Full opinion text
MEMORANDUM, ORDER & JUDGMENT JACK B. WEINSTEIN, Senior District Judge: Table of Contents I. Introduction...............................................................408 II. Facts and Procedural History ...............................................500 A. Plaintiffs’ Theory......................................................500 B. Consideration of Publicly Available Information ...........................500 C. Public Debate Regarding Zyprexa.......................................501 1. 1996-1999 .........................................................501 2. 2000..............................................................502 3. 2001..............................................................504 4. 2002..............................................................506 5. 2003..............................................................511 6. 2004..............................................................514 7. 2005..............................................................517 D. Off-Label Use Of Zyprexa..............................................519 E. Zyprexa Litigation and Government Investigation History..................519 1. 2001 and 2002 .....................................................519 2. 2003................................................................520 3. 2004..............................................................523 a. Formation of the Zyprexa MDL .................................523 b. Litigation and Government Investigations Expand .................523 c. Zyprexa Litigation Garners Heightened Attention From the Plaintiffs’ Bar ...............................................527 4. 2005..............................................................527 F. New York Times Articles...............................................528 G. Procedural History of this Action........................................529 III. Conversion of Motion and Standard on Summary Judgment.....................531 A. Conversion ................................................. 531 B. Summary Judgment Standard...........................................531 IV. Federal Securities Claims...................................................532 A. Law on Statute of Limitations...........................................532 B. Application of Law to Facts.............................................534 1. Inquiry Notice of Zyprexa’s Link to Diabetes..........................535 a. Public Documents and News Articles.............................535 b. Court Documents..............................................536 2. Inquiry Notice of Zyprexa’s Potential for Having “Greater Likelihood” Of Causing Diabetes Than Other Atypical Antipsychoties.....537 3. Inquiry Notice of Zyprexa’s Off-Label Marketing......................539 C. Equitable Tolling......................................................540 D. Section 20(a) Claims...................................................541 V. Maine Securities Claims ....................................................542 A. Law on Statute of Limitations...........................................542 B. Application of Law to Facts.............................................543 VI. Conclusion................................................................543 I. Introduction Zyprexa (olanzapine) is an antipsychotic drug manufactured and produced by Eli Lilly and Company (“Lilly”). It was approved in 1996 by the United States Food and Drug Administration (“FDA”) for use in the treatment of schizophrenia. In 2000, the FDA extended approval for use in the short-term treatment of acute mixed or manic episodes associated with bipolar disorder, and, in 2004, granted approval for maintenance treatment of bipolar disorder. One of Lilly’s top-selling drugs, Zyprexa has been prescribed to over twelve million people worldwide. Its sales are in the billions of dollars annually, based on prescribing physicians’ observations that it helps their patients substantially improve their lives. Litigation in federal and state courts involving Zyprexa has as plaintiffs individuals, organizations and governmental entities from all over the United States. It falls under eight categories: (1) individual plaintiff personal injury litigation, transferred to this court by the Judicial Panel on Multidistrict Litigation (“JPML”), involving approximately 30,000 individuals who were prescribed Zyprexa and claim that as a result they suffer from weight gain, diabetes and other aliments; (2) class action securities litigation involving parties who purchased Lilly stock of which the instant case is an example; (3) class action individual and third-party payer litigation involving tens of thousands of health care insurers and unions who claim that they overpaid for Zyprexa; (4) individual state and federal claims by Attorneys General of states alleging that governments overpaid for Zyprexa; (5) claims involving federal Medicaid and Medicare liens on individual personal injury recoveries, which have essentially been settled; (6) a suit by a third-party payer against the plaintiffs’ attorneys, now reportedly settled; (7) shareholder derivative suits on behalf of the corporation against corporate officials; and (8) a qui tarn action on behalf of one state for overpayment that has been dismissed. Pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated by the Securities and Exchange Commission, plaintiffs in this class action seek to recover damages for their purchasers of Lilly stocks. They allegedly sustained damages because of Lilly’s fraudulent material misrepresentations regarding Zyprexa. Those named purport to represent a class of all purchasers of Lilly’s publicly traded securities from August 1, 2002 to December 22, 2006. The Maine State Retirement System separately asserts various federal and state law claims on behalf of itself and of other states’ systems it purports to represent. Federal and Maine securities laws require plaintiffs to file suit within two years from when they knew or reasonably should have known of their claims, but no later than five years after the alleged violation. Plaintiffs filed this action on March 28, 2007. Thus their claims are barred by the statute of limitations if there was public information sufficient to place plaintiffs on inquiry notice of their claims before March 28, 2005. Allegedly, defendant Lilly and named employees misrepresented or did not disclose the link between Zyprexa and heightened blood glucose levels and diabetes as compared to other atypical antipsychotics, and they misstated or omitted notice of Lilly’s marketing of Zyprexa for off-label uses — a practice prohibited by the FDA. Plaintiffs contend that defendants’ misrepresentations and conduct was publicly disclosed for the first time by three articles published in The New York Times between December 17 and 21, 2006. Defendants moved to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the ground that the claims are time-barred under the two-year statute of limitations and that plaintiffs failed to meet the pleading requirements of the Private Securities Litigation Reform Act of 1995,15 U.S.C. § 78u-4. At the court’s direction, the motion was converted into one for summary judgment on the statute of limitations defense. Opportunity for discovery was granted. A full hearing was conducted. Concerns about Zyprexa’s adverse side effects and Lilly’s off-label promotion of the drug had been known to the many scientists, members