Gillis v. QRX Pharma Ltd. (197 F. Supp. 3d 557, 2016)

United States District Court for the Southern District of New York 2016-07-06

Citations

Full opinion text

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge:

In this putative class action under the federal securities laws, lead plaintiffs Marsha Gillis, Carl Bayney, and Daniel Rehmsmeyer (collectively, “plaintiffs”) claim that the Australian pharmaceutical company QRx Pharma Ltd. (“QRX” or the “Company”) and its former CEO John Ho-laday made false and misleading statements about MoxDuo IR (“MoxDuo”), QRX’s leading drug candidate, while it was under review by the U.S. Food and Drug Administration (“FDA”).

Plaintiffs bring this lawsuit on behalf of all persons who purchased QRX American Depository Receipts (“ADRs”) between December 6, 2010 and April 23, 2014, inclusive (the “Class Period”). They allege violations of §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b), 78t(a), and the corresponding rule of the Securities and Exchange Commission, 17 C.F.R. § 240.10b-5 (“Rule 10b-5”). The United States Bankruptcy Court for this District, recognizing QRX’s Australian insolvency proceeding as a foreign main proceeding, has dismissed this case as to QRX pursuant to the resolution of that proceeding, leaving Holaday as the only defendant here.

Pending now is Holaday’s motion to dismiss plaintiffs’ Second Amended Class Action Complaint (“SAC”) for failure to state a claim, under Federal Rules of Civil Procedure 12(b)(6) and 9(b). For the following reasons, the Court grants the motion and dismisses the SAC in its entirety.

1. Background

A. The Parties

QRX is a specialty pharmaceutical company headquartered in Australia that focuses on the development and commercialization of treatments for pain management. SAC ¶ 2. Its ADRs trade over the counter in the United States. Id. From April 2007 until May 3, 2014, Holaday was QRX’s CEO and Managing Director. Id. ¶ 13. Plaintiffs are individuals who purchased QRX ADRs during the Class Period. Id. ¶¶ 10-12.

B. MoxDuo and the Combination Rule

Throughout the Class Period, QRX’s main focus was advancing MoxDuo, its lead experimental drug candidate, through the FDA approval process, so that it could be marketed and sold in the United States. See Id. ¶¶ 2-3, 74. MoxDuo is a combination of morphine sulfate and oxycodone hydrochloride. Id. ¶ 2. If approved, it would have been the first combination drug product to contain two active opioid ingredients. Id. ¶ 15. The intended purpose of the combination was to provide effective analgesia while reducing the frequency and severity of opioid-related side effects, such as nausea, dizziness, oxygen desatu-ration, and respiratory problems. Id. ¶2; Stokes Decl., Ex. 2.

Because MoxDuo combined two existing drugs, QRX was required to satisfy the FDA’s “Combination Rule” in order to gain approval. Id. ¶¶ 3,15. That rule states that “[t]wo or more drugs may be combined in a single dosage form when each component makes a contribution to the claimed effects and the dosage of each component ... is such that the combination is safe and effective for a significant population requiring such concurrent therapy.” 21 C.F.R. § 300.50(a); SAC ¶ 15.

The Combination Rule “does not specifically address the issue of combining two drugs from the same pharmacological class.” Stokes Decl., Ex. 24 (“FDA Memo”), at 12. Nor, as of the start of the Class Period, had the FDA publicly opined on how the rule would apply to a prescription dual-opioid like MoxDuo. See Id. Decades earlier, however, the FDA had set forth a more stringent standard for won-prescription drug products that combine two ingredients from the same category. See Id. at 5, 12. In a 1978 guidance document entitled OTC Drug Combination General Guidelines, the FDA stated that “active ingredients from the same therapeutic category that have the same mechanism of action should not ordinarily be combined unless there is some advantage over the single ingredients in terms of enhanced effectiveness, safety, patient acceptance, or quality of formulation.” Id.

C. Overview of Plaintiffs’ Claims

The SAC’s core allegations are that: (1) before the Class Period, the FDA privately articulated to QRX a “Superiority Requirement” that QRX had to meet in order to satisfy the Combination Rule in the novel context of a prescription dual-opioid drug, to wit, that QRX must demonstrate a safety or efficacy benefit of the combination (MoxDuo) compared to “comparable” or “equi-analgesic” doses of its components (morphine and oxycodone); and (2) QRX concealed this information and related setbacks from investors, knowing that QRX could not satisfy the Superiority Requirement. SAC ¶ 3. As result, plaintiffs claim, QRX’s optimistic statements regarding its clinical studies and the prospect of FDA approval gave investors the “false impression that QRX had a clear path to getting MoxDuo approved,” when, in reality, according to plaintiffs, it was at all times virtually certain that QRX’s New Drug Application (“NDA”) for MoxDuo would be rejected. Id.

Plaintiffs claim that QRX’s misrepresentations caused QRX ADRs to trade at artificially inflated prices throughout the Class Period. Id. ¶ 6. They allege that these misrepresentations were partially dispelled on June 27, 2012, when QRX announced that the FDA had issued a Complete Response Letter declining to approve MoxDuo at that time. Id. ¶ 62. Upon that announcement, QRX’s ADRs declined 47%, from $7.37 to $3.88 per share. Id. However, plaintiffs claim, that was “only a partial disclosure of the true state of affairs and a partial materialization of the concealed risks,” because QRX continued to conceal the true basis for the FDA’s refusal to approve MoxDuo: that QRX was required, but had failed, to satisfy the Superiority Requirement of the Combination Rule, Id.

Plaintiffs allege that the entire truth was not exposed until April 22, 2014, when, during a trading halt on QRX securities, the FDA released a memorandum (the “FDA Memo”) recommending against approval of MoxDuo because QRX had not satisfied the Superiority Requirement. See Id. ¶¶ 4, 64. According to plaintiffs, the FDA Memo also revealed that: (1) long before the Class Period, the FDA had informed QRX of the Superiority Requirement; and (2) throughout the development process, QRX had encountered setbacks stemming from its inability to satisfy that requirement. See Id. ¶¶ 4, 65. Later that day, QRX announced that an FDA Advisory Committee had voted to recommend against approval of MoxDuo. Id. ¶ 67. As a result of these disclosures, plaintiffs allege, when trading resumed on April 23, 2014, the price of QRX ADRs declined more than 83%—from $3.40 to $0.42 per share. Id. ¶¶ 5, 68-69.

