Medina v. Clovis Oncology, Inc. (215 F. Supp. 3d 1094, 2017)

OPINION AND ORDER

RAYMOND P. MOORE, United States District Judge

On November 19, 2015, plaintiff Sonny P. Medina (“Medina”) filed a Class Action Complaint (“the initial complaint”) against defendants Clovis Oncology, Inc. (“Clovis”) and Patrick J. Mahaffy (“Mahaffy”), alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) & 78t(a), and Rule 10b-5 promulgated by the Securities and Exchange Commission, 17 C.F.R. § 240.10b-5 (“Rule 10b-5”). (ECF No. 1.) Soon thereafter, two other cases were filed against Clovis and Mahaffy, as well as Erie T. Mast (“Mast”), in this District, and one further case was filed in the Northern District of California against the same three defendants.

On February 18, 2016, this Court consolidated the instant case with the two other cases filed in this District, and appointed M.Arkin (1999) LTD and Arkin Communications LTD (collectively, “plaintiffs”) as lead plaintiffs, pursuant to 15 U.S.C. § 78u-4(a)(3). (ECF No. 43.) On May 23, 2016, after the case filed in the Northern District of California was transferred to this District, the Court consolidated that action with the instant one. (ECF No. 77.) Following the entry of an Order setting a pre-discovery schedule (ECF No. 58), the stage was set for the filing of plaintiffs’ consolidated class action complaint.

On May 6, 2016, plaintiffs, now joined by the City of St. Petersburg Employees’ Retirement System (“St. Petersburg”) as a “named plaintiff,” filed a Consolidated Class Action Complaint for Violations of the Federal Securities Laws (“the Consolidated Complaint”), asserting claims of (1) fraud under the Exchange Act against Clovis, Mahaffy, Mast, Andrew Allen (“Allen”), and Gillian Ivers-Read (“Ivers-Read”) (collectively, Mahaffy, Mast, Allen, and Ivers-Read, the “Executive Defendants”), and (2) strict liability and negligence under the Securities Act of 1933, 15 U.S.C. §§ 77a et seq., (“the Securities Act”) against Clovis, the Executive Defendants, J.P. Morgan Securities LLC (“JPM”), Credit Suisse Securities (USA) LLC (“Credit Suisse”), Stifel, Nicolaus & Company, Incorporated (“SNC”), Mizuho Securities USA Inc. (“Mizuho”) (collectively, JPM, Credit Suisse, SNC, and Mizuho, the “Underwriter Defendants”), NEA Partners, 13 L.P., NEA 13 GP, LTD, Scott D. Sandell (“Sandell”), Forest Baskett (“Baskett”) (collectively, NEA Partners, 13 L.P.; NEA 13 GP, LTD; Sandell; and Baskett, the “NEA Defendants”), and Aberdare Ventures IV, L.P. (“Aberdare”) (collectively, the NEA Defendants and Aberdare, the “Venture Capital Defendants”). (ECF No. 65.)

On July 27, 2016, three motions to dismiss the Consolidated Complaint were filed. (ECF Nos. 98, 103,105.) The motions to dismiss were filed by (1) Clovis and the Executive Defendants (collectively, the “Clovis Defendants”) (ECF No. 105), (2) the Venture Capital Defendants (ECF No. 98), and (3) the Underwriter Defendants (ECF No. 103). On the same day, the Clovis Defendants also filed a Motion Requesting Judicial Notice (“the motion for judicial notice”). (ECF No. 104.) The Clovis Defendants, the Venture Capital Defendants, and the Underwriter Defendants move for dismissal pursuant to Fed.R.Civ.P. 8, 9(b), and/or 12(b)(6) (“Rule 8,” “Rule 9(b),” and “Rule 12(b)(6)”).

On September 23, 2016, plaintiffs filed a global response in opposition to each of the motions to dismiss (ECF Nos. 120, 121), and a response to the motion for judicial notice (ECF No. 119), in which plaintiffs too requested judicial notice be taken of certain documents. On October 11, 2016, the Clovis Defendants filed a reply in support of the motion for judicial notice. (ECF No. 122.) Three days later, briefing ended when the Clovis Defendants, the Venture Capital Defendants, and the Underwriter Defendants, respectively, each filed replies in support of their motions to dismiss. (ECF Nos. 123-125.)

I. Pleading Standards

A. Rule 12(b)(6)

In evaluating a motion to dismiss under Rule 12(b)(6), a court must accept as true all well-pleaded factual allegations in the complaint, view those allegations in the light most favorable to the non-moving party, and draw all reasonable inferences in the plaintiff’s favor. Brokers’ Choice of America, Inc. v. NBC Universal, Inc., 757 F.3d 1125, 1135-36 (10th Cir. 2014); Mink v. Knox, 613 F.3d 995, 1000 (10th Cir. 2010). In the complaint, the plaintiff must allege a “plausible” entitlement to relief. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “Asking for plausible grounds ... does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of [prohibited conduct].” Id. at 556, 127 S.Ct. 1955. Conclusory allegations, however, are insufficient. Cory v. Allstate Ins., 583 F.3d 1240, 1244 (10th Cir. 2009). A complaint warrants dismissal if it fails “in toto to render [plaintiffs] entitlement to relief plausible.” Id. at 569, 127 S.Ct. 1955 n.14.

B. Rule 8, Rule 9(b), and the Private Securities Litigation Reform Act

Under Rule 8, a pleading need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, under Rule 9(b), when fraud or mistake are alleged, the pleader “must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b).

Added to this mix, are the special pleading standards required by the Private Securities Litigation Reform Act (“the PSLRA”), 15 U.S.C. §§ 78u-4 et seq. The PSLRA requires that, when a plaintiff alleges the making of an untrue statement of material fact, or the omission of a material fact that was necessary in order to make the statement not misleading, “the complaint shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.” 15 U.S.C. § 78u-4(b)(1). The PSLRA further requires that, when proof of a particular state of mind is required to recover money damages, the plaintiff must, “with respect to each act or omission alleged to violate this chapter, state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” Id. § 78u-4(b)(2)(A).

While alleged violations of Section 10(b) of the Exchange Act are subject to the heightened pleading requirements of the PSLRA, In re Level 3 Commc’ns, Inc. Sec. Litig., 667 F.3d 1331, 1333 (10th Cir. 2012), alleged violations of Sections 11 and 12(a)(2) of the Securities Act do not fall under the statute’s pleading requirements. Falkowski v. Imation Corp., 309 F.3d 1123, 1133 (9th Cir. 2002), abrogated on other grounds as explained in Proctor v. Vishay Intertechnology Inc., 584 F.3d 1208, 1219-20 (9th Cir. 2009). Arguably, though, the heightened pleading standards of Rule 9(b) would apply to such alleged violations of the Securities Act if the allegations are premised upon fraud. See Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1251-52 (10th Cir. 1997) (“[a]s-suming without deciding” that, if a claim was premised upon fraud, Rule 9(b)’s pleading requirements would apply).