of the legal profession and stock market advisers long before the two-year statute of limitations began to run on plaintiffs’ claims. See Parts U.B., C., D., E., infra. The plethora of publicly available information to such specialists over many years demonstrates as a matter of law that plaintiffs’ claims are time-barred. A multitude of public sources repeatedly reported to market specialists and those that followed their warnings information that plaintiffs claim defendants misstated or did not disclose. Both before and during the putative class period, the large traders were well aware of the alleged relationship between Zyprexa and adverse events such as weight gain, hyperglycemia, and diabetes through public disclosures made by Lilly, its competitors, investment analysts, published medical literature, various news media, regulatory agencies, product liability plaintiff-lawyers’ advertising, press releases, and court filed documents. The available literature also established that physicians and psychiatrists prescribed Zyprexa for off-label uses at Lilly’s suggestion; individual plaintiffs had alleged in other litigation that Lilly engaged in illegal off-label marketing, and that various government agencies were investigating Lilly for alleged off-label promotion. Under ruling law, what is referred to as “storm warnings” from information available to the stock market, place every hypothesized reasonably astute and well informed investor on notice of the need for further inquiry, beginning the running of the applicable two-year statute of limitations. See Part IV, infra. The individual unsophisticated investor’s lack of awareness is ignored; the law tilts the substantive-procedural balance against such a consumer. It applies the much-debated caveat emptor principle favoring greater and freer commerce by limiting litigation, and requiring dismissal of this case. Because plaintiffs cannot prove a primary violation of section 10(b), their derivative claims under Section 20(a) against individual defendants also fail. Absent an underlying violation of the securities laws, there can be no controlling-person liability of Lilly’s employees. II. Facts and Procedural History A. Plaintiffs’ Theory Plaintiffs allege two grounds for Rule 10b-5 liability: (1) defendants misrepresented or did not disclose the alleged “link between Zyprexa and heightened blood glucose levels and diabetes” as compared to other atypical antipsychotics, see Complaint ¶ 44; and (2) defendants misstated or omitted Lilly’s alleged “active[] marketing of] Zyprexa for illegal off-label uses,” see id. ¶ 9. They contend that three articles published in The New York Times between December 17 and 21, 2006 “publicly disclosed for the first time” Lilly’s alleged “decade-long effort to mislead the public about the link between Zyprexa and heightened glucose levels and diabetes as compared to other [atypical antipsychot-ics],” and Lilly’s alleged “activef] marketing of] Zyprexa for illegal off-label uses.” Id. ¶ 9; see In re Zyprexa Injunction, 474 F.Supp.2d 385 (E.D.N.Y.2007); Eli Lilly Said to Play Down Risk of Top Pill, N.Y. Times, Dec. 17, 2006, attached as Ex. 201 to Lilly’s Motion to Dismiss dated Oct. 9, 2007 (“Lilly’s Motion”); Drug Files Show Maker Promoted Unapproved Use, N.Y. Times, Dec. 18, 2006, attached as Ex. 202 to Lilly’s Motion; Disparity Emerges in Lilly Data on Schizophrenia Drug, N.Y. Times, Dee. 21, 2006, attached as Ex. 203 to Lilly’s Motion. The publication of these articles allegedly caused a $3.49 per share decline in Lilly’s stock price between December 17 and 22, 2006. See Complaint ¶ 9. B. Consideration of Publicly Available Information In deciding a motion to dismiss or summary judgment, a court may consider documents upon which plaintiffs relied in framing the complaint. See Rothman v. Gregor, 220 F.3d 81, 88-89 (2d Cir.2000); Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir.1991). Considered here are all documents upon which plaintiffs claim that they relied in bringing this action, including: (1) public documents pertaining to Lilly and the Defendants; (2) Lilly’s filings with the Securities and Exchange Commission (“SEC”); (3) press releases published by Lilly; (4) analyst reports concerning the Company; (5) pleadings in litigation naming Lilly as a defendant including briefing associated with the parties’ motions for summary judgment (and certain confidential exhibits filed therewith) in In re Zyprexa Products Liability Litigation, No. 04-MD-1596 [ ] (E.D.N.Y.); (6) internal Lilly documents that have been made publicly available over the internet; and (7) newspaper and magazine articles (and other media coverage) regarding Lilly, its business or any Defendant. Complaint at 1 (footnote omitted; parenthesis in original). Considered also are documents required to be publicly disclosed that have been filed with the SEC, see Rothman, 220 F.3d at 88 and matters of which a court may take judicial notice. See Leonard F. v. Israel Discount Bank of N.Y., 199 F.3d 99, 107 (2d Cir.1999). Judicial notice can be taken of prior complaints and legal proceedings, press releases and news articles and published analyst reports in determining what the market knew. See Shah v. Meeker, 435 F.3d 244, 249 (2d Cir.2006) (“Information contained in articles in the financial press may trigger the duty to investigate.”); LC Capital Partners, LP v. Frontier Ins. Group, Inc., 318 F.3d 148, 153-55 (2d Cir.2003) (taking judicial notice of prior litigation filings, press releases, articles and financial publications); In re Merrill Lynch & Co., Inc. Research Reports Sec. Litig., 273 F.Supp.2d 351, 358 (S.D.N.Y.2003) (publicly available analysts’ reports). Public documents issued by government agencies such as the Food and Drug Administration (“FDA”) may also be considered. See, e.g., Noble Asset Mgmt. v. Allos Therapeutics, Inc., No. 04-CV-1030 (RPM), 2005 WL 4161977, at *2 (D.Colo. Oct. 20, 2005) (denying motion to strike FDA guidance documents, reasoning that such public documents are related to FDA’s “process for reviewing new drug applications and that process is central to an evaluation of the claims made in this case.”); DeMarco v. DepoTech Corp., 149 F.Supp.2d 1212, 1218 (S.D.Cal.2001) (recognizing that, on motion to dismiss, a court may properly consider transcript of FDA advisory committee meeting), aff'd, 32 Fed.Appx. 260 (9th Cir.2002). The parties have created an enormous record for the instant motion. See infra section II.G. C. Public Debate Regarding Zyprexa “As in political controversy, science is, above all, an adversary process.... an arena in which ideas do battle.... ” McMillan v. Togus Regional Office, 294 F.Supp.2d 305, 317 (E.D.N.Y.2003) (quoting David Goodstein, How Science Works, Federal Judicial Center, Reference Manual on Scientific Evidence 74 (2d ed. 2000) (internal quotation marks omitted)). In the context of Zyprexa, news media, investment analysts, advocacy organizations, and product liability plaintiff-lawyers have actively reviewed the evolving medical and legal literature and offered views of various research results. This robust and public debate regarding Zyprexa’s risks and benefits began long before plaintiffs filed this action. It continues to this day. 1. 