Full opinion text
MEMORANDUM AND ORDER WILLIAM G. YOUNG, District Judge. I. INTRODUCTION This is a shareholder class action brought by Joseph Bradley, the City of Fort Lauderdale Police & Fire Retirement System, Pension Trust Fund for Operating Engineers and Automotive Industries Pension Trust Fund, and William A. Gaul, D.M.D. (collectively, “the Lead Plaintiffs”), on behalf of themselves and all similarly-situated shareholders, against ARIAD Pharmaceuticals, Inc. (“ARIAD”), several officers and directors of ARIAD (Chief Executive Officer Harvey Berger, Chief Financial Officer Edward Fitzgerald, Chief Medical Officer Frank Haluska, and Chief Scientific Officer Timothy Clackson) (“the Individual Defendants,” together with AR-IAD, the “ARIAD Defendants”), and seven underwriters. The underwriter defendants are J.P. Morgan Securities LLC, Cowen and Company, LLC, Jefferies & Company, Inc., BMO Capital Markets Corp., Leerink Swann LLC, RBC Capital Markets, LLC, and UBS Securities LLC (collectively, “the Underwriters”). The Lead Plaintiffs bring this proposed class action on behalf of themselves and all other persons or entities who purchased or acquired (1) any publicly-traded ARIAD securities between December 12, 2011 arid October 30, 2013 (the “Class Period”), or (2) any of ARIAD’s common stock pursuant or traceable to the secondary offering that occurred on or about January 24, 2013 (“2013 Stock Offering”) and were damaged thereby. Corrected Consol. Compl. Violations Fed. Secs. Laws (“Compl.”) 1, ECF No. 131. They allege that the ARIAD Defendants made a series of false and misleading statements and omissions in regards to the safety, efficacy, and commercial prospects of ARIAD’s main product, a cancer medication called ponatinib, which is used to treat chronic myeloid leukemia. Id. As a result of these statements and omissions, the Lead Plaintiffs allege that the price of ARIAD common stock traded at artificially high values, while ARIAD concealed the full extent of adverse events arising from their clinical trials. Id. ¶¶ 56. Arguing that the Individual Defendants knew the full extent of the negative results stemming from the ongoing clinical trials, the Lead Plaintiffs allege that the Individual Defendants engaged in suspicious and unusual stock sales during the Class Period. Id. ¶ 327. They also bring a claim against the ARIAD Defendants and the Underwriters under Section 11 of the Securities Act of 1933 (“Section 11”) for alleged misstatements and omissions in stock offering materials. Id. ¶¶ 416-17. The ARIAD Defendants and the Underwriters seek dismissal of all claims against them. A. Procedural History This litigation began on October 10, 2013 upon the filing of a class action complaint by Jimmy Wang against ARIAD and four of its officers. Class Action Compl. for Violations of Fed. Secs. Laws, ECF No. 1. The case was initially drawn to Judge Joseph Tauro, Elec. Notice, Oct. 11, 2013, ECF No. 3, but was reassigned to this Court shortly thereafter, Elec. Notice, Dec. 10, 2013, ECF No. 38. On January 9, 2014, the Court entered an order consolidating several related actions into this single litigation, selecting lead plaintiffs, and approving the selection of lead counsel. Order, Jan. 9, 2014, ECF No. 95. The operative complaint was filed as a corrected consolidated complaint by the Lead Plaintiffs on March 25, 2014. Compl. The complaint is divided into two distinct and stand-alone parts, the first of which contains fraud allegations arising under Section 10(b), Rule 10b-5 promulgated thereunder by the United States Securities and Exchange Commission (“SEC”), and Section 20(a) of the Securities Exchange Act of 1934, Compl. ¶¶ 20-415 and the second of which contains allegations and claims arising under Section 11 of the Securities Act of 1933. See Compl. ¶¶ 416-85. The two motions addressed by the Court here are motions to dismiss for failure to state a claim brought by the ARIAD Defendants and the Underwriters on April 14, 2014. ARIAD Defs.’ Mot. Dismiss Corrected Consol. Compl., ECF No. 147; Mem. Supp. ARIAD Defs.’ Mot. Dismiss Corrected Consol. Compl. (“ARIAD Defs.’ Mem.”), ECF No. 148; Underwriter Defs.’ Mot. Dismiss, ECF No. 144; Underwriter Defs.’ Mem. Law Supp. Mot. Dismiss (“Underwriter Defs.’ Mem.”), ECF No. 145. The Lead Plaintiffs filed an omnibus memorandum of opposition to the motions to dismiss on May 21, 2014. Pis.’ Omnibus Mem. Law Opp. Defs.’ Mot. Dismiss Corrected Consol. Compl. (“Pis.’ Opp’n”), ECF No. 157. On June 4, 2014, the Underwriters submitted a reply in further support of their motion to dismiss, Underwriter Defs.’ Reply Mem. Law Further Supp. Mot. Dismiss (“Underwriter Defs.’ Reply”), ECF No. 162, and on June 5, 2014, the ARIAD Defendants submitted their own reply memorandum. ARIAD Defs.’ Reply Mem. Further Supp. Mot. Dismiss Corrected Consol. Compl. (“AR-IAD Defs.’ Reply”), ECF No. 166. B. Facts Alleged ARIAD is a biotechnology company based in Cambridge, Massachusetts, specializing in the development and sale of cancer drugs. Compl. ¶ 429. For several years, the company primarily has focused on developing the drug ponatinib, also known as Iclusig, as a treatment for chronic myeloid leukemia (“CML”). Id. In particular, ARIAD focused on developing a front-line drug to compete with existing drugs to treat CML, noting that front-line drugs are more lucrative products than second-line drugs. Id. ¶ 11 (explaining that front-line drugs “typically outsell second-line treatments by many orders of magnitude”). In the course of seeking approval by the U.S. Food and Drug Administration (“FDA”), ARIAD commenced a clinical trial on September 13, 2010, referred to by the parties as the PACE 2 trials. Id. ¶ 47. The trial was “designed to assess the efficacy and safety of ponatinib in a larger subject group” consisting of “second-line” CML patients, meaning those with a demonstrated resistance to other, more established treatments. Id. ¶¶ 47-49, 431. The PACE 2 protocol provided for 449 test subjects to be treated with a recommended daily dose of 45 milligrams of the drug. Id. ¶ 49. Seeking funding for their ongoing clinical trials, ARIAD held its first of two stock offerings in December 2011, raising $258,000,000. Id. ¶ 62. On June 4, 2012, ARIAD announced favorable interim results at a medical conference, citing “clear evidence of a favorable safety and tolerability profile in ponatinib in resistant or intolerant CML patients.” Id. ¶ 50-51. ARIAD also submitted an interim report to the FDA containing data through the end of July 2012 (the “July 2012 Interim Report”). Id. ¶ 433. The results of this interim report documented adverse cardiovascular events in test subjects, including the incidence of “serious arterial thrombosis” in eight percent of patients. Id. ¶¶ 433, 435. Shortly after the submission of the July 2012 Interim Report, ARIAD began a new clinical trial (the “EPIC” trial), which “was designed to support FDA approval of ponatinib in