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IN RE BRISTOL-MYERS SQUIBB SECURITIES LITIGATION

August 17, 2005.

IN RE BRISTOL-MYERS SQUIBB SECURITIES LITIGATION.


The opinion of the court was delivered by: STANLEY CHESLER, Magistrate Judge

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] MEMORANDUM OPINION

This matter comes before the Court on the Motion for Summary Judgment, pursuant to Federal Rule of Civil Procedure (" Fed.R.Civ.P.") 56, of Defendant Bristol-Myers Squibb Company ("BMS" or "the Company") and individual defendants Peter R. Dolan ("Dolan"), Charles A. Heimbold, Jr. ("Heimbold") and Peter S. Ringrose ("Ringrose"). Lead Plaintiff ("Plaintiff") is the LongView Collective Investment Fund of the Amalgamated Bank ("Long View"). Pursuant to Orders entered by the Court on November 29, 2001 and July 1, 2004, the Court has certified a class of all purchasers of BMS stock (the "Class") between November 8, 1999 to April 19, 2000 ("First Class Period") and March 22, 2001 to March 20, 2002 ("Second Class Period"), and has appointed LongView as representative of the Class. For the reasons detailed below, Defendants' Motion will be granted in part and denied in part.

Also decided in this Opinion and the accompanying Order are Plaintiff's Motion to Strike Material from the Summary Judgment Record, filed on May 13, 2005 and Plaintiff's Appeal of Judge Hughes's Order and Opinion denying leave to file a Third Amended Consolidated Class Action Complaint, filed on May 12, 2005. For the reasons discussed below, the Appeal and the Motion will both be denied. TABLE OF CONTENTS

 I. BACKGROUND

  A. The Parties

  B. Vanlev's Inception and the Early Clinical Trials

  C. Results of the All African-American Study.

  D. Communication with the FDA prior to Filing the Vanlev NDA

  E. Public Communications Regarding Vanlev and the Early Clinical Trials

  F. Submission of the Vanlev NDA to the FDA

  G. BMS Withdraws the Vanlev NDA: The End of the First Class Period

  H. The OCTAVE Protocol: The Start of the Second Class Period

  I. Unblinded OCTAVE Data.

  J. Disclosure of OCTAVE and OVERTURE Data to the Public

 II. PROCEDURAL HISTORY

  A. Rule 72.1(c)(1)(A) Appeal

  B. The Challenged Statements

 III. DISCUSSION

  A. Standard of Review

  1. Summary Judgment

  2. Section 10(b)

  3. The Applicability of the PSLRA

  B. Materiality, Loss Causation, and the "Truth" Defense

  1. Materiality

  2. Loss Causation

  a. Loss Causation in the First Class Period

  b. Loss Causation in the Second Class Period

  3. The "Truth" Defense

  C. Statements in the First Class Period: November 8, 1999 through April 19, 200

  1. Puffery and Forward Looking Statements

  2. Scienter

  a. Motive and Opportunity to Commit Fraud in the First Class Period

  b. Conscious Misbehavior or Recklessness in the First Class Period

  c. Statements in the First Class Period Directly Attributable to Defendants

  d. Statements by Weber, Black, Ferdinand and Dahlöf

  D. Statements in the Second Class Period: March 22, 2001 through March 20, 2002

  1. "Safe Harbors" for Forward Looking Statements

  2. Scienter

  a. Conscious Misbehavior (or Recklessness, Statement Sixteen only)

  i. The Seidenberg Memo

  ii. BMS Meetings with the FDA Regarding Angioedema

  iii. Vanlev as a Treatment for Heart Failure iv. Scienter in the Second Class Period, Conclusions

  E. Individual Liability of Defendants Dolan, Heimbold and Ringrose

  1. Section 20(a) Liability

  2. 10b-5 Liability

  F. Plaintiff's Motion to Strike Portions of the Summary Judgment Record

 IV. CONCLUSION
I. BACKGROUND
  The following facts have been distilled, in part, from Plaintiff's Statement Pursuant to Rule 56.1 ("Pl.'s 56.1"). Elements of that statement, which are immaterial or argumentative have been omitted. Indeed, large portions of Pl.'s 56.1 are inappropriately argumentative. The Court will not, however, entertain Defendants' suggestion that Pl.'s 56.1 not be considered at all. See Reply at 28-29. The Court is mindful that the Rule 56.1 Statement is not the proper forum for argument and has disregarded arguments contained therein. Alleged facts which are contested by Defendants are noted as such.