II. Factual Background

Before summarizing the pertinent factual background for the motions to dismiss, it is necessary to resolve the motion for judicial notice. With that motion, the Clovis Defendants request that the Court take judicial notice of 55 documents. (ECF No. 104.) In their response to the motion for judicial notice, plaintiffs ask that a further seven documents be judicially noticed. (ECF No. 119.) Given that the Consolidated Complaint is 149 pages and 481 paragraphs long, taking judicial notice of a further 62 documents (some much longer than others) could be considered excessive, or, conversely, appropriate.

Nonetheless, the parties do not quibble about the noticing of most of the documents. The Clovis Defendants do not object to plaintiffs seven exhibits, and plaintiffs object to just 16 of the 55 exhibits submitted by the Clovis Defendants. Of those objections, the Court need not spend much time, except in one instance. Plaintiffs object to all of the exhibits on the grounds that they are being used to either establish the truth of a matter or make “sweeping” claims about what the financial market as a whole believed. (ECF No. 119 at 4-7.) The Clovis Defendants, however, disavow any such purposes in their reply (ECF No. 122 at 4-5), and the Court would not consider any of the exhibits presented by the parties for those purposes. Instead, the Court will consider the exhibits as evidence that they exist and of their contents. (See id.)

One exception is Exhibit R attached to the motion for judicial notice (ECF No. 104-19). According to the Clovis Defendants, this is “a copy of an abstract presenting certain interim results for rocilet-nib. The abstract was published by the European Journal of Cancer in conjunction with a presentation at the EEORTC NCI AACR (“ENA”) medical conference in November 2014.” (ECF No. 122 at 6.) This may be so, but it is not evident from the document itself. Notably, there is no marking on the document to reflect that it was published by the European Journal of Cancer or to show that it was published in conjunction with a presentation at a medical conference in November 2014. (See ECF No. 104-19.) The Court notes that the document does have a title and a list of authors, and its content does appear to contain test data. (See id.) That being said, without any indication in the document that it was presented at the medical conference as the Clovis Defendants contend, those elements could be present in any document containing test data. In a footnote, the Clovis Defendants assert that the document is “publicly available on the European Journal of Cancer’s website for anyone to verify that Exhibit R is what it purports to be.” (ECF No. 122 at 6 n.4.) Again, that may be true, but it is not this Court’s role to perform that investigation. As a result, having not been presented with a basis to find that Exhibit R “is what it purports to be,” the Court DENIES the motion for judicial notice to the limited extent that judicial notice will not be given to Exhibit R. In all other respects, the motion for judicial notice is GRANTED.

With those findings, the Court now assumes the truth of the following pertinent, non-conclusory allegations from the Complaint and the exhibits that have been given judicial notice. In addition, the Court notes that further facts are set forth for the first time in the ‘Discussion’ section of this Opinion for ease of reference.

A. The Clovis Defendants

Clovis is a biopharmaceutical company headquartered in Boulder, Colorado. (ECF No. 65 at ¶ 37.) Clovis was founded in 2009, and it has been publicly traded since November 2011. Clovis’ business focuses upon acquiring, developing, and commercializing oncology products worldwide. From May 31, 2014 through April 7, 2016 (“the Class Period”), Clovis marketed no drug products, but had three drugs in development. Those drugs were: rociletnib, rucaparib, and lucitanib. (Id.)

Mahaffy was a co-founder of Clovis, and has served as its Chief Executive Officer and Chairman since 2009. (Id. at ¶ 38.) Mast was also a co-founder of Clovis, and served as its Executive Vice President and Chief Financial Officer from 2009 until his resignation on March 31, 2016. (Id. at ¶ 39.) Allen was another co-founder of Clovis, and served as its Chief Medical Officer and Executive Vice President for Clinical and Preclinical Development and Pharma-covigilance from 2009 until his resignation on June 22, 2015. (Id. at ¶ 40.) Ivers-Read was another co-founder of Clovis, and has served as its Chief Regulatory Officer and Executive Vice President for Technical Operations since 2009. (Id. at ¶ 41.)

B. Rociletnib

By far the most important of Clovis’ three drugs under development during the Class Period was rociletnib. (Id. at ¶ 53.) Rociletnib was presented to investors as a breakthrough therapy in the treatment of lung cancer. (Id.) It was also presented as poised to dominate an untapped $3 billion marketplace for lung cancer therapies aimed at patients who develop resistance to front-line treatments. (Id. at ¶ 54.)

The front-line treatment for lung cancer is a class of drugs known as “tyrosine kinase inhibitors” (or “TKIs”). (Id. at ¶ 55.) Patients treated with TKIs overwhelmingly develop a resistance to treatment within one year. (Id. at ¶ 56.) In 60% of those cases, resistance to treatment is caused by a secondary mutation called “T790M” mutation. Rociletnib was supposed to provide an effective treatment for patients who exhibited resistance to TKIs due to the T790M mutation. (Id.)

Prior to the start of the Class Period, rociletnib was the primary developmental drug targeting the marketplace for the T790M positive mutation. (Id. at ¶ 63.) In late 2013, a drug from another pharmaceutical company, Astra Zeneca, called “[t]a-grisso” began to emerge as a potential rival to rociletnib. (Id. at ¶¶ 3, 63.) Investor concerns about tagrisso’s commercial threat came into focus on September 23, 2013, when Astra Zeneca reported a small set of promising data: two confirmed partial responses in six patients evaluated at tagrisso’s lowest dose. (Id. at ¶ 64.) An unspecified number of defendants were aware of the threat posed by tagrisso. (See id. at ¶ 65.) On an October 31, 2013 earnings call, Mahaffy acknowledged that “[w]e are in a race. They are a very able competitor with an active drug.” (Id.)

C. Trial Protocols for Rociletnib

In order to receive approval from the Food and Drug Administration (“the FDA”), Clovis enrolled rociletnib in a series of clinical tests, including a multi-year safety and efficacy trial called “TIGER-X.” (ECF No. 65 at ¶ 4.) TIGER-X generated the entirety of the rociletnib data reported during the Class Period, and formed the principal basis of the rociletnib New Drug Application (“NDA”) that was filed with the FDA. (Id. at ¶ 4.)