1996-1999 From the time that Zyprexa was first marketed in October 1996, its product labeling has listed diabetes mellitus, hyperglycemia, ketosis, and diabetic acidosis among the infrequent (i.e., 1/100-1/1000 patients) or rare (i.e., fewer than 1/1000 patients) adverse events observed during clinical trials. See Zyprexa Package Insert, Physicians’ Desk Reference 1512, 1515 (52d ed. 1998), attached as Ex. 259 to Lilly’s Motion. Zyprexa’s original labeling stated that weight gain was a commonly observed adverse event in clinical trials and it provided information describing the frequency and magnitude of gain observed in Zyprexa-treated test patients. Id. (“In placebo-controlled, 6-week studies, weight gain was reported in 5.6% of [Zyprexa] patients compared to 0.8% of placebo patients. [Zyprexa] patients gained an average of 2.8 kg, compared to an average 0.4 kg weight loss in placebo patients.... ”). Within one year of Zyprexa’s approval, medical literature began reporting weight gain as an adverse event. A Lilly-sponsored study reported that weight gain was one of the most commonly observed treatment-emergent adverse events (reported by at least 10% of patients in either the Zyprexa, or Risperdal, a competing drug, treatment groups). See Pierre V. Tran, et al., Double-Blind Comparison of Olanza-pine Versus Risperidone in the Treatment of Schizophrenia and Other Psychotic Disorders, 17 J. Clin. Psychopharmacology 407, 411-12 (1997), attached as Ex. 83 to Lilly’s Motion. This publication noted that, over the course of twenty-eight weeks of double-blind therapy, weight gain was statistically significantly more often reported for Zyprexa-treated patients. Id. at 412. Zyprexa-treated patients experienced significantly greater weight gain (4.1 ± 5.9 kg) than Risperdal-treated patients (2.3 ± 4.8 kg, p = 0.015). Id. at 414; see also Charles B. Nemeroff, Dosing the An-tipsychotic Medication Olanzapine, 58 J. Clin. Psychiatry 45, 48 fig. 6 (1997) (reporting mean weight gain of 12 kg at one year of treatment in patients treated with Zyprexa 12.5 mg to 17.5 mg/day), attached as Ex. 82 to Lilly’s Motion. In 1998 and 1999, several additional studies reported weight gain in patients being treated with Zyprexa. See, e.g., Sanjay Gupta, et al., Olanzapine-Induced Weight Gain, 10 Ann. Clin. Psychiatry 39 (1998) (finding that mean weight gain in patients treated with Zyprexa was approximately 11 kg following seven months of treatment), attached as Ex. 85 to Lilly’s Motion; Donna A. Wirshing, et al, Novel Antipsychotics: Comparison of Weight Gain Liabilities, 60 J. Clin. Psychiatry 358, 361 fig. 1 (1999) (reporting that over 30% of patients treated with Zyprexa gained > 10% of their baseline weight), attached as Ex. 91 to Lilly’s Motion. In November 1999, a leading psychiatry journal published the results of a comprehensive literature review revealing that mean weight increases seen among the atypical antipsychotics ranged from 4.45 kg and 4.15 kg at the high end (for clozapine and Zyprexa, respectively) to 0.04 kg for zipra-sidone (now Geodon). David B. Allison, et al., Antipsychotic-Induced Weight Gain: A Comprehensive Research Synthesis, 156 Am. J. Psychiatry 1686, 1691 (1999), attached as Ex. 87 to Lilly’s Motion. A 2000 By 2000, investment analysts were aware of the Zyprexa weight-gain literature, and pointed to this danger as Zy-prexa’s “major therapeutic liability.” Salomon Smith Barney, PFE: Details of Zeldox® Big Win at FDA (July 20, 2000), at 2 (comparing Zyprexa to Zeldox (now Geodon)), attached as Ex. 26 to Lilly’s Motion; id. at 1 (describing Zyprexa’s weight gain adverse effect as “Achilles heel”); see also Leerink Swann & Company, Trends in Psychiatric Medication Usage (June 26, 2000), at 3 (“Increasingly, psychiatrists are becoming sensitive to Zyprexa’s weight gain issue, which is perceived to be more substantial than indicated by the product’s label and some published studies.”), attached as Ex. 25 to Lilly’s Motion; SG Cowen, Pharmaceutical Therapeutic Categories Outlook (Oct. 2000), at 89 (“Our physician consultants believe that the weight gain occurs in 20-25% of patients treated with Zyprexa.”), attached as Ex. 27 to Lilly’s Motion; Banc of America Securities, October Prescription Report (Nov. 28, 2000), at 20 (noting “need for new antipsychotics that are not associated with increased cardiovascular risk factors such as weight gain”), attached as Ex. 28 to Lilly’s Motion. Also reported in 2000 was the fact that patients whose weight increased while being treated with Zyprexa gained a statistically significant greater amount of weight than those patients who gained weight when taking Risperdal. See Constance Guille, et al., A Naturalistic Comparison of Clozapine, Risperidone, and Olanza-pine in the Treatment of Bipolar Disorder, 61 J. Clin. Psychiatry 638, 639 (2000) (finding that, over a 12-week period, patients treated with Zyprexa gained 10.6 ± 7.7 kg compared to 1.7 ± 6.1 kg in Risper-dal-treated patients), attached as Ex. 94 to Lilly’s Motion; see also Tawny L. Betting-er, et al., Olanzapine-Induced Glucose Dysregulation, 34 Ann. Pharmacotherapy 865, 866 (2000) (reporting a 13 kg weight gain in a patient treated with olanzapine for a period of 14 weeks), attached as Ex. 93 to Lilly’s Motion. In December 2000, The Wall Street Journal reported that a study comparing Zyprexa’s efficacy and safety in the treatment of bipolar disease to that of the market leader, Depakote, showed that weight gain occurred in 25% of the patients who were treated with Zy-prexa, but in only 10% of the patients who received Depakote. See Thomas M. Burton, Older Treatment for Manic Illness May Be Superior, Wall St. J., Dec. 12, 2000, at Bl, attached as Ex. 141 to Lilly’s Motion. In May 2000, the FDA, with cooperation from Lilly and manufacturers of other atypical antipsychotics, undertook targeted monitoring and analysis of data regarding diabetes or hyperglycemia-related adverse events in patients using these medicines. See, e.g., Leerink Swann & Company, Research Note: Zyprexa Side Effects To Gamer Increasing Attention (Aug. 1, 2002), at 2 (‘We understand that the FDA has asked the manufacturers for information on adverse event reporting within the last six to nine months as it investigates side effects.”), attached as Ex. 42 to Lilly’s Motion. The FDA’s evaluation included “a thorough review from a number of sources, including clinical trial data, spontaneous post-marketing reports, epidemiological studies, published case series, published clinical pharmacology studies, published preclinical studies, and unpublished studies” for each atypical antipsychotic medication. See Warning Letter from U.S. Food and Drug Administration, Division of Drug Marketing, Advertising and Communications to Janssen Pharmaceutica, Inc. 2 (Apr. 19, 2004), attached as Ex. 206 to Lilly’s Motion; see also SG Cowen, Pharmaceutical Therapeutic, supra, at 89. In October 2000, Dr. Kristina Melkers-son and colleagues evaluated fasting blood glucose and fasting serum insulin levels in fourteen Zyprexa-treated outpatients who had been diagnosed with schizophrenia, schizophreniform, or schizo-affective disorder according to DSM-IV criteria. See Kristina I. Melkersson, et al., Elevated Levels of Insulin, Leptin, and Blood Lipids in Olanzapine-Treated Patients With Schizophrenia or Related Psychoses, 61 J. Clin. Psychiatry 742, 743 (2000), attached as Ex. 95 to Lilly’s Motion. Three patients were found to have elevated fasting blood-glucose levels (>108.1 mg/dL); ten were found to have elevated insulin levels. Id. at 745. Dr. Melkersson concluded that Zyprexa treatment was associated with hy-perinsulinemia and insulin resistance; she also noted that three of the patients in the study were diagnosed with diabetes. Id. at 747. During the same period, SG Cowen reported that, according to its physician consultants, “Zyprexa may impair insulin sensitivity and hinder glucose transport in some patients, although clinical studies must be performed to determine the clinical consequences of these changes.” SG Cowen, Pharmaceutical Therapeutic, supra, at 89; see also Salomon Smith Barney, PFE: Details, supra, at 2 (noting that some patients taking Zyprexa gained as much as 25-50 pounds and opining that weight gain “can precipitate disturbances in glucose metabolism (prodiabetic effect”)); Leerink Swann & Company, Trends in Psychiatric, supra, at 3 (noting that Zyprexa has also been associated with “rare, but serious, adverse effects on blood glucose metabolism”); SG Cowen, Eli Lilly: Near-Term Challenges Balance Long-Term Opportunities (Feb. 28, 2000), at 6 (noting “emerging data on Zyprexa’s adverse impact on glucose metabolism”), attached as Ex. 24 to Lilly’s Motion. 