  I.A. The Parties. Plaintiff's case is based upon sixteen statements made by BMS, individual doctors not employed by BMS, and by the individual Defendants. Each statement is related to a drug developed by BMS called Vanlev, the subject of a New Drug Application ("NDA") filed on December 20, 1999. Plaintiff claims that Defendants violated Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78(j)(b) and 78(t)(a), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5. It is alleged that Defendants' knew or were reckless in not knowing, at the time the statements were made, that they were false or misleading. The sixteen statements challenged allegedly caused BMS stock to be artificially inflated and upon corrective disclosure allegedly caused the stock to lose significant value (at the end of the First and Second Class Periods).

  Through its divisions and subsidiaries, BMS produces and distributes pharmaceuticals, consumer medicines, nutritionals, medical devices and beauty care products. PX 2:4 (Final Pretrial Order submitted to the Honorable John J. Hughes on December 13, 2004, Section III: "Stipulation of Uncontested Facts.")*fn1 BMS is a publicly-held company whose common stock was, and is, registered with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934. Id. at 5. BMS stock trades on the New York Stock Exchange ("NYSE") and is governed by the provisions of the federal securities laws. Id.

  The individual Defendants have each been, during one or both of the Class Periods, an officer, director or high level manager of BMS. Heimbold was Chairman of the Board of BMS from 1995 to September 2001 and served as its CEO from 1994 to May 2001. PX 2:4. Heimbold was a director of BMS from 1989 until his departure on September 12, 2001. Id. Dolan succeeded Heimbold as Chairman of the Board of BMS in September 2001 and has served as its Chief Executive Officer since May 2001. Id. Dolan was President of BMS from January 2000 to September 2001. Id. Ringrose stated in his Declaration that he served as BMS's Chief Scientific Officer from January 1997 through December 2002. DX 9 ¶ 1. Plaintiff maintains that Ringrose assumed this post in 2000, citing the Revised Pre-Trial Order. See PX 2:5. For reasons that will be discussed below, the discrepancy is immaterial. I.B. Vanlev's Inception and the Early Clinical Trials. In a meeting on September 13, 1999, the BMS Management Committee, led by Heimbold, reported that the "Blockbuster launch of Vanlev" was a "critical success factor" in BMS achieving its 2000 business plan. PX 301:OMA0099975. Plaintiff maintains that the term "blockbuster," when used in connection with a product from a major pharmaceutical company, describes a drug that achieves sales of $1 billion or more in its peak year. See Pl.'s 56.1 at ¶ 33 (citing presentation on or about February 8, 2000, given by Ringrose at Merrill Lynch's Global Pharmaceutical, Medical Device and Biotechnology Conference in New York, describing to the investor/analyst audience BMS's "six strategies for growth," and stating that a blockbuster was a product "achieving in excess of $1 billion global annual sales within three years of launch," PX 267:OMA1728618. Defendants' position is that it is immaterial whether a blockbuster is a drug with sales of $1 billion or sales of $500 million. Defendants' Memorandum of Law in Support of Summary Judgment ("Defs.' Mem.") at 12 n. 10. All things being equal, then, the Court will operate on the assumption that Ringrose's proffered definition is accurate.

  "Omapatrilat," the generic name for the compound branded as Vanlev, was the subject of an Investigational New Drug Application ("INDA") to the U.S. Food and Drug Administration ("FDA") submitted on May 18, 1995. See DX 277. BMS sought to develop Vanlev/omapatrilat for use in hypertension and, at a later date, in heart failure. Id. Omapatrilat is a vasopeptidase inhibitor, a class of drugs that simultaneously inhibit angiotensin-converting enzyme ("ACE") and neutral endopeptidase ("NEP"). Id.; PX 2:5. Clinical trials began within a year of the filing of the INDA. During the clinical trial of Vanlev, there were four cases of life-threatening angioedema, which required intubation or a tracheotomy. DX 236:OMA0309556; PX 91:OMA1432579; PX 129; PX 311. Following the first event on January 20, 1998, the third and fourth cases, requiring life-saving intubations, occurred on March 11, 1999 and April 3, 1999. PX 129; 311. The third and fourth patients were both African-American and were enrolled in an all African-American clinical trial, protocol number CV137-037, known as the "037" study, comparing Vanlev with the ACE inhibitor lisinopril. Id.

  I.C. Results of the All African-American Study. African American Women taking Vanlev experienced a greater than expected incidence of angioedema. See, infra, § III.C.2.b. The significance of this fact is discussed in greater detail below. Id. For the purpose of background, it is adequate to note that in the head-to-head comparison trial with lisinopril in African-American hypertensive patients, there were 12 cases of angioedema with Vanlev (4.0%) compared to one case with lisinopril (0.3%). PX 172; PX 181; Reply Addendum ("Add.") 5.