Phase 1 trials are conducted to evaluate a drug’s safety in humans. (Id. at ¶ 66.) Phase 2 trials are conducted to evaluate efficacy of a drug. (Id.) An unspecified number of defendants understood that investors were focused upon the Phase 2 rociletnib efficacy results. (Id. at ¶ 65.) One of the key metrics that doctors, regulators, and investors were focused upon was the “objective response rate” (or “ORR”) exhibited in trials. (Id. at ¶ 5.) ORR describes the percentage of patients who experience clinically meaningful tumor shrinkage when treated with a drug. Oncologists and researchers view ORR as a particularly meaningful measure of a drug’s efficacy. (Id. at ¶ 68.) In order for rociletnib to become a commercial success, it needed to show an ORR that compared favorably to tagrisso’s. (Id. at ¶ 70.)

The rules for calculating ORR are set forth in cancer trial standards known as the Response Evaluation Criteria in Solid Tumors (“RECIST”). (Id. at ¶ 5.) RECIST was first published in 2000, and later updated with criteria known as RECIST version 1.1. (ECF No. 104-10 at 229-230.) RECIST version 1.1 states that “[c]onfir-mation of response is required for trials with response primary endpoint,” and “[c]omplete or partial responses may be claimed only if criteria for each are met at a subsequent time point as specified in the protocol (generally 4 weeks later).” (Id. at 228, 235.)

Before a drug trial begins, a drug company is required to specify in “clinical trial protocol” how the trial will be conducted, how trial data will be analyzed, and how success will be defined and measured. (Id. at ¶ 73.) Clovis developed, approved, and agreed to abide by protocols for TIGER-X. (Id. at ¶ 74.) Clovis incorporated RE-CIST into the clinical trial protocol for TIGER-X, and repeatedly stated during the Class Period that it was adhering to RECIST standards. (Id. at ¶¶ 6, 76.) Clovis’ adherence to RE CIST gave investors confidence in its reported results. (Id. at ¶ 77.)

TIGER-X protocols established a schedule for performing confirmatory tumor scans. (Id. at ¶ 79.) In Phase 2, except in certain circumstances, rociletnib was to be administered daily in 21-day cycles until disease progression. (Ex. 1 at 32.) CT scans were “required within 7 days prior to the start of Cycles 3, 5, and 7, and then within 7 days prior to the start of every third cycle of treatment thereafter, beginning with Cycle 10. If an initial CR [complete response] or PR [partial response] is noted at Cycle 7 or beyond, confirmatory scans must be performed 4-6 weeks later.” (Id. at 92.) Members of the medical community, like investors, understood that Clovis was reporting confirmed objective response rates at medical conferences conducted during the Class Period. (Id. at ¶ 91.)

D. Clovis’ Contacts with the FDA and the New Drug Application

In anticipation of filing the NDA for rociletnib, Clovis met privately with the FDA on June 9, 2015. (Id. at ¶ 135.) At this meeting, Clovis reported an ORR of 50% for patients taking the 500mg dose of roci-letnib. (Id.) On June 24, 2015, Clovis filed a rolling NDA submission for rociletnib, which was primarily based upon efficacy data from Phase 2 of TIGER-X. (Id. at ¶ 138.) The rolling NDA submission was finalized on August 3, 2015. (Id. at ¶ 146.)

In October 2015, pursuant to an FDA request, defendants privately submitted rociletnib data showing a confirmed ORR of 28% in T790M positive patients taking the 500mg dose of rociletnib, and a eon-firmed ORR of 34% for patients taking the 625mg dose. (Id. at ¶¶ 152-153.)

E. Clovis’ Funding

In addition to rociletnib, Clovis was also developing rucaparib, a treatment for ovarian cancer, and lucitanib, a treatment for breast cancer. (Id. at ¶ 61.) Although Clovis had these three drugs in development, it generated no sales revenue during the Class Period. During the Class Period, Clovis’ operating expenses were more than $475 million: $84 million in 2013; $172 million in 2014; and $230 million in the first nine months of 2015. In order to fund those operating expenses, Clovis relied on its ability to raise capital from investors. (Id.) Specifically, Clovis raised $287.5 million in a September 9, 2014 private placement of senior notes, and $298 million in a July 2015 secondary offering. (Id. at ¶ 62.)

F. The July 2015 Secondary Offering

Shortly after filing the NDA, Clovis conducted the July 2015 secondary offering by offering 4.1 million shares at $78 per share. (Id. at ¶ 139.) The July 2015 offering raised more than $316 million, with net total proceeds to Clovis of approximately $298 million. (Id. at ¶ 140.) The July 2015 offering was conducted pursuant to a shelf registration statement filed with the SEC, in which Clovis disclosed that it intended to use the proceeds for, inter alia, expenses associated with the potential launches of rociletnib and rucaparib. (Id. at ¶ 141.) Clovis needed these funds, as its operating costs had significantly increased. (Id. at ¶ 142.) Clovis had a $55 million net loss in the fourth quarter of 2014, and, in the next two quarters, Clovis’ losses were $63 million and $72 million, respectively. (Id.)

The prospectus supplement for the July 2015 secondary offering made statements regarding rociletnib’s efficacy, including that data from TIGER-X showed a 60% ORR at the 500mg dose, and, across all doses of rociletnib, a 53% ORR. (Id. at ¶ 144.) The prospectus supplement further stated that Clovis’ data showed “the only common grade 3 [side effect] was hyperglycemia.” (Id. at ¶ 145.) On August 6, 2015, during a conference call with investors, Mahaffy stated that, following the July 2015 secondary offering, Clovis was “well-capitalized to pursue our development and commercial objectives.” (Id. at ¶ 146.)

G.False or Misleading Statements

The following statements are alleged to be false or misleading when made, essentially, because (1) Clovis failed to disclose that its presentation of efficacy data was based upon unconfirmed responses, (2) ro-ciletnib’s confirmed ORR was significantly lower than the unconfirmed rate and ta-grisso’s rate, (3) rociletnib’s safety data showed the drug significantly increased the risk of serious or life threatening cardiovascular events including QT prolongation, and/or (4) adverse side effects from rociletnib caused patients to interrupt, modify, or discontinue therapy. (See, e.g., id. at ¶¶ 322, 324-326.)

On the first day of the Class Period (May 31, 2014), Clovis issued a press release, filed with the Securities and Exchange Commission (“the SEC”) on a form signed by Mast, announcing updated findings from Phase 1 and early Phase 2 portions of TIGER-X. (Id. at ¶ 251.) Clovis claimed 23 partial responses, resulting in an ORR of 58%. (Id.) On the same day, Clovis presented the same data to doctors, investors, and analysts at the 2014 ASCO conference. (Id. at ¶ 252.) Still on the same day, Allen and Mahaffy held a conference call to discuss the ASCO presentation with investors. (Id. at ¶ 253.) During the call, Allen stated that the current ORR in patients with “centrally-confirmed T790M disease is 58%.” (Id.) These statements persuaded analysts and investors that roci-letnib. was in a favorable position to compete with tagrisso. (Id. at ¶ 254.)