3. 2001 In February 2001, Bruce Kinon and his colleagues — including individual defendant Gary D. Tollefson — reported the results of a retrospective analysis of 573 patients receiving Zyprexa treatment and 103 patients receiving the first generation anti-psychotic, haloperidol, for 39 weeks or more from a Lilly clinical trial of 1996 patients randomly assigned 2:1 to either Zyprexa or haloperidol. Bruce J. Kinon, et al., Long-Term Olanzapine Treatment: Weight Change and Weight-Related Health Factors in Schizophrenia, 62 J. Clin. Psychiatry 92 (2001), attached as Ex. 98 to Lilly’s Motion. The Kinon study found that the mean weight change for Zyprexa-treated patients at endpoint after a median treatment duration of 2.54 years was 6.26 kg (13.8 pounds) with a median weight gain of 5.90 kg (13.0 pounds). Id. This quantity of Zyprexa-associated weight gain was statistically significantly higher than the amount found in haloperidol-treated patients, who gained a mean of 0.69 kg (1.5 pounds) after a median treatment duration of 1.15 years (p < 0.001). Id. The study also reported that 22% of Zyprexa-treated patients gained between 10 and 20 kg, and 9% gained more than 20 kg; 52% of Zyprexa-treated patients gained greater than 7% of their body weight. Id. at 94; see also Barry Jones, et ah, Weight Change and Atypical Antipsy-chotic Treatment in Patients with Schizophrenia, 62 J. Clin. Psychiatry 41, 41-42 (2001) (reporting that 7% of Zyprexa-treat-ed patients gained >20 kg after two years), attached as Ex. 97 to Lilly’s Motion. In March 2001, at the College of Psychiatric and Neurologic Pharmacists annual meeting held in San Antonio, Texas, David Allison and colleagues reported the results of a meta-analysis of mean baseline to endpoint changes in random blood-glucose concentrations during antipsychotic treatment of schizophrenic patients in double-blind, randomized, controlled clinical trials. Poster Presentation, David B. Allison, et al., Analysis of Random Blood Glucose Concentration Data From Patients with Schizophrenia Treated with Typical and Atypical Antipsychotic Agents During Double-Blind, Randomized, Controlled Clinical Trials (Mar. 25-28, 2001) (presented at College of Psychiatric and Neu-rologic Pharmacists), attached as Ex. 261 to Lilly’s Motion. In this analysis, estimated relative hazards of developing glucose values that reached or exceeded specific thresholds (126, 140, 160, and 200 mg/dl) were compared during treatment, using Zyprexa, haloperidol, risperidone, clozapine, or a placebo. Dr. Allison found that mean random blood-glucose concentrations during treatment with Zyprexa were increased significantly more than with haloperidol (4.56 mg/dl vs. 0.22, p < 0.001) or a placebo (0.77 vs. -1.26 mg/dl, p < 0.004), not significantly more than Ris-perdal (4.51 vs. 2.58 mg/dl, p = 0.06), and significantly less than Clozaril (3.17 vs. 13.22, p < 0.001). Id. Categorical analyses of mean blood glucose levels that exceeded 126, 140, 160, or 200 mg/dl, however, did not identify any statistically significant differences between Zyprexa and any of the comparator agents. Id. In March 2001, Salomon Smith Barney issued a report that included a summary of some of the recent literature regarding atypical antipsychotics and their purported effects on glucose control. Salomon Smith Barney, PFE: Geodon and Market Profile (Mar. 1, 2001), at 5, attached as Ex. 30 to Lilly’s Motion. This report discussed Lilly’s “rejoinders” to the literature, including a “6-month study of Zyprexa v. Risperdal showfing] an equal incidence (0.6%) of diabetes onset.” Id. The analyst predicted an “ongoing debate” of the question: “Is diabetes onset associated with antipsychotics only due to weight gain, or is there some other drug induced mechanism?” Id. (emphasis in original). At the American Psychiatric Association (“APA”) conference held in May 2001, Pfizer presented data from a head-to-head trial comparing Geodon with Zyprexa. See SG Cowen, Pharmaceutical Industry Pulse. While Outlook Mixed, Better Performance Expected in H2 (July 2001), at 94, attached as Ex. 33 to Lilly’s Motion; see also Banc of America Securities, December Prescription Report (Feb. 12, 2002), at 25 (reporting results of trial), attached as Ex. 35 to Lilly’s Motion; Press Release, Pfizer, Pfizer’s New Antipsychotic Geodon Shows Significant Superiority over Zyprexa in Important Safety Measures. ... (May 8, 2001), attached as Ex. 218 to Lilly’s Motion. As reported by SG Cowen, “Geodon showed efficacy comparable to Zyprexa, with less weight gain, lipid elevations, and glucose changes.” See SG Cowen, While Outlook Mixed, supra, at 94. SG Cowen noted that because of the doses used in the trial, the “study was not a representative comparison of either drug, although this is not unusual in company-sponsored studies.” Id. Analysts from Leerink Swann & Company attended the APA Conference and reported that “[a]bstracts highlight that Zy-prexa was more likely to cause lipid and glucose metabolic abnormalities than either Pfizer’s Geodon or Janssen’s Risper-dal. Another abstract highlighted the greater weight gain seen with Zyprexa versus Geodon.” Leerink Swann & Company, Shrink-Wrap: Highlights from the American Psychiatric Association Conference (May 16, 2001), at 3, attached as Ex. 31 to Lilly’s Motion. The analysts went on to explain that, in the experience of their consultant, who participated in Janssen’s clinical trials, average weight gain approximates 25-30 pounds, with a more significant increase in 15-20% of patients on [Zyprexa]. Perhaps more than 50% of patients on Zyprexa maintenance therapy meet National Institute of Health guidelines for being overweight as opposed to less than 10% for Geodon and aripiprazole [later known as Ability]. Leerink Swann & Company, Shrink-Wrap, supra, at 3; see also Prudential Financial, Eli Lilly: Coverage Initiated with a Hold Rating (July 17, 2001), at 16 (noting that weight gain is Zyprexa’s “single biggest side effect” and that “[i]n up to 20% of patients, a weight gain of 20-45 pounds can occur”), attached as Ex. 34 to Lilly’s Motion; Merrill Lynch, Geodon: Physicians Indicate a Potential Calm Before the Storm (June 18, 2001), at 1 (noting that “Zyprexa’s primary weakness in the eyes of the physicians is weight gain ... leaving quite an opening for a new agent such as Geodon.”), attached as Ex. 32 to