  I.D. Communication with the FDA prior to Filing the Vanlev NDA. Prior to filing the Vanlev NDA, BMS prepared and sent a "Safety Supplement for [Vanlev] Investigator Brochure" to investigators, and a letter to FDA, "Update to Briefing Materials." Neither of these documents used the term "intubation" or "tracheotomy." DX 279; PX 172; PX 181. Both documents stated that "Among the 5,849 subjects exposed to omapatrilat (including 1030 blacks) in the clinical development program, four subjects have had airway compromise requiring intervention. . . ." Id. The "Update to Briefing Materials" prepared for the FDA did break-out the incidence of "angioedema" in the "037" study, but gave aggregate rates for angioedema which combined the data from the hypertension and heart failure studies: "approximately 0.5% in non-blacks and approximately 2.5% in blacks." DX 279:OMA0869779.

  I.E. Public Communications Regarding Vanlev and the Early Clinical Trials. The first six challenged statements in this case, all during the First Class Period, were made at, or in connection with the American Heart Association ("AHA") Symposium in November 1999. These statements are discussed in detail below. For now, it is only important to note that, with exception of statement number five, they each reference the side effect profile and data from the early clinical trial of Vanlev. See, infra, § III.C.2.c.

  I.F. Submission of the Vanlev NDA to the FDA. On December 20, 1999, BMS submitted an NDA to the FDA for the approval of Vanlev in the treatment of hypertension. DX 171:1. The NDA included extensive information about Vanlev. In it, BMS provided the FDA with data from clinical studies involving 9,372 subjects (over 6,500 of whom were exposed to Vanlev). DX 281:2. Among other things, the NDA included an Integrated Summary of Safety ("ISS"); an Integrated Summary of Efficacy ("ISE"); detailed reports of all the clinical trials; proposed labeling; and extensive technical information on the drug. DX 276; 280; 281.

  On December 20, 1999, the day of filing, BMS requested priority review of its NDA for Vanlev. DX 171:1. According to the FDA Center for Drug Evaluation and Research, priority review is reserved for drug products that, if approved, would be a significant improvement compared to marketed products in the treatment, diagnosis, or prevention of a disease. DX 316:1. On January 3, 2000, the FDA granted BMS's request for priority review. DX 171:1.

  Upon review of the NDA, the FDA raised concerns regarding the angioedema data and how that data was reported. Specifically, in a meeting with BMS on February 11, 2000, the FDA expressed concerns about the risk of angioedema with Vanlev. The FDA had two primary concerns:
All ACE inhibitors have the potential to cause angioedema. The Division's concern is whether the angioedema associated with omapatrilat is of a greater incidence or severity than that associated with the other ACE inhibitors. The Division noted four cases of angioedema in the omapatrilat database [NDA] in which the patients were hospitalized and ventilatory assistance was required. We are not aware of similar cases in the ACE inhibitor databases [NDAs]. Additionally, we noted that the head-to-head comparator study against lisinopril in black patients in which the incidence of angioedema was 10-fold greater on omapatrilat than on lisinopril.
DX 56:OMA0004558. The FDA did not indicate at the February 11, 2000 meeting that these concerns would prohibit approval of Vanlev. DX 56. Most of the challenged statements in the First Class Period were made prior to this meeting. See, infra, § II.B.

  I.G. BMS Withdraws the Vanlev NDA: The End of the First Class Period. On April 19, 2000, BMS announced that it was withdrawing its NDA for Vanlev "in response to questions raised recently by the agency regarding the comparative incidence and severity of an infrequent side effect known as angioedema reported within the NDA database." DX 177. There is no dispute that BMS's withdrawal of the Vanlev NDA was material. PX 1 ¶ 113. On April 19, 2000, the value of BMS stock declined significantly. Defs.' Mem at 1; Opp'n at 4.

  I.H. The OCTAVE Protocol: The Start of the Second Class Period. After the withdrawal of the first Vanlev NDA, various senior managers inquired into Vanlev's continued viability. PX 54; 254. Among them, Beth Seidenberg ("Seidenberg") considered and reported on the options for further Vanlev development, including the option ultimately chosen — a large head-to-head trial comparing Vanlev to an ACE inhibitor for treatment of hypertension (later called the OCTAVE study). PX 54. Seidenberg's had concluded that the most likely outcome of such a trial was a second-line indication for Vanlev as a treatment for hypertension. Id.