On June 23, 2014, Clovis issued a press release, reiterating the data it had presented on May 31, 2014. (Id. at ¶ 258.) On August 7, 2014, Clovis issued another press release, filed with the SEC on a form signed by Mast, announcing its second quarter financial results. (Id. at ¶ 259.) This press release announced again the data presented on May 31, 2014. (Id.) The same data was also announced by Mahaffy on a conference call with investors on the same day. (Id. at ¶ 260.)

On September 9, 2014, Mahaffy participated in the Morgan Stanley Healthcare Conference on behalf of Clovis. (Id. at ¶ 264.) In response to an analyst’s question, Mahaffy stated that he thought roci-letnib and tagrisso had similar response rates. (Id.) Mahaffy’s comparison misled investors into believing that tagrisso and rociletnib were using identical endpoints. (Id. at ¶ 266.) On November 6, 2014, Clovis announced its third quarter financial results, and filed the same with the SEC on a form signed by Mast, and also stated that rociletnib had demonstrated compelling efficacy. (Id. at ¶ 267.)

On November 18, 2014, an unspecified number of defendants issued a press release presenting updated rociletnib efficacy data from a Phase 2 expansion of TIGER-X. (Id. at ¶ 271.) That press release stated that the ORR “in 27 evaluable T790M-positive patients receiving either 625 or 500mg BID was 67%.” In addition, the press release stated that “[i]n 11 evaluable T790M-negative patients treated at 625 or 500mg BID, a 36% ORR and median PFS [progression free survival] of 7.5 months were.observed. This activity in the non-target T790M-negative patient group is surprising.” (Id.) On November 21, 2014, Clovis presented the same data at the November 2014 ENA conference. (Id. at ¶ 273.) Clovis’ presentation at the ENA conference stated that “[e]arly evidence of activity was observed with durable RE-CIST responses, particularly in T790M+ patients.” (Id. at ¶ 274.) On the same day, Mahaffy and Allen held a conference call with investors, and, during the call, Allen stated that, in T790M positive patients, Clovis had presented “an impressive 67% response rate,” and a response rate of 36% in T790M negative patients. (Id. at ¶¶ 275, 276.) On the same call, Mahaffy stated that he thought the response rate in T790M negative patients could represent “a pretty meaningful point of differentiation and benefit to patients.” (Id. at ¶ 277.) These statements persuaded analysts and other market participants that rociletnib’s efficacy profile was impressive and that the drug was highly competitive with tagrisso. (Id. at ¶ 279.)

On January 12, 2015, Mahaffy, on behalf of Clovis, participated in J.P. Morgan’s 33rd Annual Healthcare Conference, and, at that conference, Clovis “trumpeted” the data presented at the ENA conference. (Id. at ¶ 285.) Clovis also presented new data with respect to T790M negative patients, stating “RECIST ORR = 42% overall” and “RECIST ORR = 50% in patients treated with 625mg BID immediately off prior TKI.” (Id.) Mahaffy stated that- the data for T790M negative patients was “compelling data for what is a significant unmet medical need.” (Id. at ¶ 287.)

On February 12, 2015, Mast, on behalf of Clovis, participated in the Leerink Global Healthcare Conference, and reiterated the data presented at the 2015 J.P. Morgan conference concerning T790M negative patients. (Id. at ¶ 288.) Mast further stated that rociletnib and tagrisso had a similar efficacy profile, but rociletnib had a “distinguishable side effect profile.” (Id. at ¶ 289.) Mast stated that rociletnib’s primary side effect was “easily managed hyperglycemia.” (Id. at ¶ 290.) Analysts responded positively to the data presented at the January and February 2015 conferences. (Id. at ¶ 291.)

On February 25, 2015, Clovis issued a press release, filed with the SEC on a form signed by Mast, announcing full year 2014 financial results, which were also filed with the SEC on a form signed by Mast and Mahaffy. (Id. at ¶ 298.) The press release repeated the results presented at the 2015 J.P. Morgan conference. (Id.) On the same day, during a conference call with investors, Mahaffy repeated the efficacy data from the press release. (Id. at ¶ 300.) Mahaffy also stated that “[t]he only common grade 3/4 toxicity recorded was hypoglycemia [sic], which occurred at 14% of patients and was readily managed with an oral hypoglycemic agent [sic].” (Id. at ¶ 301.) In response to these statements, analysts publicly reported their views about rociletnib’s impressive efficacy, and were reassured about the drug’s safety and its competitiveness with tagrisso. (Id. at ¶ 302.)

On March 4, 2015, Clovis presented efficacy data from Phase 2 of TIGER-X at the TAT medical conference. (Id. at ¶ 308.) Clovis reported a 67% ORR in T790M positive patients across all doses used in “Phase ½,” and repeated the data concerning T790M negative patients from January 2015. (Id.) Clovis also stated that “[t]he only grade 3/4 adverse event observed in >5% of patients was hyperglycemia, readily managed with oral Rx.” (Id. at ¶ 309.)

On April 30, 2015, an unspecified number of defendants published rociletnib efficacy data from TIGER-X in an article in the New England Journal of Medicine (“the NEJM Article”). (Id. at ¶ 315.) Five Clovis employees, including Allen, co-authored the article. (Id.) Therein, the unspecified defendants reported “[t]he response rate among 46 patients with centrally confirmed T790M-positive tumors was 59% .... ” (Id. at ¶ 316.)

On May 6, 2015, Clovis issued a press release, filed with the SEC on a form signed by Mast, announcing its first quarter financial results for 2015, and repeated the results presented in the NEJM Article. (Id. at ¶ 319.) During a conference call with investors on the same day, Mahaffy stated that “treatment related adverse events [for rociletnib were] generally infrequent and mild, with the only grade 3 adverse event of note, hyperglycemia ....’’(Id. at ¶ 321.)

On May 31, 2015, Clovis presented additional rociletnib efficacy data at the 2015 ASCO medical conference. (Id. at ¶ 327.) Clovis reported an ORR of 60% for T790M positive patients taking the 500mg dose of rociletnib, and an ORR of 50% for T7900M negative patients taking the 625mg dose. (Id. at ¶¶ 328-329.) On the same day, Clovis issued a press release, announcing the same results, and held a conference call with investors. (Id. at ¶¶ 330, 333.) During the conference call, Allen stated that Clovis had “consistently shown an objective response rate of around 60% in centrally confirmed tissue T790M positive patients,” as well as “consistently observed response rates greater than 35% in centrally confirmed T790M negative patients.” (Id. at ¶ 333.) Allen also stated, with respect to evaluating responses, that “[y]ou cannot be evaluable for response [i.e., ORR] until you have had two scans. Because, obviously, that is the definition for RE CIST objective response.” (Id. at ¶ 335.). Allen further stated that rociletnib was “a very well tolerated oral therapeutic with an extremely low discontinuance rate due to adverse events. And at 500 milligrams, which is our go forward dose, discontinuations are found in only 2.5% of patients.” (Id. at ¶ 337.) These statements reassured investors that rociletnib remained competitive with tagrisso, which, as announced by As-tra Zeneca a few weeks earlier, had achieved a 54% confirmed ORR. (Id. at ¶ 338.) The statements also persuaded analysts that rociletnib had a safety profile that would allow it to garner market share and compete with tagrisso. (Id.)

