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Leavitt v. Alnylam Pharmaceuticals, Inc.

United States District Court, D. Massachusetts

May 8, 2019

CARYL HULL LEAVITT, individually and on behalf of all others similarly situated, Plaintiff,
v.
ALNYLAM PHARMACEUTICALS, INC., JOHN M. MARAGANORE and MANMEET S. SONI, Defendants. TUNC TOKER, FREDERICK EDWARDS and CHARLES IAPPINI, Movants.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge

         This putative securities fraud class action is brought by Caryl Hull Leavitt (“Leavitt”) on behalf of herself and other similarly situated investors against Alnylam Pharmaceuticals, Inc., its Chief Executive Officer and its Chief Financial Officer (collectively “Alnylam”, “the Company” or “defendants”). Leavitt alleges that defendants made false and/or misleading statements regarding the efficacy and marketability of its therapeutic injection for the treatment of hereditary ATTR amyloidosis during the class period.

         Leavitt bring this putative class action pursuant to the Private Securities Litigation Reform Act (“the PSLRA”), 15 U.S.C. § 78u-4. That statute establishes a specific procedure for the appointment and approval of lead plaintiff and lead counsel in a private securities class action. See § 78u-4(a)(3). Pending before this Court are the competing motions of Leavitt, Tunc Toker (“Toker”), Frederick Edwards (“Edwards”) and Charles Iappini (“Iappini”) to be appointed as lead plaintiff and to have their respective counsel approved as lead counsel. For the following reasons, Toker will be appointed as lead plaintiff and his selected lead counsel and liaison counsel will be approved.

         I. Background

         A. The Facts

         Alnylam is a biopharmaceutical company incorporated in Delaware with its principal place of business in Cambridge, Massachusetts. The Company develops and commercializes treatments for hereditary ATTR amyloidosis which is a gene mutation that causes the build-up of certain proteins in the body’s nerves and organs. That build-up can harm the functioning of nerves and organs. The Company developed its therapeutics based on RNA interference (“RNAi”) which inhibits the formation of those disease-causing proteins. In December, 2017, Alnylam submitted to the FDA a new drug application and a marketing authorization application for Onpattro (patisiran) which is administered by intravenous injection.

         Alnylam’s stock trades on the NASDAQ Stock Market. The Complaint alleges that between February 15, 2018, and September 12, 2018 (“the Class Period”), defendants made false and/or misleading statements and/or failed to disclose that: 1) “Alnylam overstated the efficacy and safety of its Onpattro (patisiran) lipid complex injection” and 2) “as a result, Alnylam’s public statements were materially false and misleading at all relevant times”.

         In August, 2018, Onpattro was approved by the FDA. On September 12, 2018, an analyst from an institutional broker, Nomura/Instinet, reported that a document released by the FDA’s Center for Drug Evaluation and Research revealed a greater risk with respect to certain trials of Onpattro and a more limited market opportunity for the drug than previously contemplated. Specifically, the analyst indicated that the document showed the FDA’s concerns over cardiac deaths in patients treated with Onpattro and suggested that the drug be limited to the treatment of patients with polyneuropathy. Finally, the analyst stated that some comments in the document call into question the accuracy of certain claims made by Alnylam.

         After that report was published, Alnylam’s stock price fell by over 5%, from $100.35 to $94.75 per share. The Complaint alleges that as a result of that decline in market value, investors who purchased Alnylam stock during the Class Period in reliance on defendants’ false and/or misleading statements suffered significant losses.

         B. Procedural History

         In September, 2018, Leavitt filed this Complaint in the United States District Court for the Southern District of New York. Shortly thereafter, notice of this putative securities fraud class action was published pursuant to the PSLRA on GlobeNewswire, a global business-oriented press release distribution service with substantial operations in North America. 15 U.S.C. § 78u-4(a)(3)(A)(i). In late November, 2018, the case was transferred to this Court. A few days later, putative class members Toker, Leavitt, Edwards and Iappini filed their respective motions to be appointed lead plaintiff pursuant to the PSLRA. Id.

         In December, 2018, Toker and Edwards filed oppositions to the motions of the other putative class members. Iappini filed a notice in support of Toker as presumptively the most adequate plaintiff under the PSLRA and in opposition to Edwards’s motion for appointment as lead plaintiff. Leavitt filed no opposition to the motions of the other putative class members, thereby ostensibly conceding that she is not presumptively the most adequate plaintiff under the PSLRA. The Court therefore analyzes only whether Toker or Edwards should be appointed as lead plaintiff in this matter.

         II. Motion to Appoint Lead Plaintiff Under the PSLRA

         A. Legal Standard

          Under the PSLRA, the Court must appoint as lead plaintiff the purported class member or class members that it determines “to be most capable of adequately representing the interests ...


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