  After a meeting on July 12, 2000, the FDA accepted the OCTAVE protocol designed by BMS; the primary safety hypothesis of which, was that if all patients began Vanlev therapy on a reduced dose of 10 mg, the incidence and severity of angioedema would be controlled and no worse than twice that observed with enalapril — a well known ACE inhibitor with an incidence rate of approximately 0.4%. PX 95; DX 62:OMA1241530. The final OCTAVE study protocol was formally submitted to the FDA on or about July 21, 2000. DX 60-63; PX 95. The OCTAVE protocol defined the trial as a 24-week study, but included a mandatory interim analysis of safety data upon the last patient's completion of eight weeks of treatment. PX 95. The protocol also specified that the NDA would be refiled and reviewed by FDA based on an abbreviated study report of eight-week safety data. PX 95; DX 60:OMA1322656.

  I.I. Unblinded OCTAVE Data. BMS learned of the unblinded OCTAVE results in early September 2001. Defendants' Statement of Uncontested Facts Pursuant to Local Rule 56.1 ("Defs.' 56.1") ¶ 49; DX 243:2. BMS disseminated those results pursuant to a written unblinding plan, which listed the individuals who would receive the data and when they would receive it. DX 271. Such individuals included Defendants Ringrose, Dolan, BMS senior management and BMS's outside counsel. Id. The evidence shows that BMS and senior-management, such as Bodnar, Smaldone and Seidenberg, had this information by September 9, 2001. DX 271. On December 14, 2001, BMS resubmitted the Vanlev NDA, including the OCTAVE data. DX 273.

  The unblinded OCTAVE data revealed that there were two cases of airway compromise with Vanlev (one requiring a tracheotomy and one treated with medication); the Vanlev angioedema rate was approximately 2.17%, compared to .68% for enalapril. DX 212; PX 157:OMA1796033.

  I.J. Disclosure of OCTAVE and OVERTURE Data to the Public. On March 20, 2002, BMS contacted the NYSE to advise it that BMS would be issuing two releases, at separate times, relating to VANLEV later in the day: That day BMS released information to the public regarding both OVERTURE, a study of Vanlev in heart failure patients, and OCTAVE. PX 398:NYSEBMY0001. BMS disclosed the OVERTURE results approximately five days after the results were analyzed by BMS. PX 359. It is undisputed that this was as soon as possible after the results were known to BMS. Pl.'s 56.1 at ¶ 585. OCTAVE did not prove BMS's primary safety hypothesis. DX 62:OMA1241530.

  BMS planned to release an announcement about OVERTURE at 10:15 am, and a separate announcement about OCTAVE at 2:30 pm. Id. The NYSE told BMS that both the OVERTURE and OCTAVE announcements should be released at the same time and directed BMS to provide them with copies of the press releases. Id. BMS confirmed that the OCTAVE and OVERTURE press releases were issued and provided to the appropriate news services at 9:45 a.m. at which time the NYSE halted trading of BMS stock. Id.

  Specifically, BMS disclosed that:
the safety profiles of VANLEV and enalapril were similar, except for a higher risk of a side effect known as angioedema observed in VANLEV-treated patients. . . . The most common manifestation of angioedema in patients treated with VANLEV or enalapril was face or lip swelling. More than half of all cases of angioedema required no treatment or treatment with antihistamine only (1.28% with VANLEV vs. 0.52% enalapril). In the remaining cases, patients were treated with epinephrine or steroids (0.89% with VANLEV vs. 0.17% with enalapril). Two cases of airway compromise occurred, both in VANLEV-treated patients. One of these patients experienced an anaphylactic reaction that responded promptly to treatment with epinephrine and did not require mechanical airway protection. The other patient required mechanical airway protection prior to resolution. All patients with angioedema fully recovered. The overall incidence of angioedema over 24 weeks was 2.17% with VANLEV and .68% with enalapril. With both drugs, the risk of developing angioedema was higher in black patients (5.54% with Vanlev versus 1.62% with enalapril) than in non-black patients (1.78% with VANLEV versus 0.55% with enalapril).
Id. at 1-2. Trading of BMS stock resumed in the afternoon after both OCTAVE and OVERTURE results were disclosed and BMS's stock price declined.

  On October 11, 2002 BMS announced that it received an "action" letter from the FDA on the refiled NDA. PX 377. In a press release, BMS stated that "the letter specifies the additional actions that must be taken by Bristol-Myers Squibb before the FDA can consider an approval of [Vanlev] . . . [BMS] is evaluating its options with Vanlev in light of this approvable letter." PX 377. The October 11, 2002 letter from FDA advised BMS that the Vanlev NDA was "approvable" but stated that before the NDA could be approved, it was necessary for BMS "to conduct at least one additional clinical trial to demonstrate an antihypertensive effect of [Vanlev] that is sufficient to off-set the identified risk of angioedema." Id. The FDA stated that it would consider approving the drug if BMS demonstrated a "superior antihypertensive effect of [Vanlev] in a patient population that has been unequivocally shown to be resistant to multiple other antihypertensives . . . used in combination at their highest tolerated doses." DX 274. Defendants' do not dispute that BMS never undertook such a study. See Reply Add. 5.