D. Factual Background

1. Overview of the FDA Review Process

FDA regulations require that drug manufacturers engage in three phases of clinical (ie., human) trials before presenting a new drug to the FDA for approval. See 21 C.F.R. § 312.21. Phase I studies typically involve 20-80 volunteers. Id. § 312.21(a). They are designed to ascertain the pharmacology and safety of the drug, and, if possible, to gain early evidence of its effectiveness. Id. Phase II trials typically involve groups of “no more than several hundred subjects” and are conducted to “evaluate the effectiveness of the drug for a particular indication ... and to determine [the drug’s] common short-term side effects and risks." Id. § 312.21(b). Phase III clinical trials are even larger studies, “performed after preliminary evidence suggesting effectiveness of the drug has been obtained, [which] are intended to gather the additional information about effectiveness and safety that is needed to evaluate” whether the “overall benefit-risk relationship of the drug” supports approval. Id. § 312.21(c).

Before commencing a Phase III trial, a drug manufacturer may, but is not required to, request a Special Protocol Assessment (“SPA”) from the FDA. An SPA is a written agreement

which sets out the design and size parameters for clinical trials of a new drug, and the conditions under which the FDA would approve the drug. For the manufacturer, such an agreement minimizes development risk by providing regulatory predictability: Provided that the manufacturer follows the procedure set in the SPA and the drug [] meets the benchmarks for effectiveness set in the agreement, the FDA must approve the drug.

Amarin Pharma, Inc. v. U.S. Food & Drug Admin., 119 F.Supp.3d 196, 210 (S.D.N.Y.2015) (citing U.S. Food and Drug Admin., Guidance for Industry: Special Protocol Assessment (2002), at 2, http:// www.fda.gov/downloads/Drugs/.../ Guidances/ucm080571.pdf).

Once a pharmaceutical company has completed all three phases of clinical trials, it can submit an NDA to the FDA. See generally 21 C.F.R. § 314. The FDA may refuse to accept an NDA for a variety of technical reasons, such as that the application does not include the requisite components or was not filed in the proper format. See Id. § 314.101(d). Once the FDA has accepted an NDA, it may refuse to approve it for a variety of substantive reasons, including that “[t]here is a lack of substantial evidence consisting of adequate and well-controlled investigations ... that the drug product will have the [safety or efficacy] effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in its proposed labeling.” Id. § 314.125(b)(5).

If the FDA determines that it will not approve an NDA in its present form, it will send the applicant a Complete Response Letter (“CRL”) that describes the deficiencies in the application and, where possible, provides recommendations for achieving approval. See Id. § 314.110.

2. QRX’s Early Communications with the FDA

In January 2004, QRX met with the FDA in anticipation of filing an Investiga-tional New Drug (“IND”) application seeking permission to begin clinical trials for MoxDuo. SAC ¶ 17. At the meeting, QRX explained that the rationale behind Mox-Duo was that “the individual components were expected to act synergistically for efficacy” such that “the combination is better than the sum of the parts.” FDA Memo, at 9-10; see also SAC ¶ 17. The FDA advised that “reduced doses of opioids in combination cannot be assumed to be of clinical benefit alone.” FDA Memo, at 10; see also SAC ¶ 17.

Sometime thereafter, the FDA authorized QRX to perform clinical trials for MoxDuo, and QRX conducted two Phase II studies, Studies 020 and 021, which it later included in its NDA. See SAC ¶ 18; FDA Memo, at 11,13.

3. Study 008 and the “No Agreement” Letters

On May 1, 2009, QRX requested an SPA for the clinical protocols for Study 008. See Stokes Decl., Ex. 17 (“NAL”), at 1. That study was a double-blind Phase III trial comparing the efficacy and safety profiles of MoxDuo 12mg/8mg against component doses of morphine (12 mg) and oxycodone (8 mg), administered alone, for the management of moderate to severe post-operative pain. See FDA Memo, at 11. The study’s purpose was to “demonstrate that the individual components of Moxduo each made a contribution to the efficacy of the product.” Id.

On June 19, 2009, the FDA sent QRX a “No Agreement Letter” (the “NAL”), declining to enter into an SPA with QRX because it did not approve of QRX’s “proposed efficacy endpoint and statistical approach” for Study 008. Id. at 9; see NAL. Specifically, the FDA took issue with QRX’s proposed primary efficacy endpoint for the trial, SPID24 (¿a, measuring efficacy after 24 hours). NAL, at 1-2. It advised that:

It is incumbent on you to find a patient population that requires the additional benefit that you anticipate from your proposed formulation and demonstrate superiority of the combination over the individual components in an adequate and well-controlled study. If you cannot demonstrate a difference in treatment response beyond 24 hours, the question becomes whether there is any need for the combination.

Id. at 2. Holaday, who retained a copy of the letter in his personal files, highlighted this passage. Id.-, SAC ¶ 20.

Notwithstanding this feedback, the FDA affirmed in the NAL that, “[i]n principle, the Combination Rule would be satisfied” if MoxDuo were found to be “statistically significantly superior to each of its individual components on [an appropriate] primary endpoint” for Study 008. NAL, at 3.

On July 10, 2009, QRX submitted a second request for an SPA for Study 008. See Stokes Decl., Ex. 18, at 1; SAC ¶ 21. On August 27, 2009, the FDA responded by issuing a second No Agreement Letter, SAC ¶ 21. In it, the FDA confirmed that QRX’s revised proposed primary efficacy endpoint for Study 008, SPID48 (ie., measuring efficacy after 48 hours), was acceptable, and that QRX had adequately addressed some of the statistical issues raised in the FDA’s first letter. Stokes Deck, Ex. 18, at 1-2. It still declined to enter into an SPA with QRX, however, because QRX had not adequately described the primary efficacy analysis. Id. at 2.

On September 3, 2009, QRX submitted a third request for an SPA for Study 008. See Stokes Decl., Ex. 19, at 1; SAC ¶ 21. On October 5, 2009, the FDA notified QRX that, due to resource constraints, it would not accept the Company’s request for a third review cycle. Stokes Decl., Ex. 19, at 1; SAC ¶ 21.

QRX did not publicly disclose that it had requested, or been denied, an SPA for Study 008. See SAC ¶ 22. Nor did it disclose any of the interim feedback that it had received in the No Agreement Letters. See Id.

On November 30, 2009, QRX issued a press release announcing the commencement of Study 008. Id. In it, QRX stated that it had “incorporated input from the FDA regarding the design and statistical analysis of [the] study.” Id.

On December 6, 2010 and January 24, 2011, QRX issued press releases touting the results of Study 008, which it referred to as a “combination rule” study. See Id. ¶¶ 30, 32. QRX stated that Study 008 had met “both primary and secondary endpoints”: MoxDuo “not only demonstrated a statistically superior analgesic effect compared to component doses of morphine (p=0.02) and oxycodone (p=0.02) but, also, a favourable side effect profile despite delivering twice the opioid dose of its individual components.” Id. IT 30; see also Id. ¶ 32.