Lilly’s Motion; Deutsche Bank, Reflec tions on Risperdal — Thoughts Following Conference Call with Psychiatrists (Feb. 9, 2001), at 3 (comparing Geodon (originally called Zeldox) with Zyprexa), attached as Ex. 29 to Lilly’s Motion. Despite these concerns, Leerink Swann’s consultants considered Zyprexa a “useful agent and expect[ed] to continue to use it in selected patients.” Leerink Swann & Company, Shrink-Wrap, supra, at 3. It is apparent that by 2001, investment analysts were aware of extensive medical literature reporting that Zyprexa presented a higher risk of weight gain than did the two newest atypicals, Geodon and Ability, and that this side effect could adversely affect sales. See, e.g., SG Cowen, While Outlook Mixed, supra, at 94. P 2002 In April 2002, the Japanese Ministry of Health, Labour and Welfare (“MHLW”) required Lilly to include information regarding diabetes and hyperglycemia in the warnings, contraindications and precautions section of Zyprexa’s product labeling in Japan. News of the Japan label change was widely reported in news articles and trade journal articles. See, e.g., Richard Woodman, Britain Alerts Doctors over Lilly’s Zyprexa, Reuters, May 3, 2002, attached as Ex. 151 to Lilly’s Motion; Jeff Swiatek, Lilly’s Stock Rallies Despite Dour Reports; Many Investors Expected Worse; '03 Promising, Indianapolis Star, Apr. 16, 2002, at 423, attached as Ex. 146 to Lilly’s Motion; AFX News Limited, Lilly (Eli) & Cost Quarter Results (Apr. 15, 2002), at 452, attached as Ex. 148 to Lilly’s Motion; Lilly, 4/15/02 Conf. Call Tr., at 14, attached as Ex. 14 to Lilly’s Motion; Lilly (Eli) & Co. 1st Quarter Results, Regulatory News Service, Apr. 15, 2002, at 2, attached as Ex. 149 to Lilly’s Motion; Lilly Announces Firsh-Quarter Earnings per Share of $.58, Bus. Wire, Apr. 15, 2002, attached as Ex. 207 to Lilly’s Motion; Lilly, 10/23/02 Conf. Call Tr., attached as Ex. 16 to Lilly’s Motion; Corrected — Lilly Sees Japanese Warning on Zyprexa After Deaths, Reuters, Apr. 15, 2002, attached as Ex. 145 to Lilly’s Motion; FDC Reports, Lilly Foresees No Zyprexa Diabetes Warning in U.S.; Pfizer Sees Opening, The Pink Sheet, Apr. 22, 2002, at 23 (reporting that Lilly expects updated Japanese labeling for Zyprexa to include a contraindication for patients with diabetes or a history of diabetes), attached as Ex. 150 to Lilly’s Motion. References to the Japanese label change for Zyprexa continued to appear in the trade literature for months. See, e.g., FDC Reports, Lilly Expects Zyprexa Sales To Flatten During Bristol Abilify Launch in Qlp, The Pink Sheet, Oct. 28, 2002, at 24 (“One element of uncertainty around Zyprexa’s safety profile is its effect on glucose levels, particularly in diabetic patients. In Japan, Zyprexa was recently relabeled to add a contraindication against use in patients with diabetes or a history of diabetes after report of severe hyperglycemia and death from diabetic coma.”), attached as Ex. 158 to Lilly’s Motion; FDC Reports, Zyprexa Will Not Be “Singled Out” for Diabetes Label Change, Lilly Says, Health News Daily, Oct. 24, 2002 (“Zyprexa’s Japanese labeling was recently revised to add a contraindication against use in patients with diabetes or a history of diabetes after reports of severe hyperglycemia and death from diabetic coma.”), attached as Ex. 157 to Lilly’s Motion. Lilly communicated the news from Japan in its quarterly reports that year. See Lilly IQ 2002 Form 10-Q (filed 5/13/02), at 9 (reporting that “in April the Ministry of Health Labor and Welfare in Japan specified a label change for Zyprexa in the Japanese market to include a contraindication in patients with diabetes or a history of diabetes.”), attached as Ex. 1 to Lilly’s Motion. Lilly also discussed the Japanese label change during the April 15, 2002 earnings conference call with security analysts. See Lilly, 4/15/02 Conf. Call Tr., at 5, attached as Ex. 14 to Lilly’s Motion. Some investment advisers found the Japanese labeling change “troubling.” See Lehman Brothers, Earnings Review (Apr. 15, 2002), at 2, attached as Ex. 37 to Lilly’s Motion. Many did not. See, e.g., Goldman Sachs, Prescription Trend Monitor (Apr. 18, 2002), at 11, attached as Ex. 38 to Lilly’s Motion. As an analyst from Goldman Sachs explained: In our opinion, this is not a new issue for atypical antipsychotics, and all companies in this market have provided data with regard to diabetic complications to FDA some time ago. Based on the risk/reward profile of schizophrenia and the product’s large safety database in the US, we remain comfortable with our estimates for the class and Zyprexa specifically. Id.; see also Leerink Swann & Company, Xigris and Manufacturing Remain Thoms (Apr. 15, 2002), at 2 (“Zypexa’s side effects of weight gain and diabetes are well known in clinical practice, but are not prominent in product labeling.”), attached as Ex. 36 to Lilly’s Motion; JP Morgan, Highlights from the JP Morgan Psychiatric Symposium (May 17, 2002), at 5 (noting that JP Morgan Psychiatric Symposium panelist, Dr. Jeffrey Lieberman, expressed the belief that “the label change in Japan was an exception because the Japanese have a higher diabetes risk to begin with and the regulatory environment there has a very low threshold for adverse events,” that the panel believed that the causal risk of developing diabetes “can only be confirmed by conducting prospectively designed clinical studies,” and that “the FDA has been collecting actual use data on this issue from all manufacturers for the past couple of years”), attached as Ex. 39 to Lilly’s Motion. In April 2002, the United Kingdom’s Medicines Control Agency Committee on Safety of Medicines (“MCA”) reported in its newsletter, Current Problems in Phar-macovigilance, that Zyprexa “can adversely affect blood glucose” and that the product label for Zyprexa sold in the U.K. had been amended “to include- appropriate statements regarding diabetes .... ” See Medicines Control Agency Committee on Safety of Medicines, 28 Current Problems in Pharmacovigilanee 3 (Apr. 2002), attached as Ex. 112 to Lilly’s Motion. The publication states: Olanzapine (Zyprexa), an atypical an-tipsychotic indicated for the treatment of schizophrenia, can adversely affect blood glucose. Forty reports of hyperglycemia, diabetes mellitus or exacerbation of diabetes have been received in the UK. Four were associated with ke-toacidosis and/or coma including 1 with a fatal outcome.... [T]he product information for olanza-pine has been amended to include appropriate statements regarding diabetes as well as the very rare reports of ketoaci-dosis. The product information for olanza-pine recommends that in diabetics and patients with risk factors for diabetes mellitus, appropriate clinical and blood glucose monitoring is conducted. Id. (emphasis in original). This document was available on the MCA’s website at www.mca.gov.uk at publication. Developments were reported by investment news services, such as Reuters. See, e.g., Richard Woodman, Britain Alerts Doctors over Schizophrenia Drug, Reuters, May 3, 2002, attached as Ex. 152 to Lilly’s Motion; Leerink Swann & Company, Update on the SOBP and APA Annual Meetings (May 29, 2002), at 1, attached as Ex. 40 to Lilly’s Motion; Prudential Financial, Highlights from the Prudential Securities Healthcare Group (Oct. 30, 2002), at 19-20, attached as Ex. 45 to Lilly’s Motion. Both the Japan and U.K./EU label changes were a matter of public record by