Metzler Asset Mgmt. GMBH v. Kingsley

Facts

1. 6 Intent to deceive, manipulate, or defraud not pleaded

   "For an inference of scienter to be strong, 'a reasonable person would [have to] deem [it] cogent and at least as compelling as any opposing inference one could draw from the facts alleged.' "

2. 6 Intent to deceive, manipulate, or defraud not pleaded

   The complaint alleges that Sandrock made this statement before Biogen's October announcement of the PML-related death, and the plaintiffs do not contend that any of the individual defendants knew about that death before Sandrock made this statement. The plaintiffs nevertheless contend that the District Court erred in concluding that the complaint failed adequately to allege that Sandrock made the statement with the "intentional or willful" design to deceive investors.

3. 6 Intent to deceive, manipulate, or defraud not pleaded

   To make this case, the plaintiffs point out that, in August and September of 2014, Dr. Ben Thrower, the medical director at the Shepherd Center in Atlanta, notified Keith Ferguson, the company's senior sales director, and Eric Hall, the medical science liaison for Biogen, that his research showed that patients who were taking Tecfidera had a higher risk of developing low lymphocyte counts than Biogen had originally disclosed. The complaint further alleges that, for this reason, Dr. Thrower chose to discontinue Tecfidera prescriptions for approximately 200 of his patients and to stop issuing new prescriptions for the drug. The complaint also alleges that he told Ferguson and Hall about this development.

4. 6 Intent to deceive, manipulate, or defraud not pleaded

   And thus, the allegations regarding Sandrock fail to establish a "strong inference" of scienter as to even him, let alone as to any individual defendant.

5. 6 Intent to deceive, manipulate, or defraud not pleaded

   By April of 2015, according to the complaint, Biogen had already disclosed the PML death and updated the drug's label to account for the increased understanding of its risk.

6. 6 Intent to deceive, manipulate, or defraud not pleaded

   But, we find no basis for concluding that any of these statements permit us to infer the necessary intent to deceive that could suffice to create the "strong inference" of scienter that the PSLRA requires.

7. 6 Intent to deceive, manipulate, or defraud not pleaded

   We first address the January 29, 2015 statement by Kingsley that "Tecfidera [was] on track to become the most prescribed therapy for MS worldwide." The plaintiffs argue that this statement was misleading and creates the "strong inference" of scienter on Kingsley's part, because at the time of the statement, Kingsley knew about both the PML death and about Tecfidera's declining sales and discontinuation rates.

8. 6 Intent to deceive, manipulate, or defraud not pleaded

   At the time that Kingsley made the statement, however, Biogen had already disclosed to the public the news of the PML death, had already changed the drug's label, had already publicized that it expected the drug's growth rate to "slow," and had already disclosed that the drug's discontinuation rates were higher than expected.

9. 6 Intent to deceive, manipulate, or defraud not pleaded

   Yet, the complaint alleges no facts that are illuminating in that regard.