  II. PROCEDURAL HISTORY

  In April 2000, several actions were filed against BMS and its officers, alleging violations of federal securities law and state common law. The Honorable Garrett Brown consolidated the actions and appointed Long View Lead Plaintiff on July 24, 2000. On or about April 29, 2002, Defendants moved for Partial Judgment on the Pleadings, and on June 6, 2003, Plaintiff crossmoved for Leave to File a Second Amended Consolidated Class Action Complaint. On August 19, 2004 this Court issued an Opinion and Order ("2004 Opinion") in which, among other things, Defendants' Motion for Partial Judgment on the Pleadings was granted in part and denied in part and Plaintiff's Cross-Motion for Leave to File a Second Amended Consolidated Class Action Complaint was granted in part and denied in part. Plaintiff never filed a Second Amended Complaint, but on January 14, 2005 Plaintiff filed its Motion for Leave to File a Third Amended Consolidated Class Action Complaint. That Motion was denied by the Honorable John J. Hughes on April 24, 2005. An appeal of Judge Hughes's decision was filed on May 12, 2005. The merits of this Appeal are discussed immediately below.

  II.A. Rule 72.1(c)(1)(A) Appeal.

  Pursuant to Local Rule 72.1(c)(1)(A), Plaintiff seeks modification of the Honorable John J. Hughes's Opinion and Order, dated April 27, 2005, denying Plaintiff's Motion for Leave to Amend the Complaint ("2005 Opinion"). Plaintiff objects to Judge Hughes's ruling only with respect to three of the nineteen allegedly fraudulent statements which Plaintiff sought to include in its "Third Amended Complaint." Memorandum of Law in Support of Plaintiff's Rule 72.1 Motion at 1 ("Pl.'s 72.1 Mem.").

  Pursuant to the Federal Magistrate Act of 1968, Rule 72(a) of the Federal Rules of Civil Procedure and Local Rule 72.1, a district court may reverse the decision of a magistrate judge on a non-dispositive issue only if it is "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a); L. Civ. R. 72.1(c)(1)(A). As this Court has made clear at other stages of this litigation, under the clearly erroneous standard, "the reviewing court will not reverse the magistrate judge's determination even if the court might have decided the matter differently." In re Bristol-Myers Squibb Sec. Litig., Civ. No. 00-1990, Op. at 5 (D.N.J. June 25, 2003) (Chesler, D.J.). The reviewing court should only reverse a magistrate judge's decision when "the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Lo Bosco v. Kure Eng'g Ltd., 891 F. Supp. 1035, 1037 (D.N.J. 1995) (internal quotation omitted).

  On appeal, the district court conducts a de novo review of a magistrate judge's legal conclusions. See, e.g., Haines v. Liggett Group Inc., 975 F.2d 81, 91 (3d Cir. 1992); Lo Bosco, 891 F. Supp. at 1037. But the district court is bound to accept the factual determinations of the magistrate judge unless those determinations are "either (1) completely devoid of minimum evidentiary support displaying some hue of credibility, or (2) bear no rational relationship to the supportive evidentiary data." Haines, 975 F.2d at 92 (internal quotation omitted).

  Here, Judge Hughes denied Plaintiff's Motion upon the grounds that (1) amendment at this late stage in the proceedings would prejudice Defendants; (2) Plaintiff's Motion was unduly delayed and would further delay the trial; and (3) amendment would frustrate the heightened pleading requirements of the PSLRA. 2005 Opinion at 16.

  "Under the Federal Rules of Civil Procedure, a plaintiff is entitled to amend his complaint once; courts may grant subsequent amendments `when justice so requires.' . . . Leave to amend should be `freely given,' [but] a district court has discretion to deny a request to amend if it is apparent from the record that (1) the moving party has demonstrated undue delay, bad faith or dilatory motives, (2) the amendment would be futile, or (3) the amendment would prejudice the other party. Fraser v. Nationwide Mut. Ins. Co., 352 F.3d 107, 116 (3d Cir. 2003); see also Cureton v. Nat'l Collegiate Athletic Ass'n, 252 F.3d 267, 273-74 (3d Cir. 2001) (affirming denial of amendment where motion was filed three years after complaint was filed with no reasonable explanation, factual information underlying amendment had been known for two and a half years, and judicial efficiency and interest in the finality of the litigation would be compromised); Duffy v. Charles Schwab & Co., No. CIV. A. 98-4595 (MLC), 2001 WL 1104689, *1-2 (D.N.J. Sept. 4, 2001) (denying amendment proposed after defendant had filed for summary judgment on grounds of undue delay, prejudice, and futility).