On August 6, 2015, Clovis issued a press release, filed with the SEC on a form signed by Mast, announcing its second quarter financial results for 2015, and repeated the efficacy results presented at the 2015 ASCO conference. (Id. at ¶ 345.) On the same day, Clovis held a conference call with investors, during which Mahaffy stated that “the only grade 3 adverse reaction or lab abnormality reported in greater than 5% of patients was hyperglycemia.” (Id. at ¶ 347.)

On September 7, 2015, Clovis presented updated rociletnib efficacy data at the 2015 World Conference on Lung Cancer. (Id. at ¶ 352.) Clovis reported an ORR of 60% in T790M positive patients taking the 500mg dose of rociletnib. (Id.) Clovis’ presentation reassured analysts that rociletnib’s efficacy profile was compelling, and that the drug remained in competitive deadlock with tagrisso. (Id. at ¶ 353.) On September 17, 2015, Mahaffy, on behalf of Clovis, participated in the Morgan Stanley Healthcare Conference. (Id. at ¶ 357.) Ma-haffy stated that data showed a 37% response rate in T790M negative patients, which he said was “in contrast with our competitor who does not show this type of activity .... ” (Id.) On September 27 and 28, 2015, at the European Cancer Congress, Clovis presented the efficacy data presented at the 2015 ASCO conference. (Id. at ¶ 359.)

On November 5, 2015, Clovis issued a press release, filed with the SEC on a form signed by Mast, announcing its third quarter financial results, and directed investors to the presentations it had made at the September 7 and September 27-28, 2015 conferences. (Id. at ¶ 364.) Mahaffy did the same thing on a conference call with investors on the same day. (Id. at ¶ 365.) At the time these statements were made, an unspecified number of defendants had provided the FDA with an analysis showing that confirmed objective response rates for T790M positive patients were 28% for the 500mg dose and 34% for the 625mg dose of rociletnib. (Id. at ¶ 367.)

On November 10, 2015, Mast, on behalf of Clovis, participated in the Credit Suisse Healthcare Conference. (Id. at ¶ 369.) Mast presented rociletnib data showing “an overall response rate of just over 50%,” and, for T790M negative patients, “30-ódd patients showing a response rate in excess of 30%.” (Id. at ¶¶ 369-370.) Mast also stated that “[t]he only grade 3 or 4 adverse event that has been identified in more than 10% of patients is hyperglycemia,” and, at the 500mg dose, “the QTc prolongation of grade 3 or higher was only 2.5%.” (Id. at ¶ 371.)

On November 16, 2015, Clovis revealed that the objective response rates reported throughout the Class Period were “based primarily on unconfirmed responses.” (Id. at ¶ 161.) An unspecified number of defendants disclosed that rociletnib’s ORR was 28% among T790M positive patients taking the 500mg dose, and 34% for those taking the 625mg dose. (Id.) Investors and market commentators were shocked by these disclosures. (Id. at ¶ 163.) On November 16, 2015, Clovis’ stock price fell by 70%, from $99.43 per share to $30.24 per share, wiping out approximately $2.7 billion in shareholder value. {Id. at ¶ 170.) The stock price did not decline further because investors continued to believe that rociletnib had a favorable safety profile that would allow it to gain at least some market share for patients who could not tolerate tagrisso. (Id. at ¶ 172.)

On January 13, 2016, Mahaffy, on behalf of Clovis, attended the 2016 J.P. Morgan Healthcare Conference. (Id. at ¶ 376.) Ma-haffy stated that QT prolongation in roci-letnib patients was “well managed,” and that the drug had, had “very few arrhythmic events.... ” (Id. at ¶ 377.) Analysts were persuaded that, despite rocilet-nib’s inferior efficacy relative to tagrisso, its favorable safety profile might still allow it to garner some market share as a second-line therapy for patients who could not tolerate tagrisso. (Id. at ¶ 378.)

On April 8, 2016, the FDA and Clovis released safety data for rociletnib in anticipation of an April 12, 2016 meeting of the FDA’s Oncological Drug Advisory Committee (“the ODAC”). (Id. at ¶ 176.) This data showed that rociletnib significantly increased the risk of serious or life threatening adverse cardiovascular events (specifically, QT prolongation). An unspecified number of defendants had known about this information since at least January 2015. (Id.) The safety data also showed that 56% of rociletnib patients interrupted treatment, 51% reduced their dosage, and 12% discontinued treatment altogether. (Id. at ¶ 178.) Analysts and market commentators reacted by revising their prior valuations to reflect zero revenue attributable to rociletnib. (Id. at ¶ 179.) Following these disclosures, Clovis’ stock price fell 17%, from $20.43 per share to $15.77 per share. (Id. at ¶ 182.)

On April 12, 2016, the ODAC met to discuss the rociletnib NDA, voting 12 to 1 to delay FDA action until Clovis could provide evidence that rociletnib’s overall risk/benefit profile merited approval. (Id. at ¶ 183.) The ODAC concluded that roci-letnib failed to show any clinically meaningful advantage over available therapies, especially tagrisso. (Id.) On May 5, 2016, Clovis announced that it had withdrawn the NDA for rociletnib, and terminated enrollment in all ongoing rociletnib studies. (Id. at ¶ 185.)

III. Discussion

The Court will address the three motions to dismiss individually. First, the Court will address the Clovis Defendants’ motion to dismiss, next will follow the Venture Capital Defendants’ motion to dismiss, followed last (but by no means least) the Underwriter Defendants’ motion to dismiss.

A. The Clovis Defendants’ Motion to Dismiss

The Court makes the following initial observations. The vast majority of the collective motions to dismiss, and plaintiffs’ joint response to those motions to dismiss, is dedicated to the dispute with the Clovis Defendants. Of that dispute, the vast majority of the parties’ pleadings are devoted to two elements of plaintiffs’ claim under Section 10(b) of the Exchange Act. The Court can understand why — because those elements constitute the very heart of the overarching controversy: whether the Clovis Defendants’ statements were false or misleading; and whether the Clovis Defendants’ acted with intent to defraud or with recklessness. On those issues, the parties agree on very little, if anything. Based upon the Court’s review of the Consolidated Complaint, the motions to dismiss, response, and accompanying exhibits, though, resolution of these disputes cannot be achieved at this stage of proceedings.

