplirsen.
See Pls.' Mem. Law Supp. Mot. Relief J. Ex. 3 [#104-3]
[hereinafter "FDA Briefing Document"]. On January
27, 2016, Plaintiffs filed a Motion for Relief from Judgment
Pursuant to Fed R. Civ. P. 60(b)(2) [#103], seeking remand of
the pending appeal and leave to file a Proposed Third Amended
Complaint [#104-1] that makes new allegations based on the
FDA Briefing Document.
contend that the FDA Briefing Document "presents clear
and previously unavailable evidence showing that, prior to
the Class Period, the FDA expressed material concerns to
Sarepta and made many requests for additional data about
Sarepta's eteplirsen trial that were undisclosed during
the Class Period." Pls.' Mem. Law Supp. Mot. Relief
J 2 [#104]. Plaintiffs specifically point to six statements
in the Clinical Team Leader's Memorandum to the
Peripheral and Central Nervous System Drugs Advisory
Committee, contained in the FDA Briefing Document, which
state the following:
1. "As the duration of exposure [to eteplirsen] in Study
202 increased, the [company] proposed comparing the clinical
course of treated patients to historical controls. FDA
expressed strong reservations regarding the potential
interpretability of [the company's] proposed comparison
to historical controls and the use of [the six minute walk
test] as the primary endpoint in such a historical
comparison." Proposed Third Am. Compl. Â¶ 39 [#104-1]
(quoting FDA Briefing Document 39 [#104-3]).
2. "FDA encouraged the [company] at the March 2013
meeting to conduct an adequately powered placebo-controlled
trial of eteplirsen" and that the "FDA further
stated that, at that time, comparison data from Study 202 did
not provide interpretable evidence of benefit given the
limitations of the open-label design for protecting against
bias on effort-dependent endpoints like [the six-minute walk
test].'" Id . (quoting FDA Briefing
Document 39 [#104-3]).
3. At the July 2013 meeting, the FDA "expressed
reservations about natural history controls due to the usual
difficulty in showing comparability between the study
populations in natural history studies, ' and reiterated
that [the six-minute walk test] was susceptible to bias in
the proposed natural history comparison." Id .
(quoting FDA Briefing Document 39 [#104-3]).
4. FDA explained to the company "in detail, "
during a March - meeting, that the modified intend-to-treat
analysis for Study 202 was unreasonable even for hypothesis
generation, and why Study 201 did not provide evidence of
efficacy." Id . (quoting FDA Briefing Document
5. FDA told Sarepta during the March 13, 2013 meeting that
"while we do not believe that you have adequately
characterized the quantity of truncated dystrophin produced
by eteplirsen treatment (Western blot data is not available),
the immunofluorescence data you presented suggest that a much
lower quantity of truncated dystrophin is produced by
eteplirsen treatment than is present in [Becker ...