On December 6, 2010, QRX issued a press release announcing that it had completed patient enrollment for its third Phase III trial, Study 009. Id. ¶ 30. In it, QRX stated that, with the completion of that study and Study 008, the Company “believe[d] it ha[d] met the basic requirements for clinical data to enable NDA filing for MoxDuo [] as targeted for the first half CY2011.” Id. In press releases issued on January 24 and 27, 2011, QRX reiterated this statement. See id. ¶¶ 32, 34.

4.Study 022

At an “end of phase 2” meeting with the FDA in 2009, QRX asked “about the requirements to support a claim for a synergistic effect on efficacy and about demonstrating improved safety of MoxDuo compared to equianalgesic doses of morphine sulfate and oxycodone hydrochloride alone.” Id. ¶ 19; FDA Memo, at 10. The Company later designed a “dedicated [Phase III] safety study,” intended to show a safety advantage for MoxDuo. SAC ¶ 19. That study, Study 022, was a double-blind, fixed-dose comparison of MoxDuo (12 mg morphine/8 mg oxyco-done) vs. equivalent doses of morphine (24 mg) and, separately, oxycodone (16 mg). See Stokes Deck, Ex. 2, at 1.

On January 24, 2011, QRX issued a press release announcing the commencement of Study 022, the purpose of which, QRX stated, was “to compare the tolerability and safety profile of MoxDuo [] to equi-analgesic doses of either morphine or oxycodone given alone.” Id. The press release stated that QRX “expect[ed] to complete dosing in Q2 CY2011” and that the results of the study would be included in its application for marketing approval in Europe. Id.

5.QRX’s First Submission of the NDA

On July 22, 2011, QRX issued a press release announcing the initiation of its NDA filing with the FDA. See SAC ¶ 36. Holaday was quoted as stating that, with this milestone, “[the Company] continuéis] to make significant progress toward com-mercialising MoxDuo IR.” Id.

On August 25, 2011, QRX issued a press release announcing its submission of the NDA. Id. ¶ 38. The NDA included full reports from two Phase II clinical trials, Studies 020 and 021, and three Phase III clinical trials, Studies 007, 008, and 009. Id. ¶ 23. It did not include the full study report for Study 022, because the results were not yet complete. Id. In the August 25, 2011 press release, QRX stated that Study 022 would be submitted to the FDA “as part of a 2011 NDA update filing.” Stokes Decl., Ex. 6, at 2. Holaday was quoted as saying that QRX was “pleased to have met this significant NDA milestone in just four years, and looking] forward to the regulatory approval process that may enable product sales in 2012.” Id. at 1; SAC ¶ 38.

QRX later, in its 120-day safety update, submitted preliminary analyses from Study 022 to the FDA. See FDA Memo, at 13.

6.The FDA’s First Complete Response Letter

On June 25, 2012, the FDA sent QRX a CRL (the “June 2012 CRL”), declining to approve the NDA in its present form. See SAC ¶ 24; Stokes Deck, Ex. 20 (“6/25/12 CRL”). The FDA identified one deficiency with QRX’s application: It had “not provided adequate evidence to support that there is a patient population that requires treatment with Moxduo, as required by the Combination Rule 21 CFR 300.50.” 6/25/12 CRL, at 1. To correct this issue, the FDA recommended that QRX submit evidence that MoxDuo has either greater efficacy or superior safety to comparable doses of morphine and oxycodone. Id.

The FDA Memo stated that the FDA review team found that Study 008 had met its primary endpoint by demonstrating that MoxDuo was more effective than each of its components. See FDA Memo, at 11. Accordingly, the FDA Memo stated, the review team concluded that Study 008 had satisfied the first prong of the Combination Rule, ie., by showing that “each component makes a contribution to the claimed effects.” Id. (quoting 21 C.F.R. § 300.50(a)). However, the FDA Memo stated, the review team determined that to satisfy the second prong of the Combination Rule—ie., that the “dosage of each component ... is such that the combination is safe and effective for a significant patient population requiring such concurrent therapy”—QRX would have to show that MoxDuo offered a safety or efficacy advantage over comparable doses of morphine and oxycodone. See Id. at 12 (quoting 21 C.F.R. § 300.50(a)) (emphasis added). The review team concluded that, because subjects in the morphine and oxycodone arms of Study 008 received roughly half of the amount of opioid that subjects in the MoxDuo arm had received, the results from Study'008 did not satisfy this portion of the rule. Id.

As to safety, the FDA Memo stated, the review team found that the available data from Study 022 did not “demonstrate[ ] either a safety advantage or disadvantage for Moxduo ..., but rather that Moxduo was comparable to the individual components when taken at ... equivalent doses.” Id. at 20.

On June 27, 2012, QRX issued a press release announcing its receipt of the CRL. SAC ¶ 40. It stated that the “Company is presently considering its response to the requests for additional information with regard to the safety and effectiveness of MoxDuo and has been granted a meeting with the FDA to clarify the steps required for approval.” Id. Later that day, QRX’s ADRs declined 47%, from $7.37 to $3.88 per share. Id. ¶ 62.

7. QRX’s Post-Submission Communications with the FDA

In August and September 2012, QRX issued multiple press releases in which it acknowledged the Company’s disappointment as to the CRL, while stating that, based on its post-submission communications with the FDA, it remained optimistic about MoxDuo’s prospects for approval. See Id. ¶¶ 42, 44. A press release issued on August 20, 2012 is representative. In it, QRX reported that:

[The FDA had] clarified to Company representatives during a post submission review meeting the steps required for approval of immediate release MOX-DUO. The FDA requested further information regarding data filed as part of the MOXDUO [NDA] and additional analysis of trials completed to date, in-eluding. Study 022 which evaluated oxygen desaturation levels in patients receiving MOXDUO compared to those administered morphine or oxycodone alone atequi-analgesic doses.

Id. ¶ 42. Holaday was quoted there as stating:

We were encouraged by our reception at the FDA; the Agency confirmed our Combination Rule Study (Study 008) satisfied efficacy requirements and there were no unexpected or problematic safety issues in any of the studies submitted as part of the MOXDUO NDA.... Additionally, at the FDA’s invitation, we agreed to submit more extensive information on Study 022 and believe the results of this study provide further safety data to support approval of MOX-DUO.

Id.

In October 2012, QRX appealed the review team’s decision to the FDA Office of Drug Evaluation II (“ODEII”). FDA Memo, at 20; SAC ¶ 27. Along with the appeal, it submitted more complete analyses of Study 022. FDA Memo, at 20; SAC ¶ 27. It argued that (1) the Combination Rule does not require that QRX demonstrate a safety or efficacy advantage for MoxDuo over its components at comparable doses; and (2) even if such an advantage were required to satisfy the rule, QRX had demonstrated a safety advantage for MoxDuo compared to morphine and oxycodone. FDA Memo, at 20. In response, the ODEII rejected QRX’s interpretation of the Combination Rule and concurred with the review team’s decision to issue the CRL. FDA Memo, at 20; SAC ¶ 27. It declined to review the new Study 022 anal-yses, and instead directed QRX to file a revised NDA. FDA Memo, at 20; SAC ¶ 27.