As alleged in the Consolidated Complaint, the Clovis Defendants engaged in clinical trials to test, inter alia, the safety and efficacy of rociletnib. One of these trials was called “TIGER-X,” and the purpose of Phase 2 of that trial was to test the efficacy of rociletnib. A drug’s efficacy is ordinarily determined by its “objective response rate” or “ORR” — the higher the ORR, the better. Here, a “response” means a reduction (or elimination) of a cancerous tumor. The more favorable responses, i.e., the more patients with reduced or eliminated tumors, the higher the ORR, and, purportedly, the more efficacious a drug. That is the goal at least.

The root of the parties’ dispute appears to be when a “response” needs to be confirmed, and whether the fact that a response is not confirmed need be disclosed to the investing public. Assuming the accuracy of the Consolidated Complaint’s allegations and the material cited therein, though, there is at least one other important matter to be discovered. Notably, the Consolidated Complaint cites the clinical trial protocols for TIGER-X. In other words, the rules governing the TIGER-X trial. In those protocols were built rules governing the assessment of tumors for purposes of testing the efficacy of rocilet-nib. Specifically, the TIGER-X protocols stated that tumor assessments would be performed “at screening; at the end of Cycles 2, 4, and 6 (between Days 14 and 21); every 3 cycles after Cycle 6 (between Days 14 and 21); and at the end-of-study visit.” (Ex. 1 at 52.) Moreover, each “Cycle” lasted 21 days. (ECF No. 104-24 at 2.)

Plaintiffs allege that, unbeknownst to them, the objective response rates reported by the Clovis Defendants reflected initial or unconfirmed responses. When in the timeline of the TIGER-X study that these “initial” responses were assessed is unclear. The answer to that question may prove important, but, for now, it is enough to say that it was some time after screening. After an initial response was assessed, a further tumor assessment was made either six weeks (two cycles), nine weeks (three cycles) later, or, in the event an initial response was not assessed until Cycle 7 or beyond, four to six weeks later. Thus, pursuant to TIGER-X’s own protocols, every initial response should have been followed-up at some point thereafter, and, depending on whether a patient withdrew from testing, on more than one occasion. Except for two hypothetical situations discussed in more detail infra, these follow-up assessments should have definitively established whether a patient’s “initial” response was confirmed or unconfirmed.

In other words, based upon the Court’s understanding of the alleged facts, there should be hard data to prove or disprove plaintiffs’ allegations in this case. By hard data, the Court means the results of the tumor assessments required by the TIGER-X’s protocols. Either those results will show what plaintiffs allege: that initial responses were not followed up by further favorable responses, and these less favorable responses were knowingly left undisclosed. Or the results will show what the Clovis Defendants allege, which, as far as the Court can tell, is something not all that clear, but, at the very least, it is something not suggesting knowing nondisclosure of negative results. Based upon the arguments put forward by the parties, the Court sees no reason why this case should be dismissed before the actual data from Phase 2 of TIGER-X is disclosed, especially when those results could provide a definitive answer to the questions raised by this case or come very close to doing so.

1. Section 10(b) of the Exchange Act

To state a claim under Section 10(b) of the Exchange Act, the plaintiff must allege that:

(1) the defendant made an untrue or misleading statement of material fact, or failed to state a material fact necessary to make statements not misleading; (2) the statement complained of was made in connection with the purchase or sale of securities; (3) the defendant acted with scienter, that is, with intent to defraud or recklessness; (4) the plaintiff relied on the misleading statements; and (5) the plaintiff suffered damages as a result of his rebanee.

In re Level 3 Commc’ns, 667 F.3d at 1333. Moreover, the heightened pleading requirements of the PSLRA apply to the first and third elements. Id.

In addition, in the Tenth Circuit, courts evaluate “the facts alleged in a complaint to determine whether, taken as a whole, they support a reasonable belief that the defendant’s statements identified by the plaintiff were false or misleading.” Adams v. Kinder-Morgan, Inc., 340 F.3d 1083, 1099 (10th Cir. 2003). This approach involves an evaluation of the following factors:

(1) the level of detail provided by the facts stated in a complaint; (2) the number of facts provided; (3) the coherence and plausibility of the facts when considered together; (4) whether the source of the plaintiffs knowledge about a stated fact is disclosed; (5) the reliability of the sources from which the facts were obtained; and (6) any other indicia of how strongly the facts support the conclusion that a reasonable person would believe that the defendant’s statements were misleading.

Id. When an analysis of these factors leads to the conclusion that “a reasonable person would believe that the defendant’s statements were false or misleading, the plaintiff has sufficiently pled with particularity facts supporting his belief in the misleading nature of the defendant’s statements.” Id.

Here, the Clovis Defendants and plaintiffs focus their attentions exclusively on the first and third elements of a Section 10(b) claim: i.e., whether the Clovis Defendants’ statements were false or misleading; and whether the Clovis Defendants’ acted with intent to defraud or with recklessness. Moreover, due to the nature of the allegations in the Consolidated Complaint, discussion of the first and third elements is interwoven to some extent because plaintiffs allege that the Clovis Defendants acted with scienter due, in part, to their knowing disclosure of misleading information. Thus, in order to assess whether the Clovis Defendants acted with scienter, the Court must also assess whether the alleged information was misleading — the same inquiry for the first, element. Accordingly, the Court will begin with that inquiry: whether the alleged information— here, the objective response rates for roci-letnib that the Clovis Defendants disclosed in their public communications — was misleading.

a. False or Misleading Statements

Based upon the allegations in the Consolidated Complaint, the Court believes that the answer to this question is ‘yes’. Plaintiffs’ essential allegation in this regard is that, when the Clovis Defendants disclosed the objective response rate for rociletnib during the Class Period, the rate was based upon “unconfirmed” responses. (See, e.g., ECF No. 65 at ¶ 255.) Plaintiffs allege that this was misleading because an ORR based upon “unconfirmed” responses would not be accepted by the regulator, did not comply with RE CIST, and was not consistent with industry standards. (Id. at ¶¶ 255, 257.) Plaintiffs further allege that the information was misleading because roeiletnib’s confirmed ORR was “significantly lower” than the ORR actually reported by the Clovis Defendants. (Id. at ¶ 255.) The Clovis Defendants counter that it was not clear until after “virtually all” of the challenged statements were made that the regulator would not accept an ORR based upon unconfirmed responses, RE-CIST did not preclude the reporting of unconfirmed responses, and the Clovis Defendants’ interpretation of RE CIST was reasonable. (ECF No. 105 at 36-37, 44-46.)