  A court may deny a plaintiff's motion for leave to file an amended complaint on the grounds of undue delay, unexplained delay or prejudice alone. See, e.g., Lorenz v. CSX Corp., 1 F.3d 1406, 1414 (3d Cir. 1993) ("In the absence of substantial or undue prejudice, denial instead must be based on bad faith or dilatory motives, truly undue or unexplained delay, repeated failures to cure the deficiency by amendments previously allowed, or futility of amendment.") (emphasis added); Fatir v. Dowdy, No. Civ. A. 95-677-GMS, 2002 WL 2018824, *7-9 (D. Del. Sept. 4, 2002) (denying leave to amend solely on grounds of undue delay and prejudice).

  In this case, Plaintiff first argues that Judge Hughes's finding of undue delay was clearly erroneous because (1) the delay resulted from Plaintiff's decision to await the Court's ruling on Plaintiff's prior Motion for Leave to Amend and; (2) because the statements Plaintiff sought to add to its Complaint were buried in "a multi-million page document production." Pl.'s 72.1 Mem. at 7.

  But as Judge Hughes adequately explained, these reasons are insufficient: Plaintiff's filing of the Third Motion to Amend almost a year after the close of discovery and after the commencement of the final pre-trial conference constituted undue delay because Plaintiff "simply offer[s] no satisfactory reasoning as to why these statements were not included in any of the previous Amended Complaints." 2005 Opinion at 14. With the exception of one, every statement that Plaintiff seeks to add to the Complaint was available well before Plaintiff filed the Second Motion to Amend, and two of the statements were available for almost three years prior to the instant Motion to Amend.

  This Court agrees with Judge Hughes, that even considering the large number of documents in this case (the abundance of which the Court is, unfortunately, well aware), there is simply no adequate reason why Plaintiff had to wait for the Court's decision on its previous Motion to Amend before it raised the issue of these additional statements. The Motion to Amend with the additional statements could have been made as they became available (for all but one statement, this point was before the Second Motion to Amend was filed). Even the one statement that was included in a document produced a week after the Second Motion to Amend was filed, could have been brought to the attention of Defendants and the Court before the Third Motion to Amend. As Judge Hughes aptly explained:
[C]laims of Plaintiff that it was necessary to await decision on various dispositive motions or other developments in the case before seeking to add new alleged misrepresentations are illusory. The new claims could have been added after depositions of the speakers had been conducted or certainly before eight months had passed after the conclusion of fact discovery. There will always be more to `discover' and more to do in a case of this magnitude. The real issue is whether the Plaintiff class has had a full and fair opportunity to conduct discovery and adequately plead its case. The answer is a resounding yes.
2005 Opinion at 16.

  Judge Hughes's finding that Plaintiff "had previous knowledge of these statements and had ample time to amend its complaint" is not clearly erroneous. 2005 Opinion at 14. Even if delay alone is an insufficient ground upon which to deny a motion to amend, see Howze v. Jones & Laughlin Steel Corp., 750 F.2d 1208, 1212 (3d Cir. 1984), truly undue delay or delay without reasonable explanation is sufficient, especially in a case such this one, where judicial efficiency and interest in the finality of the litigation would be compromised. See e.g., Lorenz v. CSZ Corp., 1 F.3d 1406, 1414 (3d Cir. 1993); Cureton v. Nat'l Collegiate Athletic Ass'n, 252 F.3d 267, 273-74 (3d Cir. 2001).

  Besides the unexplained delay in bringing the motion to add these statements to the Complaint, which is a sufficient basis for denial of the motion, Judge Hughes also found that Defendants would be unduly prejudiced by the amendment: "[A]llowing Plaintiff to amend the Complaint at this point `deprives [the Defendants] of fair notice, possibly discovery, and the opportunity for motion practice". 2005 Opinion at 13 (quoting Wilson v. Muckala, 303 F.3d 1207, 1215-16 (10th Cir. 2002)). Judge Hughes concluded that allowing the Proposed Complaint, "at such a late date, could only result in a serious impairment of the nonmovant's ability to present its case." Id. (citing Harter v. GAF Corp., 150 F.R.D. 502, 509 (D.N.J. 1993)). Judge Hughes determined that, given the stage of the case and all the preparation, work and expense Defendants had undertaken, all with a focus on the statements currently in the case, allowing Plaintiff to amend the Complaint would "unfairly disadvantage? or deprive? [Defendants] of the opportunity to present facts or evidence that it would have offered". Id.

  Plaintiff responds, that in Plaintiff's opinion, the additional statements are similar enough to statements allowed in the case, such that additional presentation of facts of or evidence by Defendants would not be required. Pl.'s 72.1 Mem. At 10-12. But Plaintiff offers no evidence, case law or argument showing that Judge Hughes's determination of prejudice to Defendants was "clearly erroneous or contrary to law."