In November 2012, QRX appealed this result to the FDA Office of New Drugs (“OND”). The OND upheld the ODEII’s decision on all grounds. FDA Memo, at 20-21; SAC ¶ 27. However, like the ODEII, the OND “recognized the importance of [the Study 022] analyses and strongly recommended that [QRX] submit them as part of [its] response to the CRL.” FDA Memo, at 21.

On October 26 and November 7, 2012, QRX issued press releases, in which it reiterated its earlier statements regarding the post-submission feedback it had received from the FDA. See SAC ¶¶ 46, 48. QRX did not disclose that it had formally appealed the CRL to the ODEII or the OND. See Id. ¶¶ 47, 49.

However, in press releases issued on January 16 and 24, 2013, QRX stated that “[d]uring the Company’s most recent FDA review meeting, [it] presented a position that although the Combination Rule does not require a demonstration of greater efficacy or safety, the data submitted to date indicate a safety advantage for MOX-DUO compared to either morphine or oxy-codone alone.” Id. ¶ 52; Stokes Decl., Ex. 12, at 1; Id., Ex. 13, at 1. QRX further stated that:

The FDA also voiced for the first time that no precedent exists for their review of combination products where two drugs in the same category are combined (e.g. morphine and oxycodone as “opioids”). Therefore, despite the Agency previously confirming that there were no safety issues in any of the studies that were part of the original NDA, the resubmitted application, including new results from Study 022, will likely undergo review by an Advisory Committee in late Q2 2013.

Stokes Decl., Ex. 12, at 1; Id., Ex. 13, at 1.

8. QRX’s Resubmission of the NDA and the FDA’s Second Complete Response Letter

In February 2013, QRX submitted a revised NDA, which, it represented, was intended to show that MoxDuo offered a safety advantage over morphine and oxy-codone. SAC ¶ 28. On February 28, 2013, QRX issued a press release announcing its resubmission. Id. ¶ 54. In it, Holaday stated:

We believe the revised documents effectively address the FDA’s request for additional data resulting from their review of the initial MOXDUO NDA filed in mid-2011.... To this end, and as recommended by the FDA, a comprehensive analysis of Study 022 was included as part of the resubmitted NDA, This study demonstrated the lower risks of respiratory depression for MOXDUO when compared to either morphine or oxycodone.

Id.

In an April 29, 2013 press release, the Company announced that the FDA had formally accepted its resubmission. Id. ¶ 56. The press release quoted Holaday as stating that, “[assuming approval, we anticipate product launch ... before the end of this calendar year.” Id.

In June 2013, QRX notified the FDA that there were errors in the electronic oxygen saturation data from Study 022. Id. ¶ 28; FDA Memo, at 7. Because QRX was unable to correct this data before the FDA’s review, the review team could not rely on it in considering the application. SAC ¶ 28; FDA Memo, at 7.

On August 26, 2013, the FDA issued a second CRL, declining to approve the amended NDA. SAC ¶ 28; see Stokes Decl., Ex. 21 (“8/26/13 CRL”). According to the FDA Memo, the review team found that the safety data and analyses in the resubmission—including the non-tainted data from Study 022 and pooled analyses from the overall development program— did not evince a “meaningful safety advantage” for MoxDuo, and thus “did not address the deficiency ... articulated in the CRL from the first review cycle.” FDA Memo, at 7-8.

On November 25, 2013, QRX submitted a second revised NDA, which contained new data-sets and analyses of Study 022’s electronic oxygen saturation data. Id. at 8, 22; SAC ¶ 29. The next day, QRX issued a press release announcing its resubmission and expressing hope that the FDA would approve it. See SAC ¶ 60. As to Study 022, QRX stated that it “believe[s] [that the oxygen desaturation] data demonstrate a significant respiratory safety advantage for MOXDUO over equi-analgesic doses of morphine or oxycodone.” Id. Holaday was quoted as saying:

We are confident that our refiled NDA will confirm the validity of the data defining the product’s respiratory safety advantages and we are hopeful that the FDA will view them favourably in their consideration of the benefits of immediate release MOXDUO as a therapeutic option for the millions of patients who suffer from acute pain.

Id.

9. The FDA Memo and the AADPAC Meeting

On April 17, 2014, the Australian Stock Exchange and the over-the-counter market in the United States suspended trading in QRX’s securities at QRX’s request, due to pending news from the Company. Id. ¶ 63.

During the trading halt, on April 22, 2014, the FDA published the FDA Memo, which it had prepared as background material for a meeting later that day of its Anesthetic and Analgesic Drug Products Advisory Committee (“AADPAC” or “Committee”). Id. ¶ 64; see FDA Memo. The SAC claims that the memo, which recommended against approving MoxDuo, “painted a very different picture of Mox-Duo’s history than QRX had led investors to believe.” SAC ¶ 64. Specifically, the SAC alleges, it disclosed that: (1) the FDA had previously advised QRX that MoxDuo must satisfy the Superiority Requirement of the Combination Rule; (2) the FDA had sent QRX two No Agreement Letters pri- or to the Company’s initiation of Study 008; (3) QRX had twice unsuccessfully appealed the June 2012 CRL; (4) MoxDuo was not found superior to morphine or oxycodone On Study 022’s primary endpoint; and (5) the FDA did not find that MoxDuo offered a safety advantage over comparable doses of its components. See Id. ¶ 65.

The AADPAC meeting was live-streamed and available to the public. Id. ¶ 66. At it, the Committee concluded that MoxDuo presented no efficacy benefit and only an “uncertain safety benefit” over comparable doses of morphine and oxycodone. Stokes Decl., Ex. 23 (“AADPAC Rpt.”), at 5. As to the data from Study 022, the meeting minutes state that:

[s]everal committee members expressed concern about the many post-hoc analy-ses that were conducted, and described discomfort with relying on the single data point suggesting an improvement in respiratory safety without further supportive data from the other analy-ses.... Overall, members expressed a lack of confidence in the clinical relevance of the respiratory safety data, with one stating that the analysis was sufficient to generate a hypothesis of increased respiratory safety, but was insufficient to confirm this hypothesis.

Id. at 4-5. On this basis, the Committee voted unanimously against approving Mox-Duo. Id. at 5; SAC ¶ 66. However, “several members expressed interest in further evaluating the potential for [MoxDuo] to improve respiratory safety as compared to single-agent opioids.” AADPAC Rpt. 6.