newly-diagnosed, never-treated CML patients, a.k.a. ‘front-line’ CML.” Id. ¶ 434. The prescribed dosage for the EPIC trial was also 45 milligrams daily. Id. On December 14, 2012, ARIAD filed a Form 8-K and announced in a press release that the FDA had granted accelerated approval to market ponatinib for second-line use. Id. ¶¶ 76-79, 435 (noting that the FDA relied on and publicized the data evinced in the July 2012 Interim Report). This press release included the list of serious adverse events that had occurred, including an eight percent occurrence of “serious arterial thrombosis” and four percent occurrence of serious congestive heart failure, with four fatalities. Id. ¶¶ 78-79. The FDA’s approval was conditioned on two requirements: first, that each bottle of ponatinib include a “black box” warning label disclosing the occurrence of serious adverse cardiovascular events in users, and second, that ARIAD submit follow-up PACE 2 data to the FDA. Id. ¶¶ 110, 435-36. A “black box” warning is the strongest warning level for a prescription drug under FDA guidelines. Id. ¶¶ 81-82. The same day as the press release, ARIAD’s share price fell twenty-one percent. Id. ¶ 88. One month later, ARIAD conducted a public secondary offering of common stock (“the Offering”) on January 24, 2013, id. ¶ 439, with the intention that the proceeds of the Offering be earmarked for developing and manufacturing ponatinib, id. ¶ 63. In connection with the Offering, the Underwriters prepared materials, including a prospectus supplement, to accompany existing materials such as a shelf registration statement, a prospectus, and a number of SEC filings (collectively, “the Offering Materials”). Id. ¶ 441. ARIAD issued 15,-307,000 shares in the Offering and raised $310,000,000. Id. ¶¶ 439-40. In August 2013, ARIAD submitted follow-up data from the PACE 2 trials to the FDA. Id. ¶ 437. The new data, which covered the trial period from August 2012 to August 2013, “showed [among other things] that the rate of serious arterial thrombosis associated with ponatinib had increased from 8 [percent] to 11.8 [percent] in the time since” July 2012. Id. Two months later, ARIAD announced that the FDA had terminated the EPIC trial, foreclosing ponatinib’s approval for front-line use, which resulted in a stock value drop of forty-one percent. Id. ¶ 17. Shortly thereafter, ARIAD announced that the FDA had suspended marketing of ponatinib, resulting in a further forty-four percent drop in market value. Id. The FDA disclosed a number of serious adverse side effects occurring in ponatinib patients and stated that “[a]t this time, [the] FDA cannot identify a dose level or exposure duration that is safe.” Id. ¶ 438. After the Class Period ended, ARIAD announced on December 20, 2013 that the FDA was now allowing the marketing and distribution of ponatinib under a new label which included additional language on vascular occlusive events and heart failure. Id. ¶¶ 309-10. This re-labeling significantly narrowed the eligible population of CML-patients, as it was relegated for third and fourth-line usage. Id. ¶ 312. The FDA issued independent safety findings on December 18, noting that “similar rates of serious vascular events have not been observed in several other drugs of this class.” Id. ¶ 313. II. ANALYSIS: Claims Against the Defendant ARIAD A. Standard of Review 1. The Motion to Dismiss Standard Under the Federal Rules of Civil Procedure, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, 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 mere recital of the legal elements supported only by conclusory statements is not sufficient to state a cause of action. Id. at 555, 127 S.Ct. 1955. Relatedly, “courts increasingly insist that more specific facts be alleged where an allegation is conclusory.” Plumbers’ Union Local No. 12 Pension Fund v. Nomura Asset Acceptance Corp., 632 F.3d 762, 773 (1st Cir.2011) (citing Maldonado v. Fontanes, 568 F.3d 263, 266, 274 (1st Cir.2009)). Even at the motion to dismiss stage, “ ‘naked assertionfs]’ devoid of ‘further factual enhancement’ ” are not entitled to a presumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). “[I]t is only when ... conclusions are logically compelled, or at least supported, by the stated facts, that is, when the suggested inference rises to what experience indicates is an acceptable level of probability, that ‘conclusions’ become ‘facts’ for pleading purposes.” Cooperman v. Individual, Inc., 171 F.3d 43, 47-48 (1st Cir.1999) (quoting Dartmouth Review v. Dartmouth College, 889 F.2d 13, 16 (1st Cir.1989)). 2. Standard of Review in Securities Actions In many securities actions, a heightened pleading standard applies. This is so because claims alleging fraud are subject to the stricter standards of Federal Rule of Civil Procedure 9(b), and because the Private Securities Litigation Reform Act (“PSLRA”), Pub. L. No. 104-67, codified at 15 U.S.C. § 78u-4, imposes an even more rigorous standard on scienter allegations, a required element of fraud claims under Section 10 of the Exchange Act. See Lenartz v. Am. Superconductor Corp., 879 F.Supp.2d 167, 180 (D.Mass.2012). PSLRA, enacted as a “check against abusive litigation by private parties,” requires that plaintiffs “state with particularity both the facts constituting the alleged violation, and the facts evidencing scienter, i.e., the defendant’s intention ‘to deceive, manipulate, or defraud.’ ” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) (internal citation omitted). Plaintiffs pleading a violation of Section 11 of the Securities Act, however, typically “need only satisfy the notice-pleading standard of Fed.R.Civ.P. 8(a),” since scienter is not an element of Section 11. Silverstrand Invs. v. AMAG Pharm., Inc., 707 F.3d 95, 102 (1st Cir.2013). The First Circuit recognizes one exception to the “relatively minimal burden” of pleading a Section 11 claim: when the allegations supporting a Section 11 claim sound in fraud, ... they are subject to the heightened requirements of Rule 9(b). Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1223 (1st Cir.1996). “[C]ourts must ensure that [Section 11 allegations] truly do ‘sound in fraud’ before the heightened pleading standard ... attaches.” In re Number Nine Visual Tech. Corp. Sec. Litig., 51 F.Supp.2d 1, 12 (D.Mass.1999). Here, the Plaintiffs’ Section 10b, Rule 10b-5, and Section 20 claims sound in fraud and must therefore meet the rigorous scienter standards under the PSLRA. The Plaintiffs’ Section 11 claims, however, do not sound in fraud. Compl. ¶ 417 (“Lead Plaintiffs do not allege or intend to allege any claims or assertions of fraud in connection with their claims in this section of the Complaint, which are rooted exclusively in theories of innocent and/or negligent conduct to which the strict liability provisions of the §§ 11 and/or 15 apply----”). Although the first part of the complaint contains extensive allegations of fraudulent representations and concealment by ARIAD and its management, there are no allegations in the second part of the complaint suggesting that any of the Underwriters affirmatively knew of or attempted to cause incomplete and misleading disclosures in the Offering Materials. The second part of the complaint addressing the Section 11 claims, then, is subject to the ordinary pleading standard applicable to a Rule 12(b)(6) motion to dismiss ... See In re WebSecure, Inc. Sec. Litig., 182 F.R.D. 364, 367 (D.Mass.1998) (O’Toole, J.) (holding that Section 11 claims against underwriters do not sound in fraud because “[njowhere in the complaint is there any allegation of scienter with regard to the underwriter defendants”). B. Count 1: Section 10(b) and Rule 10b-5 Violations The Plaintiffs allege that ARIAD, throughout the Class Period, provided an overly positive outlook on safety and efficacy data from the ongoing PACE 2 trial, describing the drug as “well tolerated” without full disclosure of dosage reductions and serious cardiovascular side effects that occurred in the pre-approval period. See Compl. ¶¶ 146-239. In December 2012, ARIAD’s tune changed with the disclosure of serious adverse events through AR-IAD’s FDA approval announcement, resulting in ARIAD stock price dropping more than twenty percent in a single day. Pis.’ Opp’n 12. The Plaintiffs allege that ARIAD continued to make positive statements in the post-approval period, with the “full truth” only emerging in October 2013. Compl. 16. Section 10 of the Exchange Act provides: It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange ... (b) 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 as necessary or appropriate in the public interest or for the protection of investors. 15 U.S.C. § 78j(b). To state a claim under Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated. thereunder, the Plaintiffs must allege that: “(1) in connection with the purchase or sale of securities, (2) the defendant made a false statement or omitted a material fact, (3) with the requisite scienter, and that (4) plaintiff relied on the statement or omission, (5) with resultant injury.” Lenartz, 879 F.Supp.2d at 180-81; see also Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 341, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005). Materiality requires that there be “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.” Basic Inc. v. Levinson, 485 U.S. 224, 231-32, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988) (quoting TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976)). Because these claims sound in fraud, the Plaintiffs must plead with particularity, pursuant to Rule 9(b) and PSLRA, To survive a motion to dismiss, “the plaintiff must ‘specify each statement alleged to have been misleading [and] the reason or reasons why the statement is misleading,’ ” Hill v. Gozani 638 F.3d 40, 55 (1st Cir.2011) (quoting ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 58 (1st Cir.2008)), and each alleged act or omission must “state with particularity [the] facts giving rise to a strong inference that the defendant acted with the required state of mind.” Id. (quoting 15 U.S.C. § 78u-4). 1. Scienter Requirements Section 10(b) requires the plaintiff to show scienter, i.e. that the speaker “acted with fraudulent intent or knowing or reckless disregard of his obligation to disclose.” In re Boston Sci. Corp. Sec. Litig., 686 F.3d 21, 29 (1st Cir.2012) (citing Automotive Indus. Pension Trust Fund v. Textron, Inc., 682 F.3d 34, 38-39 (1st Cir.2012)). PSLRA requires that a strong inference of scienter be pled, amounting to a “cogent and at least as compelling as any opposing inference one could draw from the facts alleged.” Tellabs, 551 U.S. at 324, 127 S.Ct. 2499. The First Circuit in N.J. Carpenters Pension & Annuity Funds v. Biogen IDEC Inc., 537 F.3d 35, 55 (1st Cir.2008), established that “[i]f there is reason to be concerned about material omissions or misrepresentations, the presence of insider trading can be used, in combination with the other evidence, to establish scienter.” See also Smith v. First Marblehead Corp., 55 F.Supp.3d 223, 231 (D.Mass.2014) (Saris, J.) (“A strong inference of scienter can also be supported by indirect evidence,” including evidence of “[i]nsider trading, or sudden sales of shares by the defendants,” which is “highly probative of scienter.”); cf. Mississippi Pub. Emps. Ret. Sys. v. Boston Sci. Corp., 649 F.3d 5, 29 (1st Cir.2011) (“Insider trading cannot establish scienter on its own, but rather can only do so in combination with other evidence.”). The Plaintiffs allege that false and misleading statements were made, essentially by omission, about ponatinib and its adverse cardiovascular effects, widespread dosage reduction, and potential for front-line approval throughout the Class Period, causing ARIAD stock to trade at inflated prices. Pls.’ Opp’n 19. The ARIAD Defendants counter these allegations by arguing that the Plaintiffs are unable to show that “at the time these statements were made, the ARIAD Defendants knew that the statements were false or that additional disclosures were necessary to make them not misleading.” ARIAD Defs.’ Mem. 7. They also posit that alleged omissions surrounding the PACE trial and dosage reductions were, in fact, disclosed and nonmaterial. Id. at 12. Finally, the ARIAD Defendants state that allegations of the Individual Defendants’ insider trading were motivated by normal, financial incentives under allowable “Rule 10b5-l plans,” rather than by a personal profit motive, and do not support an inference of scienter. Id. at 16-17. Upon review of the alleged misrepresentations regarding serious adverse events, dosage reductions, and forecasts on the long-term safety and efficacy of ponatinib, the Court determines that while certain material misstatements and omissions were indeed made by the ARIAD Defendants, the Plaintiffs fail to establish that they were made with scienter. 2. Pre-Approval Statements: Omissions Regarding Dosage Reduction In the first ponatinib clinical trial, the FDA approved a maximum dosage of 45 milligrams of ponatinib for late-stage CML patients. Pls.’ Opp’n 7, 23 (resulting from the PACE 1 trial which tested safety and efficacy across different dosage levels). As admitted by Harvey Berger, the chairman and CEO of ARIAD, the only way to ensure ponatinib’s success as a frontline drug would be to have a successful trial using the 45 milligram dosage. Id. at 23-24 (“... if there was widespread reduction of the dosage level below 45 mg, then ponatinib stood virtually no chance of being approved as a ‘front-line’ CML treatment.”). In December 2012, ARIAD announced it had received FDA approval for ponatinib to treat patients with TKI-resistant or intolerant CML, although they had to publish a strong warning label disclosing serious cardiovascular events and lower dosage levels in the clinical study. Compl. ¶¶ 76-79, 87. The Plaintiffs argue that up to this point, investors had been kept in the dark about the overall rate of dosage reductions (amounting to approximately seventy-three percent) that occurred in the PACE 2 trial. Pls.’ Opp’n 24 (describing ARIAD’s statements on dosage reductions as “vague,” and made in an effort to “convey that dose reductions were a relatively rare occurrence.”). They point to the drop in share price from $23.88 to $18.93 on the day of the announcement as evidence that investors were surprised by the news. Compl. ¶ 88. The ARIAD Defendants counter that dosage reductions had been made known to investors, and that alternatively, the reductions were not material information. ARIAD Defs.’ Mem. 11. It is evident from the Defendants’ own explanation, however, that their disclosures were lacking in substance and delivered in limited fora. The disclosures were described as follows: On December 12, 2011, Chief Medical Officer Frank Haluska mentioned that three dosage levels were used in the PACE 2 trial and that “[i]n some cases, you go down to the next lowest level.” Id. (answering an analyst’s question during a webcast which was later posted to ARIAD’s website). His answer made no mention of the rate of dosage reduction. In June 2012, a clinical investigator stated that “a few” patients had their ponatinib dosages reduced in order to control adverse events. Id. at 1112 (responding to an audience member’s question during an investor event). It is questionable how these two disclosures, the latter of which did not even come from an ARIAD officer, constituted meaningful disclosure of the total rate of dosage reduction affecting more than half the participants in the PACE 2 study. The ARIAD Defendants also argue that even if the dosage reductions were not disclosed, they did not constitute material information under the “total mix of information” standard, because the overall results of the PACE 2 trial “undisputably showed ponatinib to be efficacious, a conclusion endorsed by FDA when it approved the drug in December 2012.” ARIAD Defs.’ Mem. 12. This argument, that eventual FDA approval excused the disclosure of certain facts in hindsight, is problematic because it ignores the “total mix” framework for materiality. Although the Plaintiffs concede that adverse event reports were made available (albeit “buried” in the FDA website in July 2012), and were discussed in part in ARIAD’s December 11th press release, the fact that the stock value plummeted twenty-one percent on December 14th, when ARIAD announced that eight percent of patients suffered serious cardiovascular adverse events, suggests that this information had a palpable impact on the market. Compl. ¶¶ 78-79, 88. These specific disclosures omitted material information to ARIAD investors, especially in light of how important the 45 milligram dosage level was for obtaining front-line approval. See Hill, 638 F.3d at 55 (1st Cir.2011) (“[T]he plaintiff must ‘specify each 'statement alleged to have been misleading [and] the reason or reasons why the statement is misleading.’ ”) (quoting ACA Fin. Guar., 512 F.3d at 58). While dosage reduction rates were material information, whether the Plaintiffs have alleged this material misrepresentation with scienter is less clear, and is discussed in Section IIB4 below. 3. Pre-Approval Statements: Positive Forecast on Ponatinib’s Safety and Efficacy Throughout the pre-approval stage, AR-IAD regularly updated investors regarding the potential approval and marketability of ponatinib, noting ongoing incidents of adverse events in the PACE 2 population. ARIAD’s forecast remained sunny throughout the Class Period, describing adverse events as “manageable” and “well-tolerated.” Compl. ¶ 3. Early in the Class Period, Berger told investors that he expected ponatinib to generate more than $600,000,000 in short-term sales and over $900,000,000 in long-term sales. Pls.’ Opp’n 7. In a December 2011 press release, ARIAD announced that preliminary data from the PACE trial presented a “favorable safety and tolerability profile of ponatinib in resistant or intolerant CML patients,” Compl. ¶ 146-47 (noting that the Class Period began on December 12, 2011, one day after the filing of ARIAD’s Form 8-K and press release). This press release listed common adverse events as including “rash,” “thrombocytopenia,” “dry skin,” “abdominal pain,” and “headache,” and noted four on-study deaths as possibly related to ponatinib. Id. ¶ 146 (omitting any mention of cardiovascular side effects). On January 12, 2012, Berger spoke at a healthcare conference “distinguishing] ponatinib from its competitors” as a “new class of drugs.” Pls.’ Opp’n 7-8. On February 13, 2012, Berger commented that “[i]t appears certainly from the preliminary data ... [a]dverse events ... are quite manageable and ... not something the physicians are concerned about.” Compl. ¶ 163. On December 11, 2012, an investment bank, Cowen and Company, published an analyst report which opined that “[p]onatinib’s profile continues to look very benign, with few worrisome signals.” Compl. ¶233. The most severe side effect discussed was a five percent rate of pancreatitis, but the report noted that “only one patient discontinued therapy because of pancreatitis.” Id. Emphasizing that Berger and other company officers had “real time access” and “daily data to the patient level,” Pls.’ Opp’n 20, the Plaintiffs argue that the ARIAD Defendants knew of much more severe side effects that were not disclosed until December 2012, including serious arterial thrombosis in eight percent of trial patients, congestive heart failure or left ventricular dysfunction in four percent of patients (with four fatalities), and “treatment-emergent hypertension” in sixty-seven percent of patients, Compl. ¶ 148. These adverse events were reported in the July 2012 Interim Report, which formed the basis of the December 2012 FDA approval and black box warning requirement. Id. ¶¶ 433, 435. Was ARIAD under an obligation to disclose the serious adverse events to investors prior to the December 2012 press release? This Court concludes that it was. In Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 131 S.Ct. 1309, 1321, 179 L.Ed.2d 398 (2011), the Supreme Court affirmed that Section 10(b) “do[es] not create an affirmative duty to disclose any and all material information.” Rather, the plaintiff must prove that “the defendant made a statement that was ‘misleading as to a material fact,’ ” which would have created “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 1318 (quoting Basic, 485 U.S. at 231-32, 238, 108 S.Ct. 978; accord Boston Sci. Corp., 686 F.3d at 27 (1st Cir.2012)). Addressing whether the disclosure of specific serious adverse events should have been disclosed, the Supreme Court in Matrixx held that the incidence of anosmia (loss of smell) in users of the drug, Zicam, although not arising to a level of statistical significance, was material information to the reasonable investor and ought thus have been disclosed. Matrixx, 131 S.Ct. at 1321 (“Given that medical professionals and regulators act on the basis of evidence of causation that is not statistically significant, it stands to reason that in certain cases reasonable investors would as well.”). The ARIAD Defendants argue that they were not obligated to disclose these serious adverse events because there was no proof that ponatinib caused the cardiovascular events at the time ARIAD spoke about ponatinib’s safety and tolerability. ARIAD Defs.’ Mem. 9. Specifically, they argue that serious arterial ischemic events and cardiovascular issues were due to preexisting risk factors in the study group and that the trial’s single-arm design did not allow the FDA to conclude whether ponatinib caused the adverse events. Id. They acknowledge that even had they known of the adverse events prior to the December 2012 press release, they (and “independent clinical investigators”) truly believed that ponatinib was not the cause. Id. (citing In re Rigel Pharm. Inc. Sec. Litig., 697 F.3d 869, 880 n. 8 (9th Cir.2012), which held “as long as the omissions do not make the actual statements misleading, a company is not required to disclose every safety-related result from a clinical trial, even if the company discloses some safety-related results and even if investors would consider the omitted information significant.”). Second, the ARIAD Defendants claim that they had “no way of knowing that FDA would ultimately require a boxed warning for adverse events that neither ARIAD nor FDA linked to ponatinib,” id., which as a result, renders their positive statements not misleading. Regardless, the Supreme Court has held that serious adverse events and fatalities can be deemed material to investors even at non-significant rates. Matrixx, 131 S.Ct. at 1322-23 (holding that the occurrence of anosmia in approximately ten Zicam users, was deemed material information to investors even though the rate of anosmia was not “statistically significant”). The fact that ARIAD’s stock price dropped more than twenty percent on December 14, 2012 with the “revelation of the significant safety issues,” Pls.’ Opp’n 12, and dropped again on October 9, 2013, with the announcement of more cardiovascular adverse events and the suspension of the EPIC trial, id. at 16, strongly indicates that these adverse events were material to ARIAD investors. See also Compl. ¶¶ 283-85 (the October 2013 disclosure indicated a higher rate of serious arterial thrombosis in 11.8 percent of subjects, and a study-wide dosage reduction to 30 mg of ponatinib). Even analysts noted they were unaware of serious ischemic events until the December 2012 issuance of a black box warning, stating that “the large number of side effects and the severity of the side effects came as a surprise to the investment community.” Pls.’ Opp’n 12-13. Finally, ARIAD itself seemed to treat adverse events as having been caused by ponatinib, as evidenced by how ponatinib use was discontinued in patients experiencing arterial thrombotic events, and by the noted occurrences of “treatment-emergent hypertension” in the trial. Compl. ¶¶ 78-79. The market’s reaction to the December 2012 disclosures strongly suggests that the rates of serious ischemic events altered the “total mix” of information relied on by investors. Even though ARIAD was not obliged to disclose all adverse events from their clinical trials, Matrixx, 131 S.Ct. at 1321, the market’s sharp reaction to the black box warning, combined with AR-IAD’s own assessment of adverse events as having been caused by ponatinib, indicates that the rate of serious cardiovascular events should have been disclosed in a non-misleading manner. Whether the ARIAD Defendants made these positive statements knowing they were misleading is not explicitly supported in the pleadings. The ARIAD Defendants argue that the Plaintiffs fail to specify when and what information was known at the times pre-approval statements were made to investors. ARIAD Defs.’ Mem. 8. For example, early statements from December 2011 that ponatinib was “well tolerated” may have well been true at the time they were made, because serious ischemic events (disorders related to the deficiency of blood flow to a part of the body) were not observed until a full year later. Id. (citing to the July 23, 2012 “updated data cut-off date” where ischemic events were measured in eight percent of patients). Indeed, the Plaintiffs allege that the July 2012 Interim Report data were “facts contemporaneously known” to ARIAD at the time the statements were made, Compl. ¶ 151, but how this constitutes a “conscious[ ] inten[t] to defraud” or a “high degree of recklessness,” In re Genzyme Corp. Sec. Litig., 754 F.3d 31, 40 (1st Cir.2014) (quoting Mississippi Pub. Emps. Ret. Sys. v. Boston Sci. Corp., 523 F.3d 75, 85 (1st Cir.2008)), is left unexplained. First, the fact that ARIAD was under the close supervision of the FDA in the run-up to its eventual approval cuts strongly against any inference that ARIAD was acting recklessly in hiding serious ischemic events from investors. Second, the complaint is devoid of specific allegations as to how ARIAD or the Individual Defendants actively sought to conceal negative information from investors or the FDA. While this Court views serious ischemic events as material information to investors, the Plaintiffs have not demonstrated how these pre-approval omissions were made with intent to defraud and, as a result, scienter is not here adequately alleged. 4. Post-Approval Statements: Continuing Positive Outlook on Ponatinib’s Success The Plaintiffs allege that after receiving second-line FDA approval in December 2012, the Defendants continued to make statements attempting to convince the market that the negative announcements regarding the black box warning label were minor setbacks, and that ponatinib was on its way to front-line approval. Pls.’ Opp’n 25. The Plaintiffs claim that partial, misleading disclosures were made in ARIAD’s March 2013 Form 10-K and Form 8-K, in its April 2013 Investor Conference Call, in the May 2013 Form 10-Q, and at a healthcare conference and shareholder meeting. See Compl. ¶¶ 248-282. For example, analysts were told that “[adverse events] are likely due to the underlying disease and pre-existing condition of the patients,” id. ¶ 247, and that “ARIA[D] noted no major hurdles to [ponatinib] adoption in the estimated 2,500 CML patients switching from alternative [tyrosinekinase inhibitors], which we believe is illustrated by the early use of the drug in the 2nd-line setting.” Id. ¶ 265. At a June 2013 healthcare conference hosted by Goldman Sachs, Berger stated that “the patients in the PACE trial were heavily skewed in terms of preexisting multiple cardiovascular risk factors.... So, this is not your average population.” Id. ¶ 274. The Plaintiffs claim the “full truth” was revealed to the market , in October 2013, marking the end of the Class Period. Id. ¶ 380. The turning point came when AR-IAD announced that it was pausing enrollment in all clinical studies of ponatinib pending changes in dose and other modifications, and that the dose for current patients enrolled in their Phase 3 EPIC trial would be reduced to 30 milligrams across the group. Id. ¶ 283. Further, ARIAD disclosed that the ponatinib trials would be modified to exclude patients with a history of arterial thrombosis resulting in heart attack or stroke. Id. This is not surprising, in light of the additional PACE 2 results released on this date, which included an increased percentage of patients with serious arterial thrombosis (now 11.8 percent of trial subjects), serious venous occlusion in 2.9 percent‘of subjects, and a twenty percent combined rate of non-serious and serious cardiovascular adverse events. Id. ¶ 284 (reflecting data from twenty-four months of the clinical study). This news caused ARIAD’s share price to drop sixty-six percent in value, from $11.31 to $5.83 per share. Id. ¶ 285. The same day, Haluska continued to blame pre-existing risk factors in the PACE 2 patient population, and stated that “we are very confident that at the end of the day, with the dose reduction scheme that we have and the high circulating levels that can be achieved with lower doses than 45 milligrams, that the EPIC [Phase 3] trial has an excellent likelihood of being a positive trial with an appropriate benefit/risk balance.” Id. ¶ 288. The ARIAD Defendants argue that their statements were not misleading because all of the challenged information regarding serious adverse events was disclosed in the December 2012 boxed warning and press release. ARIAD Defs.’ Mem. 13. Because this information and warning included the rate of dose reduction and incidence of adverse events, the ARIAD Defendants argue that they cannot be liable for subsequent statements expressing their continuing confidence in the drug. Id. They rely on In re XM Satellite Radio Holdings Sec. Litig., 479 F.Supp.2d 165, 181 (D.D.C.2007), which stated: “[A] company has no duty to disparage its own competitive position in the market where it has provided accurate hard data from which analysts and investors can draw their own conclusions about the company’s condition and the value of its stock.” (internal citations omitted). The ARIAD Defendants further' attack the Plaintiffs’ allegations as failing to state what information ARIAD knew at the time they made the post-approval statements, specifically, what facts were “contrary to the optimism ARIAD was portraying publicly.” ARIAD Defs.’ Reply 9. In response, the Plaintiffs rely on general allegations that ARIAD “must have known, because it eventually knew, that the rate of cardiovascular events had increased.” Id. Here, the Defendants have the stronger argument. While the Complaint contains reports from analysts that mark frustration with the partial disclosures and the ensuing dips in stock price, Compl. ¶ 298 (“Management had repeatedly asserted safety concerns for [ponatinib] were a Wall Street misconception”), the Plaintiffs do not pinpoint exactly what clinical trial data was known by the Defendants in 2013 at the time they made post-approval statements touting the safety and efficacy of ponatinib. 5. Scienter: Insider Trading Allegations Accordingly, the Court takes a closer look at the Plaintiffs’ allegations of insider trading to see if these claims bolster their scienter theory. The Plaintiffs attempt to bolster their scienter theory with allegations that the Individual Defendants, all ARIAD officers, engaged in sudden and unusual sales of stock during the Class Period. Compl. ¶¶ 9397. Although the Plaintiffs provide a cogent argument that insider trading was taking place, this evidence, along with all other allegations of scienter, insufficiently supports that material misrepresentations were knowingly or recklessly made by the ARIAD Defendants. The Plaintiffs support their scienter theory by highlighting the Individual Defendants’ large and unusual Class Period stock sales which generated “enormous abnormal profits,” especially in light of the fact that ponatinib was ARIAD’s most important product. Pls.’ Opp’n 28; see also Compl. 103. It is clear that the four Individual Defendants engaged in vastly different sales practices before the Class Period as compared to during the Class Period: stock sales prior to the Class Period totaled $666,000, but sales during the Class Period exceeded $28,000,000. Pls.’ Opp’n 28. Berger, for example, did not sell any AR-IAD shares in the twenty-two months pri- or to the Class Period, but sold approximately $16,964,700 in stock during the same amount of time during the Class Period. Id. at 29. The Plaintiffs also allege that the Individual Defendants’ shares were sold in irregular amounts and intervals throughout 2012, rather than in the pre-determined amounts and intervals commonly found under Rule 10b-5-1 trading plans. Compl. ¶¶ 366-367. Rule 10b5-1 trading plans provide an affirmative defense for insiders who trade before they become aware of insider knowledge, and do so in good faith “and not as a part of a plan or scheme to evade the prohibitions” against insider trading. See SEC Rule 10b5-1(c); Compl. ¶ 358. The Individual Defendants however, enacted their trading plans during the Class Period (Clackson, Fitzgerald, and Haluska enacted ten days into the Class Period, and Berger enacted his plan in December 2012). Pls.’ Opp’n 31; see also Freudenberg v. E*Trade Fin. Corp., 712 F.Supp.2d 171, 201 (S.D.N.Y.2010) (holding that “[t]rading plans are not a cognizable defense to scienter allegations on a motion to dismiss where, as here, they were adopted during the Class Period”). Berger’s trading plan, enacted in late December 2012 after the announcement of FDA approval, “was purportedly designed to sell 100,000-share blocks of stock at monthly intervals from March through August 2013 whenever ARIAD’s share price rose above a predetermined floor price” which allowed Berger to realize over $16,000,000 in profits. Compl. ¶ 94. The Individual Defendants explain that the sharp contrasts in sales were based on tax reasons and were enacted after adverse events from the PACE trial were disclosed. ARIAD Defs.’ Mem. 14 (“A generic profit motive ... is too universal to demonstrate scienter in a specific case.”); see also ARIAD Defs.’ Reply 12-13. Moreover, they argue that the Plaintiffs fail to demonstrate how these trading plans were used “to avoid a stock price drop anticipated from their foreknowledge of a release of bad news.” Id. at 13. This Court acknowledges that the sheer contrast in trading volume and frequency before and after the Class Period supports an allegation of insider trading, suggesting that strategic sales were made in light of key non-public information arising from the PACE trial. But the allegations of insider trading do not amount to a strong inference of scienter, even coupled with other allegations in the complaint. As analyzed above, the complaint generalizes claims that Individual Defendants knowingly withheld material information relating to results of the PACE 2 trial. The Plaintiffs fail to connect exact disclosures with specific conduct or inside knowledge of clinical data. Even with their stronger insider trading claim, the Plaintiffs are unable to connect exact trading periods with specific, negative results from the clinical trial. This leaves the Court unable to glean a strong inference of scienter from the facts alleged. On this basis, the Court GRANTS the ARIAD Defendants’ Motion to Dismiss Section 10 and Rule 10b-5 claims for a failure to state a claim. C. Count II: Section 20(a) Claims Because claims brought under Section 20(a) of the Exchange Act are derivative of Rule 10b-5 claims, liability can attach only to a person who is liable for violating a substantive provision of the Exchange Act. See Hill, 638 F.3d at 53; see also Janus Capital Grp., Inc. v. First Derivative Traders, 564 U.S. 135, 131 S.Ct. 2296, 2310, 180 L.Ed.2d 166 (2011) (“More importantly, a person who is liable under § 20(a) controls another “person” who is “liable” for a securities violation.”) (internal citation omitted). Because the Court dismisses Section 10 claims against the ARIAD Defendants, no Section 20 liability can be assigned to the four Individual Defendants named in this action. D. Conclusion The Court GRANTS the ARIAD Defendants’ motions to dismiss Counts I and II under Section 10 and Section 20. The Plaintiffs’ Section 11 and Section 15 claims are discussed below in conjunction with the same claims brought against the Underwriters. III. ANALYSIS: Claims Against the Underwriters Defendant The Plaintiffs allege that the ARIAD and Underwriter Defendants are liable under Section 11 of the Securities Act of 1933 for alleged misstatements and omissions in stock offering materials. Compl. ¶416. ARIAD and the Underwriter Defendants seek dismissal of all Section 11 claims against them on the basis that the Plaintiffs lack standing and that they fail to state a claim. See ARIAD Defs.’ Mem. 17-20; see also Underwriter Defs.’ Mem. 1. A. Legal Standard: Section 11 and Section 15 of the Securities Act Section 11 of the Securities Act creates a cause of action empowering purchasers of securities offered under a false or misleading registration statement to sue certain enumerated parties. Specifically, the statute “impos[es] a stringent standard of liability on the parties who play a direct role in a registered offering,” Herman & MacLean v. Huddleston, 459 U.S. 375, 381-82, 103 S.Ct. 683, 74 L.Ed.2d 548 (1983), a category which includes participating underwriters. See 15 U.S.C. § 77k(a)(5). As mentioned above, the Section 11 claims in this action do not sound in fraud and are subject to the ordinary pleading standards under Rule 12 of the Federal Rules of Civil Procedure. Section 15 of the Securities Act imposes secondary liability on “control persons” of a company for violations of Sections 11 and 12 of the Securities Act. Joint and several liability attaches “only to the extent primary liability first attaches to a ‘controlled person.’” Lenartz, 879 F.Supp.2d at 188 (“Section 15 imposes joint and several liability on any person who, through stock ownership, agency or otherwise, controls any person liable under Section 11 or Section 12.”). To prove a violation, the plaintiffs “must allege 1) an underlying violation by the controlled person or entity and 2) that the defendants controlled the violator.” In re Evergreen Ultra Short Opportunities Fund Sec. Litig., 705 F.Supp.2d 86, 96 (D.Mass.2010) (Gorton, J.) (citing Aldridge v. A.T. Cross Corp., 284 F.3d 72, 85 (1st Cir.2002)). B. Standing The ARIAD Defendants and Underwriters challenge the Plaintiffs’ standing to bring Section 11 claims against them. See Underwriter Defs.’ Mem. 4-8; see also ARIAD Defs.’ Mem. 17-20. According to the Underwriters, the Plaintiffs have not sufficiently alleged that they purchased ARIAD shares issued under the challenged 2013 Offering, as opposed to AR-IAD shares issued in previous stock offerings. Underwriter Defs.’ Mem. 5-6. Section 11 confers standing only on persons who acquired the specific securities issued under the challenged registration statement. 15 U.S.C. § 77k(a) (referring to “any person acquiring such security”). This requirement is satisfied whether the plaintiff purchased shares in the public offering itself or in the secondary market, so long as the plaintiff can trace the origin of his shares back to the offering in dispute. In re Number Nine, 51 F.Supp.2d at 11-12. It follows that a person holding shares issued in a different, undisputed offering does not have standing to join a Section 11 action, as he cannot be said to have relied on the purportedly fraudulent registration materials. See Plumbers’ Union Local No. 12 Pension Fund, 632 F.3d at 768 n. 5 (incorporating by reference and quoting the holding in Barnes v. Osofsky, 373 F.2d 269, 273 (2d Cir.1967), that only “those who purchase securities that are the direct subject of the prospectus and registration statement” may bring a Section 11 claim). At the motion to dismiss stage, the relevant issue for the Court to analyze is whether the Plaintiffs adequately have pled that they purchased securities traceable to the challenged offering. The parties in this action disagree as to the appropriate standard of pleading. The Plaintiffs contend that general allegations, akin to notice pleading, are sufficient in the First Circuit. Pls.’ Opp’n 35-37. But the Underwriters argue that in the wake of Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), more is required. 1. This Court’s Rule Prior to Twombly and Iqbal Case law preceding the publication of Twombly and Iqbal shows that in the District of Massachusetts prior to 2007, this issue was settled by a line of cases analyzing the impact of Gustafson v. Alloyd Co., Inc., 513 U.S. 561, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995), on Section 11 standing. This Court’s practice has been to hold general allegations sufficient to survive a motion to dismiss for lack of standing. E.g. In re Number Nine, 51 F.Supp.2d at 9, 11-12 (denying a motion to dismiss because the complaint alleged simply that the plaintiffs purchased securities “in or traceable to” the contested stock offering). This is consistent with the pre-2007 rulings of other sessions in the District of Massachusetts. See, e.g., In re Transkaryotic Therapies, Inc. Sec. Litig., 319 F.Supp.2d 152, 159 (D.Mass.2004) (Zobel, J.) (holding a plaintiffs allegation that he purchased shares traceable to a specific offering sufficient to state a Section 11 claim); In re WebSecure, 182 F.R.D. at 367-68 (D.Mass.1998) (O’Toole, J.) (ruling that proper standing was pled by unvarnished allegations that plaintiffs “purchased their stock pursuant to or traceable to the defective Registration Statement”) (quotation marks omitted); Cooperman v. Individual, Inc., No. 96-12272-DPW, 1998 WL 953726, at *7 (D.Mass. May 27, 1998) (Woodlock, J.) (“Plaintiffs have standing under Section 11 if they purchased shares ... ‘traceable to’ the public offering. Because Plaintiffs allege as much in the Complaint, I will not grant the motion to dismiss on this ground.”) aff'd on other grounds, 171 F.3d 43 (1st Cir.1999). This issue has not been squarely addressed by the First Circuit or revisited in the District of Massachusetts since the publication of Twombly and Iqbal. 