  Finally, Plaintiff appeals Judge Hughes's finding that the PSLRA prohibits amendment of the Complaint. Pl.'s 72.1 Mem. at 12. Specifically, Plaintiff argues that the PSLRA is inapplicable at this late stage in the case and that, even if the PSLRA were relevant, any concerns about the sufficiency of the pleadings are addressed by a futility determination. Pl.'s 72.1 Mem. at 12-21. Plaintiff also contends that the requirements of the PSLRA "should not trump the liberal pleading standards of Rule 15(a) in this context". Pl.'s 72.1 Mem. 13-17.

  The Court must agree with Judge Hughes, however, that allowing Plaintiff to amend their complaint without it being subjected to the requirements of the PSLRA "would allow it `to make an end run around the requirements of the [PSLRA].'" 2005 Opinion at 15 (quoting In re Champion Enters., Inc. Sec. Litig., 145 F. Supp. 2d 871, 877 (E.D. Mich. 2001)). The Third Circuit has been clear, that in actions filed under the PSLRA, leave to amend should not be given in a fashion that would frustrate the heightened pleading requirements of the statute. See Cal. Public Employees' Ret. Sys. v. Chubb Corp., No. 03-3755, 2004 WL 3015578, at *27 (3d Cir., Dec. 30, 2004) (affirming denial of leave to amend and noting "PSLRA's potential impact of narrowing application of [the Rule 15] standard in securities fraud cases"); see also In re AT&T Sec. Litig., Civ. A No. 00-5364 (GEB), slip op. at 12-14 (D.N.J. Apr. 6, 2004) (denying plaintiffs' request to add new actionable statements to the final pretrial order because the addition of the claims was untimely and would be prejudicial to Defendants and the claims would fail to meet the PSLRA's pleading requirements), aff'd, (D.N.J. Jun. 8, 2004). Here, it is clear that Judge Hughes's determination is clearly supported by the precedent cited and applied therein. See 2005 Opinion 15-16.

  In sum, Judge Hughes's Opinion and Order, offering not one, but three, independently valid reasons for denying Plaintiff leave to amend the complaint, is neither contrary to law nor clearly erroneous. Rather, it is exactly what this Court would have decided if it had considered the issue in the first instance. For this reason, Plaintiff's Rule 72.1 Motion will be denied, and Judge Hughes's Opinion and order dated April 27, 2005 will be affirmed.

  Since leave to file the Third Amended Consolidated Class Action Complaint will not be granted, and since the Second Amended Complaint was never filed, Plaintiff's allegations stand as asserted in the First Amended Consolidated Class Action Complaint (hereinafter "Compl.").