mid-2002. The World Health Organization also published information regarding the U.K. and Japan label changes for Zyprexa in 2002. See Olanza-pine; Risk of Hyperglycaemia, WHO Pharm. Newsletter 3, 5-6 (2002), attached as Ex. 101 to Lilly’s Motion. As analysts from Leerink Swann pointed out in May 2002: The metabolic side effects of Zyprexa ... (weight gain, elevated blood sugar, and high lipid levels) are real and relatively widespread, according to our consultants. Awareness of these issues is gradually gaining more attention in the U.S. physician community following recent re-labeling of the product in Japan and England. Given the body of data supporting Zyprexa’s efficacy, the product’s usage will likely to [sic] continue to grow in the near term, unless the FDA meaningfully alters Zyprexa’s labeling, although usage could decelerate in the longer term. Leerink Swann & Company, Update on the SOBP and APA Annual Meetings (May 29, 2002), at 1 (emphasis added), attached as Ex. 40 to Lilly’s Motion. In 2002, additional contributions were made to the medical literature regarding atypical antipsychotics and diabetes-related adverse events. Several epidemiological studies conducted on large samples throughout the United States, the United Kingdom and Canada appeared in the published literature. Many of these studies reported increased diabetes risk in association with Zyprexa. Due to significant methodological limitations, however, they did not resolve the issue of whether Zy-prexa caused or contributed to the development of diabetes. The literature continued to report Zyprexa’s weight gain effect. See Geeta Anand & Thomas M. Burton, Drug Debate: New Antipsychotics Pose a Quandary for FDA Doctors — Eli Lilly’s Big Seller, Zyprexa, Can Help Schizophrenics; Is it Linked to Diabetes?— Warnings Abroad, Not in U.S., Wall St. J., Apr. 11, 2003, at 1-2, attached as Ex. 160 to Lilly’s Motion; Jonathan M. Meyer, A Retrospective Comparison of Weight, Lipid, and Glucose Changes Between Risperi-done- and Olanzapine-Treated Inpatients: Metabolic Outcomes After 1 Year, 63 J. Clin. Psychiatry 425, 427 (2002), attached as Ex. 108 to Lilly’s Motion. In April, the American Journal of Psychiatry published a report by Dr. Michael Sernyak of the Veterans Administration (“VA”) in Connecticut regarding the first large retrospective epidemiological analysis of Zyprexa and diabetes-related adverse events. Michael J. Sernyak, et al., Association of Diabetes Mellitus with Use of Atypical Neuroleptics in the Treatment of Schizophrenia, 159 Am. J. Psychiatry 561 (2002), attached as Ex. 110 to Lilly’s Motion. This cross-sectional, retrospective analysis evaluated the prevalence of diabetes among patients taking antipsy-chotics and determined odds ratios for patients on atypical versus typical antipsy-chotics in a large VA database. Sernyak reported that patients treated with Zy-prexa had a greater risk of developing diabetes compared to patients treated with typical agents (odds ratio 1.11 (95% Cl 1.04 to 1.18; p < 0.002)). Id. at 564 (Table 2). When patients were analyzed by age, those younger than 40-years, those aged 40-49 years, and those aged 50-59 years, all showed a significantly higher risk of diabetes with Zyprexa than with typicals. Id. Reuters Health ran an article regarding the Sernyak analysis and highlighted the fact that Sernyak and colleagues “suggest ] that the atypical drugs, rather than precipitating the onset of diabetes, hasten its onset among those at risk.” See Reuters Health, Atypical Neuroleptics Seen To Increase the Risk of Diabetes Mellitus Somewhat (Apr. 2002) at 7, attached as Ex. 144 to Lilly’s Motion. In June 2002, the Journal of Clinical Endocrinology & Metabolism published results from the first of two bio-mechanistic studies by Lilly, which utilized the hy-perglycemic “clamp” technique. See Margaret O. Sowell et al., Hyperglycemic Clamp Assessment of Insulin Secretory Responses in Normal Subjects Treated with Olanzapine, Risperidone, or Placebo, 87 J. Clin. Endocrinology & Metabolism 2918 (2002), attached as Ex. Ill to Lilly’s Motion. The hyperglycemic clamp technique evaluates pancreatic insulin production in response to circulating levels of hyperglycemia that are maintained via a glucose infusion. Id. at 2919. Recognizing and responding to the debate regarding Zyprexa’s purported diabeto-genic effects, Lilly conducted this study to determine whether Zyprexa had acute effects on insulin production. Sowell and colleagues found no evidence that Zy-prexa decreased insulin secretory response to a prolonged hyperglycemic challenge. Id. at 2921-22. The results of the hyperglycemic clamp study did not support the hypothesis that Zyprexa directly impaired pancreatic beta-cell function. The study found an association between treatment-emergent weight gain and decreased insulin sensitivity in Zy-prexa-treated patients. Id. at 2922. This finding, however, was not confirmed in Lilly’s subsequent hyperinsulinemic, eu-glycemie clamp study, which was designed to evaluate treatment-emergent changes in insulin sensitivity. See Margaret Sowell, Evaluation of Insulin Sensitivity in Healthy Volunteers Treated with Olanzapine, Risperidone, or Placebo: A Prospective, Randomized Study Using the Two-Step Hyperinsulinemic, Euglycemic Clamp, 88 J. Clin. Endocrinology & Metabolism 5875, 5879 (2003), attached as Ex. 119 to Lilly’s Motion. In July, a review of the FDA Med-Watch data regarding Zyprexa and diabetes-related adverse events that was published in Pharmacotherapy sparked extensive media coverage about whether Zyprexa causes glucose dysregulation. See, e.g., Bill Alpert, Tech Trader: Diabetes Link Could Cool Lilly’s Hottest Drug, Barron’s, Aug. 19, 2002, at Tl, attached as Ex. 156 to Lilly’s Motion; Sarah Avery, Potential Side Effect of Eli Lilly Drug Is Unlisted on United States’ Labels, News & Observer, Aug. 17, 2002, attached as Ex. 155 to Lilly’s Motion; Ted Griffith, Eli Lilly, Pharma Stocks Under Pressure; Biotech off, CBSMarketWatch.com, Aug. 1, 2002, attached as Ex. 154 to Lilly’s Motion; Shannon Dininny, Lilly Shares Decline Amid Concerns about Zyprexa Side Effects, Associated Press, Aug. 1, 2002 (noting that analysts had raised concerns following recent publication of the Kol-ler/Doraiswamy data), attached as Ex. 153 to Lilly’s Motion; Researchers Warn Antipsychotic Drug Might Be Linked to Diabetes, Associated Press, June 28, 2002, attached as Ex. 147 to Lilly’s Motion. In their article, Dr. Elizabeth Roller, an FDA medical officer, and Dr. P. Murali Doraiswamy, a psychiatrist at Duke University, reported that a total of 237 cases of Zyprexa-associated hyperglycemia or diabetes had been identified during their review. Elizabeth Roller & P. Murali Doraiswamy, Olanzapine-Asso-ciated Diabetes Mellitus, 22 Pharmacoth-erapy 841 (2002), attached as Ex. 104 to Lilly’s Motion. They concluded that the data suggested, but did not prove, a causal relationship between Zyprexa and the development or worsening of diabetes. Id. at 849. As Dr. Doraiswamy explained to the media: “While our report does not prove a causal relationship between the drug and diabetes, doctors should be aware of such potentially adverse effects.... ” Researchers Warn Antipsychotic, supra, at 1. At least one analyst suggested that “there does seem to be a causal relationship between Zy-prexa and newly diagnosed hyperglycemia and diabetes.” Prudential Financial, Data Watch: Clinical Journal Review