Later that day, QRX issued a press release announcing that the “AADPAC ... voted to recommend against approval of MoxDuo [because it] ... found the Company did not provide sufficient evidence to warrant approval ... at this time.” SAC ¶ 67. Holaday then held an investor conference call to discuss the AADPAC’s vote. Id. ¶ 78. In response to an investor-caller’s questions about the NAL, Holaday first denied recollection and then denied receipt of any such letter. Id. He stated, however, that:

there was an issue regarding statistical problems that were minor, but [QRX] asked [the FDA] to review [the] protocol for 008 before [it] began the study. They agreed that it was properly designed and meets the combination rule as applied at that time. Subsequently, prior to our expected approval in 2012, they came back with a Complete Response Letter, wherein they said that [QRX] needed to show a benefit for this product.

Id.

On April 23, 2014, when trading in QRX securities resumed, the price of QRX ADRs dropped from $3.40 to $0.42 per share—a more than 83% drop. Id. ¶¶ 68, 69.

10. Aftermath

On May 2, 2014, QRX issued a press release stating that Holaday had stepped down as its Managing Director and CEO. Id. ¶ 70. On July 9, 2014, QRX announced that the Chairman and three Directors had resigned from its Board. Id. ¶ 72.

On August 14, 2014, QRX issued a press release announcing that it was halting further development work on MoxDuo. Id. ¶ 73. The press release stated that the Company believed that the FDA would require additional Phase II and III trials, and that “given specific issues related to the design of these clinical studies, ... the likelihood of success is now in considerable doubt.” Id. It stated that QRX had concluded that the significant cost of such a development program was “not commercially justified given the limited residual patent life” of MoxDuo. Id.

E. Procedural History

On June 23, 2015, plaintiff Robert Burns Logan filed the first Complaint in this action'—a putative class action on behalf of similarly situated investors. Dkt. 1. On August 24, 2015, Logan and the “Gillis Group” (consisting of plaintiffs Gillis, Bay-ney, and Rehmsmeyer) filed separate motions for appointment as lead plaintiffs and for approval of their respective counsel. Dkts. 13-15 (Logan), 16-18 (Gillis Group). On September 14, 2015, the Court appointed the Gillis Group as lead plaintiffs, and their counsel, the Rosen Law Firm, as class counsel. Dkt. 23.

On October 26, 2016, the Court stayed this case as to QRX, pursuant to an order by the United States Bankruptcy Court recognizing QRX’s pending Australian insolvency proceeding as a “foreign main proceeding” under chapter 15 of the Bankruptcy Code. Dkt. 28.

On November 23, 2015, plaintiffs filed an Amended Class Action Complaint (“FAC”). Dkt. 38. On December 11, 2015, Holaday filed a motion to dismiss the FAC, Dkt. 39, and a memorandum of law in support, Dkt. 41. He also submitted a declaration by Peter A. Stokes, Dkt. 40, which attached full copies of certain materials cited in the FAC.

On January 4, 2016, upon leave of court, plaintiffs filed the SAC. Dkt. 44. On January 25, 2016, Holaday filed a motion to dismiss the SAC, Dkt. 45, and a memorandum of law, Dkt. 47 (“Def. Br.”), in support. He also submitted a supplemental declaration by Stokes, Dkt. 46, which attached additional materials cited in the SAC. In brief, Holaday argues that plaintiffs’ § 10(b) claim must be dismissed because the SAC fails to (1) identify an actionable misstatement or material omission; (2) adequately plead scienter; or (3) adequately plead loss causation regarding any statements made before June 25, 2012. He argues that plaintiffs’ § 20(a) claim must be dismissed because the SAC fails to adequately allege a primary violation by QRX.

On February 8, 2016, plaintiffs filed a memorandum of law in opposition to the motion to dismiss. Dkt. 50 (“PI. Br.”), On February 16, 2016, Holaday replied. Dkt. 52 (“Def. Reply Br.”).

On February 10, 2016, the Bankruptcy Court entered an order dismissing this case as to QRX. See Dkt. 53. It did so pursuant to the “Deed of Company Arrangement of QRX” effectuated in the Australian insolvency proceeding, which brought that proceeding to a close and expunged all shareholder claims existing as of May 22, 2015. See Id.

II. Applicable Legal Standards

A. Standard for Resolving the Motion to Dismiss

To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim will only have “facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), A complaint is properly dismissed where, as a matter of law, “the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Twombly, 550 U.S. at 558, 127 S.Ct. 1955. Although the court must accept as true all well-pled factual allegations in the complaint and draw all reasonable inferences in the plaintiffs favor, Steginsky v. Xcelera Inc., 741 F.3d 365, 368 (2d Cir.2014), that tenet “is inapplicable to legal conclusions,” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

“Securities fraud claims are subject to heightened pleading requirements that the plaintiff must meet to survive a motion to dismiss.” ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 99 (2d Cir.2007); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 321-23, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007).

First, a complaint alleging securities fraud must meet the requirements of Federal Rule of Civil Procedure 9(b). See ECA & Local 134 IBEW Joint Pension Trust of Chi. v. JP Morgan Chase Co., 553 F.3d 187, 196 (2d Cir.2009). Rule 9(b) states that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “Allegations that are conclusory or unsupported by factual assertions are insufficient.” ATSI, 493 F.3d at 99.

Second, such a complaint must comply with the pleading requirements of the Private Securities Litigation Reform Act (“PSLRA”), 15 U.S.C. § 78u-4(b). See ECA, 553 F.3d at 196. In particular, where a plaintiffs claims depend upon allegations that the defendant has made an untrue statement of material fact or that the defendant omitted a material fact necessary to make a statement not misleading, the plaintiff “shall specify each statement alleged to have been misleading [and] the reason or reasons why the statement is misleading.” 15 U.S.C. § 78u-4(b)(l). Thus, in order to plead a claim of securities fraud, plaintiffs “must do more than say that the statements .., were false and misleading; they must demonstrate with specificity why and how that is so.” Rombach v. Chang, 355 F.3d 164, 174 (2d Cir.2004). In addition, the plaintiff “shall, with respect to each act or omission ... state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2).

B. Elements of Plaintiffs’ Claims

Plaintiffs assert claims under §§ 10(b) and 20(a) of the Exchange Act, and Rule 10b-5. SAC ¶¶ 98-112.

Section 10(b) of the Exchange Act makes it unlawful to “use or employ, in connection with the purchase or sale of any security ... any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe.” 15 U.S.C. § 78j(b). The SEC’s implementing rule, Rule 10b-5, provides that it is unlawful “[t]o make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.” 17 C.F.R, § 240.10b-5.

To state a claim under § 10(b) of the Exchange Act, a plaintiff must adequately plead “(1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5)economic loss; and (6) loss causation.” Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 37-38, 131 S.Ct. 1309, 179 L.d.2d 398 (2011) (internal quotation marks and citation omitted).