The first issue is whether RE CIST required confirmed responses during the TIGER-X trial. According to plaintiffs, when the primary “endpoint” of a study is response, RE CIST requires that responses be confirmed. (ECF No. 120 at 24.) The Clovis Defendants argue that RECIST “did not appear to require confirmation of responses in the circumstances of the TIGER-X trial.” (ECF No. 105 at 46.) The Clovis Defendants base this argument on the principle that, because they were reporting results from an “ongoing” study, confirmation may not “necessarily occur” until the conclusion of the same. (Id.) At this stage, the Court agrees with plaintiffs’ interpretation of RE CIST.

RE CIST is the oncology field’s attempt to standardize criteria for evaluating efficacy in clinical trials. (ECF No. 65 at ¶ 75; see also ECF No. 104-10 at 229). In 2009, RE CIST was revised, and it is to this revised version that the parties refer. From the outset of the article explaining the revised RE CIST guidelines (“the EJC Article”) (see ECF No. 104-10 (“New response evaluation criteria in solid tumours: Revised RECIST guideline (version 1.1)”)), it is clear that response confirmation is part of RECIST’s guidelines. Notably, one of the “Highlights of revised RECIST 1.1” is that “Confirmation of response is required for trials with response primary endpoint .... ” (Id. at 228.)

Here, it is not disputed that the purpose or “primary endpoint” for Phase 2 of the TIGER-X trial was response. To the extent it is disputed, it should not be — the trial’s protocols state clearly that “overall response rate” was a “primary endpoint” of Phase 2. (See Ex. 1 at 74; see also ECF No. 104-24 at 4 (“In phase 2, the primary end points were response rate and duration of response.”)). In addition, as far as the Court can discern, the principle of requiring confirmation when response is a primary endpoint does not appear to be disputed. Instead, the Clovis Defendants appear to focus their argument on when confirmation is required, and, on the apparent notion that the moment of confirmation may occur so late in a study that it may never actually happen at all. (See ECF No. 105 at 66 (“there was no date-certain by which Clovis would know whether a response had confirmed or would never confirm.”)). The Clovis Defendants appear to base this argument upon the interplay of something called “best overall response” and a hypothetical question asked in the “[fjrequently asked questions” section of the EJC Article. (See ECF No. 105 at 11, 67; ECF No. 124 at 13.)

Before embarking down that rabbit hole, however, it is important to give some meaning to various terms of art used in the parties’ pleadings. Specifically, the concepts of “complete response,” “partial response,” “stable disease,” and “progressive disease.” RECIST provides that “complete response” or “CR” means the “[disappearance of all target lesions,” “partial response” or “PR” means “[a]t least a 30% decrease in the sum of diameters of target lesions,” “progressive disease” or “PD” means “[a]t least a 20% increase in the sum of diameters of target lesions,” and “stable disease” or “SD” means “[njeither sufficient shrinkage to qualify for PR nor sufficient increase to qualify for PD.” (ECF No. 104-10 at 232-233.)

Returning to the Clovis Defendants’ argument about when or whether confirmation can be achieved, the Court disagrees with the principles upon which it appears to rest. First, in their “Statement of Facts,” the Clovis Defendants assert that RE CIST does not require confirmation by consecutive scans, and that a CR or PR can be confirmed “by any scan showing another response before progressive disease is documented,” citing pages 233 and 235 of the EJC Article. (ECF No. 105 at 19.) As an initial matter, the Court notes its frustration at the Clovis Defendants’ frequent decision to cite to a page or pages from their exhibits without pinpointing the specific language upon which they are relying. In the current example, this citing decision leaves the Court staring at two pages from an exhibit hoping to find the language supporting the Clovis Defendants’ argument when that language is clearly not evident simply from reading the document. More specifically, the Clovis Defendants cite to page 235 of the EJC Article for the proposition that confirmation by consecutive scans is not required under RE CIST. To what language on page 235 is a mystery left for this Court to unravel. Arguably, it could be the language saying that a CR or PR may be claimed only if the criteria for each are met “at a subsequent time point”. After all, “subsequent” does not necessarily mean next in time. This is undercut somewhat, though, by the immediately following language that the subsequent time point is “as specified in the protocol (generally 4 weeks later).” Given that a subsequent time point for assessment in the TIGER-X protocol was in the region of four to six weeks (see Ex. 1 at 92), the foregoing language in the EJC Article would not seem to leave much room for non-consecutive scans.

There is potentially more fruitful language, however, elsewhere on page 235. Notably, the EJC Article explains that repeated “NE” (or not evaluable) assessments may “complicate” best response determinations, and that it would be “reasonable to consider a patient with time point responses of PR-NE-PR as a confirmed response.” This would seem to fit squarely in the Clovis Defendants’ argument that confirmation can be achieved with nonconsecutive scans, given that the next-in-time scan in the foregoing language did not confirm the initial scan, but the initial scan could still be confirmed by the third-in-time scan. There is a similar principle in the hypothetical question posed at the end of the EJC Article and upon which the Clovis Defendants rely. (See ECF No. 124 at 13.) In that question it is asked whether “sequential scans” are required to confirm a PR if a patient has a “32% decrease in sum cycle 2, a 28% decrease cycle 4 and a 33% decrease cycle 6”? (ECF No. 104-10 at 246.) In other words, this question is asking whether borderline responses of PR-SD-PR can result in a confirmed PR. The EJC Article answers that yes it can, explaining that “[i]t is not infrequent that tumor shrinkage hovers around the 30% mark. In this case, most would consider PR to have been confirmed looking at this overall case. Had there been two or three non-PR observations between the two time point PR responses, the most conservative approach would be to consider this case SD.” (Id.)

These principles are all well and good as far as they go, but they go nowhere near as far as the Clovis Defendants assert or how far they need to go in order to make their interpretation of RECIST reasonable. To start with, there is no assertion, or even suggestion, that the hypothetical scenarios supra existed with respect to any of the patients involved in the TIGER-X study. In other words, there is no suggestion that the reason the Clovis Defendants held onto initial responses of PR (and continued to disclose patients as being PR) was because the next-in-time scan was either NE or a borderline case of SD, and the Clovis Defendants were waiting to see if the third scan would return to PR. To be clear, it is to those scenarios, and those scenarios only, that the hypotheticals are addressed. Importantly, the answer to the hypothetical question specifically states that “[h]ad there been two or three non-PR observations between the two time point PR responses, the most conservative approach would be to consider this case SD.” This would appear to foreclose the Clovis Defendants’ second, and more fundamental principle, that a CR or PR can be confirmed by any scan showing another response before progressive disease is documented. (See ECF No. 105 at 19.) This argument from the Clovis Defendants appears to suggest that as long as a patient’s responses are bookended by a CR or PR, whatever happens in the meantime is irrelevant. That is simply not the case, given that the EJC Article states that two or three non-PR observations, such as a combination of two or three not evaluables or stable diseases, should lead to a SD response, even when a patient’s responses are bookended by partial responses.