for Pharmaceutical Investors, July 24, 2002, at 17 (emphasis in original), attached as Ex. 41 to Lilly’s Motion. In an August 1, 2002 report, analysts from Leerink Swann offered the following assessment of the Koller/Doraiswamy study: While the authors stop short of concluding causality due to the retrospective nature of this analysis, there are clear concerns that are raised. Since time to onset of diabetes was variable in the study, with six cases within one week of treatment, it seems to indicate that weight gain alone is not likely to be the culprit. Also pointing to a drug effect is the younger than expected age of onset of approximately 40 years, as well as the improvement observed in cases where Zyprexa therapy was stopped. Leerink Swann & Company, Research Note: Zyprexa Side Effects To Gamer Increasing Attention (Aug. 1, 2002), at 1-2, attached as Ex. 42 to Lilly’s Motion. They concluded that “Zyprexa side-effect issues” would be “a major risk factor in [Lilly’s] long-term outlook,” and that “increased scrutiny could cause near-term share price volatility. ” Id. at 2 (emphasis in original). Barron’s writer, Bill Alpert offered the following analysis of the impact of the “latest Zyprexa worries” on Lilly’s bottom line, and warned of a possible off-label issue: Wall Street’s latest Zyprexa worries were fanned by the Boston-based broker Leerink Swann, which publicized recent medical reports of diabetes incidence among Zyprexa patients. Lilly itself has studied the issue, and company researchers say that blood-sugar problems also accompany other schizophrenia drugs — and indeed, accompany schizophrenia itself. Any diabetes issue should therefore not affect Zyprexa’s market share, Lilly tells doctors and investors. But the evidence to date convinces leading psychiatry researchers that Zy-prexa does pose a greater risk of diabetes than other widely prescribed — and equally effective — schizophrenia drugs. For the large number of psychiatric patients who have pre-existing risk factors for diabetes or heart disease, informed psychiatrists have started to prescribe the rival drugs of manufacturers like AstraZeneca, Johnson & Johnson and Pfizer, says Dr. John W. Newcomer of Washington University in St. Louis. From his experience as advisor to Missouri’s Medicaid program, Newcomer believes that some of Zyprexa’s continuing sales growth may reflect off label prescription by primary care doctors who are trying the drug on less severe mental illnesses. He has no direct evidence that Lilly encourages off-label use. From his Medicaid work, Dr. Newcomer is also aware that Zyprexa is priced about two-thirds higher than J & J’s Risperdal. Alpert, Tech Trader, supra, at T1 (emphasis added). On August 8, 2002, Lilly held a special conference call with stock analysts for the purpose of discussing the “recent spate of negative publicity,” including the Japanese labeling change and the Koller study. Lilly, 8/8/02 Conf. Call Tr., at 1, attached as Ex. 15 to Lilly’s Motion. During the call, individual defendant Breier made the following points regarding differences among the atypicals with respect to weight gain and diabetes related conditions: Some of the large epidemiological studies will indicate there’s no difference [in diabetes risk] among the atypicals. Some of the studies will indicate that there might be some differences. We know there are weight gain differences among these drugs. That could be one hypothesis. Id. at 4. [Tjhere is the most weight gain with clozapine, there is the second most weight gain with Olanzapine, third most with Quetiapine, third [sic] with risperi-done .... And then it gets back to are there differences among the drugs? And some studies suggest there may be, other studies suggest there are not. Id. at 11. Now, back to the issue of differences among the drugs. There are studies that demonstrate differences among the drugs. There are other studies that indicate there are not differences. Id. at 4-14. In a subsequent analyst conference call, individual defendant Lechleiter also acknowledged that Lilly “clearly own[ed] weight gain” with Zyprexa. Lilly, 10/21/04 Conf. Call Tr., at 8, attached as Ex. 23 to Lilly’s Motion. 5. 2003 Additional published studies fueled the scientific debate surrounding Zyprexa and diabetes-related adverse events in 2003. In addition to scientific data, increasing competitive pressure heightened scrutiny and debate surrounding Zyprexa’s association with diabetes-related adverse events. In June 2003, Pfizer announced the implementation of an educational program for psychiatrists and nurses that was “designed to raise the level of awareness of metabolic complications associated with some atypical antipsychotic therapies.” See FDC Reports, Pfizer Pays Back Lilly: Geodon Promotions Focus on Zyprexa Diabetes Risk, The Pink Sheet, June 2, 2003, at 18 (internal quotation marks omitted), attached as Ex. 164 to Lilly’s Motion. Trade papers in 2003 reported that Zy-prexa had received the “most attention regarding the potential for treatment-emergent diabetes.” FDC Reports, Antipsy-chotics & Diabetes: Pfizer Highlighting Differences Between Drugs, Pharm. Approvals Monthly, June 1, 2003, attached as Ex. 163 to Lilly’s Motion. In February, the Journal of Clinical Epidemiology published results from an analysis of antipsy-chotic medications and diabetes conducted by Dr. John B. Buse using data from the AdvancePCS prescription claims database. See John B. Buse, et al., A Retrospective Cohort Study of Diabetes Mellitus and Antipsychotic Treatment in the United States, 56 J. Clin. Epidemiology 164 (2003), attached as Ex. 113 to Lilly’s Motion. Buse found that, compared with the incidence in the AdvancePCS general patient population, the incidence of diabetes during exposure to antipsychotics was several times higher. See id. at 167. On April 11, 2003, The Wall Street Journal published an article, recounting the ongoing scientific inquiry about whether Zyprexa “is linked to diabetes.” Anand & Burton, Drug Debate, supra, at Al; see also Erica Goode, Leading Drugs for Psychosis Come Under New Scrutiny, N.Y. Times, May 20, 2003, at Al, attached as Ex. 162 to Lilly’s Motion. The article recognized that “[i]t is up to the FDA to decide whether Zyprexa or any competing drugs are responsible for the illnesses and deaths — and what to do about it.” Anand & Burton, Drug Debate, supra at Al. It noted that the FDA “hasn’t arrived at a definitive answer on whether Zyprexa or any other atypical antipsychotics harm some patients. The resulting quandary illustrates a difficult challenge the agency, manufacturers and physicians regularly face: what to do with otherwise effective drugs that may cause serious side effects.” Id. Investment experts’ reaction to The Wall Street Journal article was that it did not present any new concerns. As analysts from Banc of America Securities explained: Front-page article in today’s Wall Street Journal discusses concerns regarding Eli Lilly’s antipsychotic drug Zyprexa causing diabetes. Although we strongly believe in the unmatched efficacy of Zy-prexa in treating schizophrenia and bipolar mania, its side-effect profile, which includes weight gain and possibly increased insulin resistence, has been something we are aware of and believe the medical community is comfortable with the risks. Banc of America Securities, Wall Street Journal Article Regarding Zyprexa Causing Spontaneous Diabetes — These Concerns are