To state a claim under § 20(a) of the Exchange Act, “a plaintiff must show (1) a primary violation by the controlled person, (2) control of the primary violator by the defendant, and (3) that the defendant was, in some meaningful sense, a culpable participant in the controlled person’s fraud.” Carpenters Pension Trust Fund of St. Louis v. Barclays PLC, 750 F.3d 227, 236 (2d Cir.2014) (quoting ATSI, 493 F.3d at 108) (internal quotation marks omitted). If a plaintiff has not adequately alleged a primary violation, i.e., a viable claim under another provision of the Exchange Act, then the § 20(a) claims must be dismissed. See Id,

1. False or Misleading Statement or Omission

a. Objective Statements of Fact

To survive a motion to dismiss, the SAC must adequately plead “that the defendant made a statement that was ‘misleading as to a material fact.’” Matrixx Initiatives, 563 U.S. at 38, 131 S.Ct. 1309 (quoting Basic Inc. v. Levinson, 485 U.S. 224, 238, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988)) (emphasis omitted). Significantly, § 10(b) and Rule 10b-5 “do not create an affirmative duty to disclose any and all material information.” Id. at 44, 131 S.Ct. 1309; see also Basic, 485 U.S. at 239 n.17, 108 S.Ct. 978 (“Silence, absent a duty to disclose, is not misleading under Rule 10b-5.”). “Disclosure of ... information is not required ... simply because it may be relevant or of interest to a reasonable investor.” Resnik v. Swartz, 303 F.3d 147, 154 (2d Cir.2002). An omission of information not affirmatively required to be disclosed is, instead, actionable only when disclosure of such information is “necessary ‘to make ... statements made, in the light of the circumstances under which they were made, not misleading.’” Matrixx Initiatives, 563 U.S. at 44, 131 S.Ct. 1309 (quoting 17 C.F.R. § 240.10b-5(b)) (ellipses in original).

As for the materiality requirement, it “is satisfied when there is ‘a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the total mix of information made available.’ ” Id. at 38, 131 S.Ct. 1309 (quoting Basic, 485 U.S. at 231-32, 108 S.Ct. 978). As the Supreme Court has explained, a lower standard—such as defining a “material fact” as any “fact which a reasonable shareholder might consider important”—would lead corporations to “bury the shareholders in an avalanche- of trivial information[,] a result that is hardly conducive to informed decisionmaking.” TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 448-49, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976). The “materiality hurdle” is, therefore, “a meaningful pleading obstacle.” In re ProShares Trust Sec. Litig., 728 F.3d 96, 102 (2d Cir.2013). However, because of the fact-inlensive nature of the materiality inquiry, the Court may not dismiss a complaint “on the ground that the alleged misstatements or omissions are not material unless they are so obviously unimportant to a reasonable investor that reasonable minds could not differ on the question of their importance.” ECA, 553 F.3d at 197 (internal quotation marks and citation omitted).

b. Statemen|s of Opinion

Like objective statements of material fact, subjective statements of opinion can be actionable as fraud. As the Supreme Court has recently clarified, such statements of opinion can give rise to liability in two distinct ways. First, “liability for making a false statement of opinion may lie if either ‘the speaker did not hold the belief she professed’ or ‘the supporting fact she supplied were untrue.’ ” See Tongue v. Sanofi (“Sanofi II”), 816 F.3d 199, 210 (2d Cir.2016) (quoting Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund,—U.S.-, 135 S.Ct. 1318, 1327, 191 L.Ed.2d 253 (2015)). “It is not sufficient for these purposes to allege that an opinion was unreasonable, irrational, excessively optimistic, [or] not borne out by subsequent events.” In re Salomon. Analyst Level 3 Litig., 350 F.Suppüd 477, 489 (S.D.N.Y.2004). “The Second Circuit has firmly rejected this ‘fraud by hindsight’ approach.” Podany v. Robertson Stephens, Inc., 318 F.Supp.2d 146, 156 (S.D.N.Y.2004) (citing Stevelman v. Alias Research, Inc., 174 F.3d 79, 85 (2d Cir.1999)).

Second, “opinions, though sincerely held and otherwise true as a matter of fact, may nonetheless be actionable if the speaker omits information whose omission makes the statement misleading to a reasonable investor.” Sanofi II, 816 F.3d at 210 (citing Omnicare, 135 S.Ct. at 1332). To adequately allege that a statement of opinion was misleading through the omission of material information, “[t]he investor must identify particular (and material) facts going to the basis for the issuer’s opinion—facts about the inquiry the issuer did or did not conduct or the knowledge it did or did not have—whose omission makes the opinion statement at issue misleading to a reasonable person reading the statement fairly and in context.” Id. at 209 (quoting Omnicare, 135 S.Ct. at 1332). As the Supreme Court has explained, “a reasonable investor, upon hearing a statement of opinion from an issuer, ‘expects not just that the issuer believes the opinion (however irrationally), but that it fairly aligns with the information in the issuer’s possession at a time.’ ” Id. at 210 (quoting Omnicare, 135 S.Ct. at 1329). “The core inqui ry,” then, “is whether the omitted facts would ‘conflict with what a reasonable investor would take from the statement itself.’ ” Id. (quoting Omnicare, 135 S.Ct. at 1329).

The Supreme Court has instructed that its ruling that material omissions of facts may render a statement of opinion actionable should not be given “an overly expansive reading,” and that establishing liability on such a theory “is no small task for an investor” to meet. Id. (quoting Om-nicare, 135 S.Ct. at 1332) (internal quotation marks omitted). “Reasonable investors understand that opinions sometimes rest on a weighing of competing facts, ... [and do] not expect that every fact known to an issuer supports its opinion statement.” Id. (quoting Omnicare, 135 S.Ct. at 1329) (alterations and internal quotation marks omitted). “[A] statement of opinion ‘is not necessarily misleading when an issuer knows, but fails to disclose, some fact cutting the other way.’ ” Id. (quoting Omnicare, 135 S.Ct. at 1329).

Further, statements of opinion must be considered in the context in which they arise. ‘“[T]he investor takes into account the customs and practices of the relevant industry,’ and ... ‘an omission that renders misleading a statement of opinion when viewed in a vacuum may not do so once that statement is considered, as is appropriate, in a broader frame.’” Id. (quoting Omnicare, 135 S.Ct. at 1330).

2. Scienter

To sustain their § 10(b) and § 20(a) claims, plaintiffs must also adequately plead scienter. See Matrixx Initiatives, 563 U.S. at 37, 131 S.Ct. 1309; Carpenter Pension Trust Fund, 750 F.3d at 236. As noted, Rule 9(b) and the PSLRA require plaintiffs to “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2). “For an inference of scienter to be strong, ‘a reasonable person [must] deem [it] cogent and at least as compelling as any opposing inference one could draw from the facts alleged.’ ” ATSI, 493 F.3d at 99 (quoting Tellabs, 551 U.S. at 324, 127 S.Ct. 2499) (alteration and emphasis in original).