In any event, based upon the allegations in the Consolidated Complaint, the Court has no reason to find that either one of the hypothetical situations is applicable here. To the extent it is, as the Court has already stated (and will continue to state), there is one very good way to know: through production of the results of Phase 2 of the TIGER-X trial. If those results do happen to show that the Clovis Defendants were presented with initial responses of PR, followed by NE or borderline SD, and were waiting to see if the next-in-time scan was a PR, then the Clovis Defendants may (or may not) have a reasonable basis for making the public disclosures at issue in this case. That, however, is not the situation presented in the Consolidated Complaint, and shows why dismissal at this stage is inappropriate.

The Clovis Defendants’ next argument in support of their interpretation of RE-CIST is that a CR or PR “may not be determined until all data for that patient is known at the conclusion of the study,” which, purportedly, leaves open whether confirmation is required in “ongoing” trials. (ECF No. 105 at 19.) This argument confuses confirmation with the concept of “best overall response.” The Clovis Defendants are correct that the EJC Article does contain the language “once all the data for the patient is known.” (See ECF No. 104-10 at 234.) However, this relates to the determination of “best overall response.” (See id.) “Best overall response” is defined by RECIST as “the best response recorded from the start of the study treatment until the end of treatment taking into account any requirement for confirmation.” (Id.) In that light, requiring that all data be known makes sense before describing a response as the “best” one for the entire study. And that concept is also good as far as it goes, but it does not, as the Clovis Defendants appear to suggest, suspend the need for confirmation.

Rather, the concept specifically takes into account that confirmation may be required, given that the EJC Article states that best overall response “tak[es] into account any requirement for confirmation.” (Id.) In other words, when confirmation is required, confirmation goes hand-in-hand with reporting a best overall response. This is why RE CIST contains a paragraph and a chart dedicated to best overall responses when confirmation is required. (See id. at 235.) In fact, this is where the language discussed supra comes from about claiming a CR or PR “only if the criteria for each are met at a subsequent time point as specified in the protocol (generally 4 weeks later).” (See id.)

Moreover, RECIST “assume[s] that at each protocol specified time point, a response assessment occurs.” (Id. at 234.) In other words, RE CIST assumes that initial responses are assessed at each subsequent time point, which necessarily includes the next one. As discussed supra, that is also precisely what the TIGER-X protocols provided for in establishing a schedule for tumor assessments. (See Ex. 1 at 64, 92.) These “time point” or “overall” responses, as RECIST describes them, are the vehicle through which confirmation is performed on an ongoing basis. That is, presumably, why the TIGER-X protocols described them as “Confirmatory Measurements.” (See Ex. 1 at 92.) Thus, rather than leaving open whether confirmation is required in ongoing studies, RECIST and TIGER-X were specifically designed to accommodate confirmation in ongoing trials. To the extent this was not clear enough, later in the EJC Article, it states that, “[i]n non-randomized trials where response is the primary endpoint, confirmation of PR and CR is required to ensure responses identified are not the result of measurement error.” (ECF No. 104-10 at 236.)

Put simply, although RE CIST provides that the best overall response for an entire study, is determinable only at the end of the study, confirmation of any of the individual responses that may become the best overall response is required “at a subsequent time point as specified in the protocol (generally 4 weeks later).” (See id. at 235.) While this language may not necessarily mandate a consecutive confirmatory response, it also certainly does not mean that confirmation can only be determined at the end of a study. Rather, confirmation will “generally” occur within four weeks of the initial response or as specified in the protocol, which, here, meant less than seven weeks later.

In summary, based upon the explanation of RESIST in the EJC Article, the Court does not find the Clovis Defendants’ interpretation of RECIST (i.e., that responses could be confirmed so long as a patient demonstrates another PR at any time before disease progression) to be reasonable, especially when taken to the extreme that the Clovis Defendants attempt to take it by asserting that a response may never be confirmed. Such an interpretation is simply divorced from the language of RECIST. In addition, such an interpretation is divorced from the protocols governing confirmation for the TIGER-X trial, and, in that sense, the TIGER-X protocols appear to be entirely consistent with RE CIST. As discussed supra, the TIGER-X protocols required confirmatory scans within seven days of the start of Cycles 3, 5, and 7, which meant that a scan was required within five to six weeks of the initial (screening) scan, and then every five to seven weeks for the next two scans. If a patient reached Cycle 7, then a scan was required every eight to ten weeks thereafter. If a CR or PR was first observed at or after Cycle 7, though, a confirmatory scan was required four to six weeks later. (Ex. 1 at 92.)

With this schedule of testing, assuming that Clovis complied with its own protocols during the TIGER-X trial, confirmatory scans should exist for every patient enrolled in the trial who did not unenroll from the same before Cycle 3. Moreover, depending on how long a patient continued in the trial, multiple confirmatory scans should exist. In turn, those confirmatory scans should reflect a response; be it CR, PR, SD, PD, or NE, which means that the patient’s initial response should be con-firmable or not. To the extent that the next-in-time response was a borderline SD or a NE, then that too should be documented in the results. If this data exists, then it should be a question of matching dates of confirmatory scans with the cutoff dates for publicly disclosed objective response rates in order to determine whether those rates were no longer consistent with the results of the confirmatory scans. If confirmatory scans took place after the cutoff date for a publicly disclosed ORR, then the ORR may not be misleading. But, if confirmatory scans were performed before the cutoff date, and the disclosed ORR still only reflected the results of initial (unconfirmed) scans, then the ORR would likely be misleading. Equally, to the extent that a publicly disclosed ORR was based upon a blend of confirmed and unconfirmed responses, the data from Phase 2 of TIGER-X will help show to what extent the rate was truly a blend and on what basis unconfirmed responses were categorized as unconfirmed.

The Court acknowledges that this conclusion rests upon the Court’s interpretation of RECIST and the TIGER-X protocols. The Court further acknowledges that, just because the Court has interpreted those matters in the way it has, does not mean that will remain true going forward. In other words, conceivably, the Clovis Defendants could present evidence at summary judgment indicating that their interpretation of RECIST was reasonable and that the FDA would accept their unconfirmed responses. All that the Court is finding at this juncture is that the Clovis Defendants will not be able to make such a showing based purely upon the plain meaning of the language in the EJC Article.

On a related note, the Clovis Defendants argue that there are no well-pled allegations that objective response rates based upon confirmed responses tracked below objective response rates based upon blended responses at the time that the alleged public disclosures were made. (ECF No. 105 at 39.) The Court disagrees. As an initial matter, this issue brings up, and is connected to, another: whether a purported “[sjtatistical analysis” from a “preeminent mathematician” (David Madigan) should be considered in det