  II.B. The Challenged Statements

  To facilitate reference throughout this Opinion, following is a numbered list of the challenged statements as set forth in the First Amended Consolidated Class Action Complaint (each statement is preceded by the date on which it was allegedly made and the name of the speaker):
1. 11/8/1999, Weber: "As far as the side effect profile is concerned, right now as yet I have not seen any evidence that this drug [VANLEV] differs from traditional ACE inhibitors in its side effect profile." Compl. ¶ 52; PX 450:OMA1787535-536.
2. 11/8/1999, Black: "These are very impressive results from a large group of patients" and the data indicates Vanlev may be "the best choice for doctors." Compl. ¶ 53; PX 240.
3. 11/8/1999, Black further described the results as "the most compelling we've seen with any new cardiovascular agent in the past 15 years." Compl. ¶ 50; PX 241.
4. 11/8/1999, Weber: "To date, omapatrilat has been studied in more than 6,500 patients and has been generally well-tolerated, with a safety profile comparable to several leading hypertension therapies." Compl. ¶ 53; PX 241.
5. 11/29/1999, Ringrose: "If you asked a cardiologist what the ideal drug would do, VANLEV pretty much ticks all the boxes." "We have three blockbusters at the moment, but we should have three more in Plavix (an antithrombotic), Avandia (for diabetes) and Vanlev." Compl. ¶ 65; DX 41 150-51; PX 246.
6. 11/1999, Weber: "Omapatrilat [Vanlev] was well tolerated, and discontinuation rates due to adverse events were similar in the omapatrilat, lisinopril and placebo groups." Compl. ¶ 58; PX 245:OMA1124654.
7. 12/20/1999, BMS: "In placebo-controlled clinical trials, the most commonly reported side effects were headache (more common in the placebo group) dizziness, upper respiratory infection and cough." Compl. ¶ 66; DX 241.
8. 1/10/2000, BMS: "In placebo-controlled trials, the most commonly reported side effects were headache (more common in the placebo group), dizziness, upper respiratory tract infection and cough." Compl. ¶ 70; PX 247.
9. 1/13/2000, BMS: "According to Health Canada procedure, a Priority Review can be granted for a drug that treats `a serious, life-threatening or severely debilitating disease or condition when there is `substantial clinical evidence that the drug provides significantly improved efficacy or significantly diminished risk over existing therapies . . . for a disease or condition that is not adequately managed by a drug marketed in Canada.'" Compl. ¶ 73; DX 74.
10. 3/11/2000, Dr. Ferdinand: The "safety and tolerability profile of omapatrilat compares favorably with placebo . . . overall safety and tolerability profile of omapatrilat is comparable to amlodipine and lisinopril" and that the "[i]ncidence of angioedema [is] comparable with current ACE inhibitors." Compl. ¶ 83; PX 244:OMAP0050280.0033.
11. 3/12/2000, Dahlöf: Summarizing safety findings, Dahlöf stated that Vanlev was observed to have a "tolerability profile at least comparable to existing agents." Compl. ¶ 82; DX 294:OMA0002096, OMA0002108.
Second Class Period
12. 11/7/2001, BMS: "Over the next 12 months, [BMS] . . . plans to submit an unprecedented number of regulatory submissions, including global regulatory filings for five new potential blockbuster compounds." Compl. ¶ 148; DX 285; 245.
13. 11/7/2001, Dolan: "As a result of these efforts, we believe we have the products that will allow us to achieve our goal of launching three potential blockbuster products a year for several years starting in 2003 and we are hopeful that the first of these products may launch in 2002." Compl. ¶ 148; DX 285; 245.
14. 12/13/2001, Dolan: "We are optimistic about the five new medicines that we are filing for regulatory approval in a 12-month period." Compl. ¶ 150; DX 293.
15. 12/13/2001, BMS also stated that it "has submitted — or plans to submit — five new drug filings. . . . The new drug filings include Vanlev ™ (omapatrilat), which the company intends to refile with the [FDA] on December 14, 2001 for treatment of hypertension. The company hopes the FDA will approve Vanlev during the second half of 2002." Compl. ¶ 151; DX 293.
  16. 1/15/2002, Dolan reminded the market of "the record number of innovative blockbuster brands [the clinical and pharmaceutical divisions] are poised to deliver into the marketplace, among them Vanlev ™ (omapatrilat) for hypertension and heart failure. . . ." Compl. ¶ 155; PX 262:1. There is one additional statement, which falls outside of the First Class Period, November 8, 1999 to April 19, 2000, as that period was Stipulated and Ordered on November 20, 2001. In its 2004 Opinion and Order, this Court upheld as actionable a statement by Tim Cost, made on October 19, 1999. 2004 Opinion at 40 (designated in that Opinion, statement number three); Proposed Second Amended Consolidated Class Action Complaint ¶ 61. Plaintiff seeks to have the class period revised to include the statement, but Plaintiff, after having been granted leave, never filed a Second Amended Consolidated Class Action Complaint including this statement. See Plaintiff's Letter to the Court, dated August 1, 2005. As explained above, therefore, the last Complaint of record is the First Amended Consolidated Class Action Complaint — and this Complaint does not include the Cost statement. Nor does the recently filed Revised Final Pre-trial Order, docket number 320, dated June 13, 2005 contain the Cost statement, see pp. 13-16.

  But the issue is not so much that the Second Amended Complaint was never filed — the parties have proceeded on the assumption that the Second Amended Complaint controls, and in other circumstances that would be sufficient grounds to include the statement. The real issue, at this point, is that if Plaintiff had sought leave to file its Third Amended Complaint in a more timely manner, or had at least offered some reason for the delay, the Cost statement would have been included in that complaint. To permit the statement now, would undermine Judge Hughes's decision to not permit amendment. As it stands, for all of the reasons set forth in the previous section, it is too late to amend at this juncture. The statement is not permitted and there is no need to adjust the agreed upon class periods. III. DISCUSSION

  Plaintiff alleges that in the first class period Defendants misrepresented and omitted material information concerning the incidence and severity of Vanlev's angioedema side effect. In the second class period, Plaintiff alleges that Defendants repeatedly misrepresented to the market that Vanlev had the potential to be BMS's next "blockbuster" drug. The merits of Defendants' Summary Judgment Motion, which contests all of these allegations is considered below.

  III.A. Standard of Review

  III.A.1. Summary Judgment

   A party seeking summary judgment must "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1366 (3d Cir. 1996).

   In deciding whether there is a disputed issue of material fact, the Court must view the underlying facts and draw all reasonable inferences in favor of the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Pennsylvania Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact ...


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