The requisite mental state is one “embracing intent to deceive, manipulate, or defraud.” Tellabs, 551 U.S. at 319, 127 S.Ct. 2499 (internal quotation marks and citation omitted). Plaintiffs “may satisfy this requirement by alleging facts (1) showing that the defendants had both motive and opportunity to commit the fraud or (2) constituting strong circumstantial evidence of conscious misbehavior or recklessness.” ATSI, 493 F.3d at 99. However, where plaintiffs do not sufficiently allege that defendants had a motive to defraud the public, they “must produce a stronger inference of recklessness.” Kalnit v. Eichler, 264 F.3d 131, 143 (2d Cir.2001).

Recklessness is “a state of mind approximating actual intent, and not merely a heightened form of negligence.” S. Cherry St., LLC v. Hennessee Grp. LLC, 573 F.3d 98, 109 (2d Cir.2009) (citation and emphasis omitted). To qualify as reckless, defendants’ conduct must have been “highly unreasonable” and “an extreme departure from the standards of ordinary care.” Novak v. Kasaks, 216 F.3d 300, 308 (2d Cir.2000) (quoting Rolf v. Blyth, Eastman Dillon & Co., 570 F.2d 38, 47 (2d Cir.1978)) (internal quotation marks omitted). An alleged “refusal to see the obvious, or to investigate the doubtful,” must be “egregious” to be actionable. Chill v. Gen. Elec. Co., 101 F.3d 263, 269 (2d Cir.1996) (citation omitted).

Plaintiffs can establish recklessness by adequately alleging that “defendants knew facts or had access to nonpublic information contradicting their public statements” and therefore “knew or should have known they were misrepresenting material facts.” In re Scholastic Corp. Sec. Litig., 252 F.3d 63, 76 (2d Cir. 2001) (citing Novak, 216 F.3d at 308). However, an inference of scienter does not follow from the mere fact of non-disclosure of relevant information. In re Sanofi Sec. Litig. (“Sanofi I"), 87 F.Supp.3d 510, 534 (S.D.N.Y.2015), aff'd sub nom. Sanofi II, 816 F.3d 199. “Instead, to adequately plead scienter, plaintiffs must also provide sufficient factual allegations to indicate that defendants understood that their public statements were inaccurate, or were ‘highly unreasonable’ in failing to appreciate that possibility.” Id. (quoting Novak, 216 F.3d at 308). “The key, of course, is the honest belief of the management in the truth of information issued to the public.” In re AstraZeneca Sec. Litig., 559 F.Supp.2d 453, 470 (S.D.N.Y.2008), aff'd sub nom. State Univ. Ret. Sys. of Ill. v. Astrazeneca PLC, 334 Fed.Appx. 404 (2d Cir.2009) (summary order).

In the context of the development and approval process for a new drug, “[i]f the management knows that certain facts will necessarily prevent the regulatory approval ... and conceals these facts from the investing public, then there is scienter.” Id. Similarly, there is scienter “if the management is reckless in dealing with such adverse facts.” Id. If, on the other hand, “the management of the company releases positive reports about the drug to the public along the way which the management honestly believes to be true, and where there is no reckless disregard for truth, then that is not securities fraud.” Id. (collecting cases).

3. The PSLRA Safe Harbor for Forward-Looking Statements

The PSLRA amended the Exchange Act to provide a safe harbor for forward-looking statements. See 15 U.S.C. § 78u-5(e). Forward-looking statements are defined as those that contain, among other things, “a projection of revenues, income, [or] earnings,” “plans and objectives of management for future operations,” or “a statement of future economic performance.” Id. § 78u-5(i)(l). A forward-looking statement is not actionable if it “is identified and accompanied by meaningful cautionary language or is immaterial or the plaintiff fails to prove that it was made with actual knowledge that it was false or misleading.” Slayton v. Am. Exp. Co., 604 F.3d 758, 766 (2d Cir.2010). Because the statute is written in the disjunctive, statements are protected by the safe harbor if they satisfy any one of these three categories. Id. Materiality is defined above; the other two categories are defined as follows:

Meaningful cautionary language: To qualify as “meaningful,” cautionary language “must convey substantive information about factors that realistically could cause results to differ materially from those projected in the forward-looking statements.” Id. at 771 (quoting H.R. Conf. Rep. 104-369, at 43 (1996)). Language that is “vague” or “mere boilerplate” does not suffice. Id. at 772. “To determine whether cautionary language is meaningful, courts must first ‘identify the allegedly undisclosed risk’ and then ‘read the allegedly fraudulent materials—including the cautionary language—to determine if a reasonable investor could have been misled into thinking that the risk that materialized and resulted in his loss did not actually exist.’” In re Delcath Sys., Inc. Sec. Litig., 36 F.Supp.3d 320, 333 (S.D.N.Y.2014) (quoting Halperin v. eBanker USA.com, Inc., 295 F.3d 352, 359 (2d Cir.2002)). Plaintiffs may establish that cautionary language is not meaningful “by showing, for example, that the cautionary language did not expressly warn of or did not directly relate to the risk that brought about plaintiffs’ loss.” Halperin, 295 F.3d at 359.

Actual knowledge: The scienter requirement for forward-looking statements—actual knowledge—is “stricter than for statements of current fact. Whereas liability for the latter requires a showing of either knowing falsity or recklessness, liability for the former attaches only upon proof of knowing falsity.” Slayton, 604 F.3d at 773 (quoting Inst. Invs. Grp. v. Avaya, Inc., 564 F.3d 242, 274 (3d Cir.2009)). And, as noted, under the heightened pleading standards, which apply to both scienter requirements, plaintiffs must “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2).

III. Analysis

By way of overview, the SAC identifies a total of 19 statements that plaintiffs claim are materially misleading. Broadly speaking, these statements can be clustered into four categories: statements addressing (1) Study 008 and QRX’s ensuing NDA submission in July 2011; (2) the June 2012 CRL and QRX’s later communications with the FDA; (3) QRX’s commercialization strategy for MoxDuo; and (4) QRX’s submission of the revised NDAs and the prospects for FDA approval.

As to these four categories, the SAC, with very few exceptions, does not claim that the challenged statements therein were themselves false. Rather, it claims that these statements were materially misleading because they did not disclose, inter alia, that (1) by the start of the Class Period, the FDA had determined that QRX would be required to demonstrate that MoxDuo was superior to equi-analgesic doses of its components—a more demanding showing than appeared to be required by the Combination Rule as previously applied; (2) QRX was actively, and unsuccessfully, challenging the FDA’s decision to thus apply the Combination Rule; and (3) each of the setbacks that QRX endured in its quest for FDA approval during the Class Period had resulted from its inability to satisfy the Superiority Requirement.