Not New (Apr. 11, 2003), at 1 (emphasis in original), attached as Ex. 47 to Lilly’s Motion. Other information adverse to Zyprexa appeared in published literature in 2003. See e.g., Matthew A. Fuller, et al., Comparative Study of the Development of Diabetes Mellitus in Patients Talcing Risperidone and Olanzapine, 23 Pharma-cotherapy 1037 (2003) (presenting data from a retrospective analysis of the Veteran’s Integrated Service Network 10 VA database and reporting that Zyprexa was statistically significantly associated with a 37% increased risk of developing diabetes compared to risperidone), attached as Ex. 116 to Lilly’s Motion; Christoph F. Ebenbichler, et al., Olanza-pine Induces Insulin Resistance: Results From a Prospective Study, 64 J. Clin. Psychiatry 1436 (2003) (presenting data from a prospective, controlled, open study that compared body weight, fat mass, and index of insulin resistance/sensitivity in ten schizophrenic inpatients treated with Zyprexa with ten mentally and physically healthy volunteers and reporting that fasting glucose and fasting insulin levels increased significantly from baseline to endpoint in patients taking Zyprexa), attached as Ex. 115 to Lilly’s Motion. A landmark analysis conducted by Francesca Cunningham (“Cunningham study” or ‘VA study”), presented at the annual meeting of the International Society for Pharmacoepidemiology in August of 2003, highlighted the scientific debate and prompted the FDA to request a class warning on hyperglycemia and diabetes for all atypicals. See Francesca Cunningham, et al., Antipsychotic Induced Diabetes in Veteran Schizophrenic Patients, 12 Pharmacoepidemiology & Drug Safety S154 (2003), attached as Ex. 114 to Lilly’s Motion. Dr. Cunningham evaluated diabetes risk for schizophrenic patients treated with Zyprexa, Risperdal, Seroquel, and Clozaril, using data obtained from Veterans Administration pharmacy and patient-care databases for fiscal years 1999 through 2001. Id. She found that, in comparison with typical antipsychotic medications, all four atypical agents were associated with increased diabetes risk. Id. (Hazard ratios (95% Cl) were: 1.27 (1.04 to 1.56) for Zyprexa; 1.49 (1.22 to 1.81) for Risperdal, 3.34 (2.51 to 4.45) for Seroquel, and 1.48 (0.65 to 3.37) for Clozaril.). Cunningham concluded that “[r]isk of diabetes among veteran patients with schizophrenia appears to be increased with the use of [Zyprexa], [Risperdal], and [Seroquel] and should be taken into consideration in managing patients with this condition.” Id. at S154-55. News of this conclusion spread quickly. See FDC Reports, VA Antipsychotic Diabetes Risk Studies Continue; First Report Helps Zyprexa, The Pink Sheet, Sept. 1, 2003, at 3, attached as Ex. 169 to Lilly’s Motion. The impact on the market was immediate, with AstraZeneca’s stock falling nearly one percent after the Seroquel results were presented. See Reuters, As-traZeneca Slips on Worries over Seroquel Drug, Aug. 22, 2003 (reporting that As-traZeneca’s stock slipped nearly one percent following a report its $1.2 billion-a-year seller Seroquel could be linked to a higher incidence of diabetes), attached as Ex. 165 to Lilly’s Motion. The Wall Street Journal quoted remarks from Dr. William M. Glazer, associate clinical professor of psychiatry at Harvard Medical School. Glazer commented that based on the Cunningham study, “I don’t see how the FDA could give individual labeling to any drug.” Thomas M. Burton, New Antipsychotic— Drug Class Is Tied to Increase in Diabetes, Wall St. J., Aug. 22, 2003, at B4, attached as Ex. 166 to Lilly’s Motion. Investment analysts echoed this sentiment. See, e.g., Lehman Brothers, Eli Lilly Company Update (Aug. 25, 2003), at 2 (“The drive-home message of this study reconfirmed our view that Zyprexa should not be singled out in potential patient lawsuits and possible label change with diabetes contraindication among all atypical anti-psychotics.”) (emphasis in original), attached as Ex. 48 to Lilly’s Motion. On September 11, 2003, after review of the medical data, the FDA notified manufacturers of its conclusion that “the product labeling for all atypical antipsychotics [should be updated] to include a warning about additional information on hyperglycemia and diabetes,” See Press Release, Lilly, Lilly Announces FDA Notification of Class Labeling for Atypical Antipsychotics Regarding Hyperglycemia and Diabetes (Sept. 17, 2003), at 10 (emphasis added), attached as Ex. 208 to Lilly’s Motion; Burton, New Antipsychotic, supra, at B4; Erica Goode, 3 Schizophrenia Drugs May Raise Diabetes Risk Study Says, N.Y. Times, Aug. 25, 2003, at A8, attached as Ex. 168 to Lilly’s Motion; Lehman Brothers (Equity Research), Eli Lilly Company Updated (Aug. 25, 2003), at 1-4, attached as Ex. 49 to Lilly’s Motion. The FDA explained that it “recognize[d] that the relationship between atypical antipsychotic use and hyperglycemia-related adverse events is not completely understood, but epidemiological studies have suggested some increased risk.” Press Release, Lilly, Lilly Announces FDA Notification, supra. The agency also concluded that there was a “lack of evidence to support a ranking of risk [for diabetes] among the atypical antipsychotics.” Warning Letter from U.S. Food and Drug Administration, Division of Drug Marketing, Advertising and Communications to Janssen Pharmaceuti-ca, Inc. 4 (Apr. 19, 2004), attached as Ex. 206 to Lilly’s Motion. As the FDA explained, it was “unable to conclude, based on unpublished and published studies, whether the differences in results represent true differences in risk for diabetes mellitus among drugs or are due to limitations in the study designs or in some cases, the limited samples sizes examined.” Id. The class warning read as follows: WARNINGS Hyperglycemia and Diabetes Mellitus Hyperglycemia, in some cases extreme and associated with ketoacidosis or hypersmolar coma or death has been reported in patients treated with atypical antipsychotics including Zyprexa. Assessment of the relationship between atypical antipsychotic use and glucose abnormalities is complicated by the possibility of an increased background risk of diabetes mellitus in patients with schizophrenia and the increasing incidence of diabetes mellitus in the general population. Given these confounders, the relationship between atypical anti-psychotic use and hyperglycemia-related adverse events is not completely understood. However, epidemiological studies suggest an increased risk of treatment-emergent hyperglycemia-related adverse events in patients treated with the atypical antipsychotics studied. Precise risk estimates for hyperglycemia-related adverse events in patients treated with atypical antipsychotics are not available. Patients with an established diagnosis of diabetes mellitus who are started on atypical antipsychotics should be monitored regularly for worsening of glucose control. Patients with risk factors for diabetes mellitus (e.g. obesity, family history of diabetes) who are starting treatment with atypical antipsychotics should undergo fasting blood glucose testing at baseline and periodically during treatment. Any patient treated with atypical antipsychotics should be monitored for symptoms of hyperglycemia including polydipsia, polyuria, polypha-gia, and weakness. Patients who develop symptoms of hyperglycemia during treatment with atypical antipsychotics should undergo fasting blood glucose testing. In some cases, hyperglycem