For the reasons that follow, the Court holds that the statements in the first of the four categories—ie., those relating to Study 008 and QRX’s initial NDA application—are not actionable primarily because plaintiffs have not adequately pled that, at the early point in the chronology when they were made, the FDA had adopted and articulated its eventual position as to how the Superiority Requirement would apply to MoxDuo. And the other omissions the SAC identifies as to these challenged statements were immaterial and did not render them misleading. Finally, some statements in this category are protected by the PSLRA’s safe harbor provision for forward-looking statements.

The statements in the latter three categories were almost all made after the FDA’s June 2012 CRL had indisputably informed defendants of the FDA’s position as to the Superiority Requirement. However, the Court holds, with one arguable exception, these statements were not made materially misleading by virtue of the omissions upon which plaintiffs seize, including, most centrally, the nondisclosure of the FDA’s new Superiority Requirement. That is because, given QRX’s other disclosures and the information available to investors, the disclosure of that requirement and the other information plaintiffs fault defendants for not disclosing was not necessary to make QRX’s challenged statements non-misleading. Particularly significant, QRX timely revealed: first, that the FDA had declined to approve QRX’s original NDA, which included the full study report for Study 008, as inadequate; second, that the FDA had specifically requested additional information from Study 022, which, as QRX publicly explained, was designed to demonstrate MoxDuo’s superiority over equi-analgesic doses of morphine and oxycodone; and third, that the Company was submitting further information, at the FDA’s invitation, to support approval of MoxDuo. In light of these and other disclosures, which left the public well aware that QRX was trying to clear an FDA hurdle by demonstrating superiority to each of its component drugs, the nuances as to how the agency was proposing to apply the Combination Rule to MoxDuo were not material.

The Court separately holds that many statements in these categories are either immaterial puffery and/or protected by the PSLRA’s safe harbor provision for forward-looking statements. Finally, the Court holds that, even if one or more challenged statements were materially misleading, none is actionable because the SAC does not adequately plead scienter. That is, it does not allege that, in failing to disclose the FDA’s application of the Combination Rule, defendants either had a motive and opportunity to commit fraud or were reckless in making those statements.

A. Were the Challenged Statements False or Misleading?

1. Statements Regarding Study 008 and the Initial NDA Submission

The first category of statements the SAC challenges consists of five concerning the results of Study 008 and QRX’s initial NDA submission. See SAC ¶¶ 80, 32, 34, 36, 38. Specifically:

• In a December 6, 2010 press release, which announced the completion of QRX’s third Phase 3 clinical trial (Study 009), QRX stated:

In April 2010, the company released results from a “combination rule” pivotal study (008) comparing the efficacy and safety profiles of Mox-Duo IR against component doses of morphine and oxycodone alone for the management of moderate to severe post-operative pain following bunionectomy surgery. MoxDuo IR not only demonstrated a statistically superior analgesic effect compared to component doses of morphine (p=0.02) and oxycodone (p=0.02) but, also, a favourable side effect profile despite delivering twice the opioid dose of its individual components. This trial met both primary and secondary endpoints.

Id. ¶30. It further stated that, with the successful completion of Study 009, “the company believes it has met the basic requirements for clinical data to enable NDA filing for MoxDuo IR as targeted for the first half of CY2011.” Id.

• In press releases issued on January 24 and January 27, 2011, the Company made similar statements. See Id. ¶¶ 32, 34.

• In press releases issued on July 22 and August 25, 2011, QRX reported updates as to the status of its NDA filing. Specifically, it announced that (1) in July 2011, “Consistent with the [CFR] and as agreed with the FDA,” QRX had “initiated the NDA review process by filing its completed CMC module”; and (2) in August 2011, it had completed its NDA submission. Id. ¶ 38; see also Id. ¶36. The press releases quoted Holaday as stating that such milestones reflected the “significant progress [QRX was making] toward commer-cialising MoxDuo,” Id. ¶ 36, and that QRX was “looking] forward to the regulatory approval process that may enable product sales in 2012,” Id. ¶ 38.

The SAC alleges that these statements were misleading because they did not disclose that in the June 19, 2009 No Agreement Letter, the FDA “had rejected the protocols for Study 008 ... and had specifically required that QRX demonstrate superiority in safety or efficacy for MoxDuo at comparable doses to Morphine and Oxycodone.” Id. ¶ 31; see also Id. ¶¶ 33, 35, 37, 39. The obvious implication of the NAL, plaintiffs argue, was that Study 008— which did not compare MoxDuo to equi-analgesic doses of morphine and oxyco-done—was “categorically insufficient” to satisfy the Combination Rule. Id. ¶ 31. Rather, Study 022 was the “only study [in the development program] that could possibly satisfy the superiority requirement.” Id. ¶¶ 31, 33, 37. And, because the study’s full results had not been included in the NDA, plaintiffs urge, it was misleading for defendants to state that QRX had met the basic requirements to enable NDA filing and was making progress toward obtaining FDA approval. See Id. ¶¶ 31, 33, 35, 37, 39.

These statements are not actionable, for several reasons.

First, and most significant, plaintiffs’ core premise—that the FDA had stated in the NAL that, to satisfy the Combination Rule, QRX was required to fulfill the Superiority Requirement—is belied by the text of the letter itself. The NAL says nothing of the kind.

Plaintiffs rely solely on the FDA’s statement in the NAL that “[i]t is incumbent on you [QRX] to find a patient population that requires the additional benefit you anticipate from your proposed formulation and demonstrate superiority of the combination over the individual components in an adequate and well-controlled study.” Id. ¶20. Plaintiffs treat that sentence, which was found underlined on a copy of the NAL kept in Holaday’s personal files, as a “smoking gun.” PI. Br. 5. Implicit in it, they argue, was a directive that, to satisfy the Combination Rule, QRX was required to show that MoxDuo was superior to its components at equi-analgesic doses (something that Study 008 was not designed to test), as opposed to the actual doses used in the combination (something that Study 008 was designed to test, and ultimately did show). See PI. Br. 7,16,19.

But that construction does not follow. And the surrounding statements in the NAL refute it. First, the quoted language was taken from the FDA’s response to a different question altogether: whether SPID24 (¿a, measuring efficacy after 24 hours), rather than SPID48 (i.e., measuring efficacy after 48 hours) was an appropriate primary endpoint for Study 008. See NAL, at 1. The FDA’s response read, in pertinent part, as follows:

No, the SPID24 is not acceptable as a primary endpoint for this trial.... It is incumbent on you to find a patient population that requires the additional benefit that you anticipate from your proposed formulation and demonstrate superiority of the combination over the individual components in an adequate and well-controlled study. If you cannot demonstrate a difference in treatment response beyond 24 hours, the question becomes whether there is any need for the combination.

Id. at 1-2. Read in context, it is clear that the deficiency which the FDA was addressing—and its stated basis for declining to enter into an SPA for Study 008—was not that the study did not compare Mox-Duo to equi-analgesic doses of morphine and oxycodone. Rather, the FDA was highlighting