2. Developments Since Twombly and Iqbal Jurisprudence is emerging in at least one other circuit holding that Section 11 standing must be pled with greater particularity than the standard articulated above. The most prominent decision promulgating this interpretation recently was rendered by the Ninth Circuit in In re Century Aluminum Co. Sec. Litig., 729 F.3d 1104 (9th Cir.2013). In that case, the Ninth Circuit observed that although general allegations of traceable stock purchases were “probably” sufficient to survive a motion to dismiss before 2007, “Iqbal and Twombly moved us away from a system of pure notice pleading.” Id. at 1107. The Ninth Circuit applies this principle by requiring particular factual specificity when the plaintiffs hold shares that could have been issued in any one of multiple stock offerings. Under In re Century Aluminum, this standard expressly cannot be satisfied by a “conclusory allegation” that plaintiffs purchased stock directly traceable to a particular offering. Id. at 1108. Because “experience and common sense tell us that ... [such] aftermarket purchasers usually will not be able to trace their shares back to a particular offering,” plaintiffs must “allege facts from which we can reasonably infer that their situation is different.” Id. at 1107-08. The In re Century Aluminum plaintiffs attempted to accomplish this by showing that they purchased shares during periods of extreme change in trading volume and stock price, likely attributable to the issuance of new shares flooding the secondary market. Id. at 1108. But the Ninth Circuit ruled that such evidence was insufficient to support a reasonable inference that the plaintiffs’ shares were traceable to any particular offering. “[T]he ‘obvious alternative explanation’ [was] that [the shares] could instead have come from the pool of previously issued shares. Plaintiffs’ allegations [were] consistent with their shares having come from either source.” Id. (citing Twombly, 550 U.S. at 567, 127 S.Ct. 1955) (internal citation omitted). Without “facts tending to exclude the possibility that the alternative explanation is true,” the plaintiffs’ explanation was “merely possible rather than plausible.” Id. At the district court level, a split on this issue is emerging. In addition to the decisions of district courts bound by this precedent, at least two district court decisions outside of the Ninth Circuit have endorsed a similar approach to pleading Section 11 standing. See Ho v. Duoyuan Global Water, Inc., 887 F.Supp.2d 547, 561 (S.D.N.Y.2012); Grand Lodge of Pa. v. Peters, 550 F.Supp.2d 1363, 1376 (M.D.Fla.2008). Recent decision's of other district courts, however, hold that general allegations of traceability continue to be sufficient to allege Section 11 standing. See In re Mun. Mortg. & Equity, LLC, Sec. & Derivative Litig., 876 F.Supp.2d 616, 657-58 (D.Md.2012); In re Wachovia Equity Sec. Litig., 753 F.Supp.2d 326, 373 (S.D.N.Y.2011); see also Northumberland Cnty. Ret. Sys. v. Kenworthy, No. CIV-11-520-D, 2013 WL 5230000, at *6 (W.D.Okla. Sept. 16, 2013); Perry v. Duoyuan Printing, Inc., No. 10 Civ. 7235 GBD, 2013 WL 4505199, at *9-10 (S.D.N.Y. Aug. 22, 2013). The Defendants more or less urge this Court to disregard any decision relying on pre-Twombly and pre-Iqbal cases. Underwriter Defs.’ Reply 3. Twombly and Iqbal did not, however, so fundamentally alter the Rule 8 pleading standards so as to render all prior pleading jurisprudence immaterial. Surely the district court decisions holding that general allegations continue to suffice post-Twombly and Iqbal recognized those Supreme Court precedents. Those courts simply reached a conclusion different from the Ninth Circuit as to the effect of" Twombly and Iqbal on Section 11 standing allegations. 3. Maintaining the Court’s Previous Rule In the absence of additional guidance or evidence that the Ninth Circuit is not an outlier among circuits on this issue, this Court takes a conservative approach to the Underwriters’ challenge and hews to the established pre-Twombly standard. This Court holds that general allegations that the Plaintiffs hold traceable shares are sufficient to plead standing under Section 11, even if those allegations are unaccompanied by more specific corroborating allegations. Under this rule, the Plaintiffs’ complaint passes muster, and the Court DENIES the ARIAD and Underwriter Defendants’ motion to dismiss for lack of standing. C. Material Misstatements and Omissions The Underwriters argue in the alternative that the Plaintiffs have failed to allege actionable misstatements or omissions made in the Offering Materials. To make out a Section 11 violation, the Plaintiffs “need only show a material misstatement or omission to establish [their] prima facie case.” Herman & MacLean, 459 U.S. at 382, 103 S.Ct. 683 (1983). The First Circuit has identified four elements that must be alleged: “(1) that [the company’s] prospectus contained an omission; (2) that the omission was material; (3) that defendants were under a duty to disclose the omitted information; and (4) that such omitted information existed at the time the prospectus became effective.” Cooperman, 171 F.3d at 47. In their complaint, the Plaintiffs refer to misstatements and omissions in three areas: (1) the alleged increasing incidence of “serious cardiovascular adverse events” related to ponatinib throughout 2012, e.g., Compl. ¶ 446, (2) the alleged infeasibility of the recommended prescribed 45 milligram dose of ponatinib in the majority of patients, e.g., id. ¶ 447-48, and (3) the allegedly dwindling potential of ponatinib’s approval for front-line use, e.g., id. ¶ 449. The Plaintiffs additionally allege that the Offering Materials failed to disclose “that the incidence of adverse cardiovascular events in PACE 2 had or was reasonably expected to have a material ... unfavorable impact on ... revenues,” in violation of Item 303 of Regulation S-K. Id. ¶ 472 (internal quotation marks omitted). According to the Underwriters, all material information related to these claims and existing as of January 2013 was fully and accurately disclosed. They contend that the Plaintiffs have failed adequately to allege that their assertions regarding adverse cardiovascular events, dosage, and ponatinib’s potential for front-line use were true and known to the Underwriters at the time of the January 2013 stock offering. See Underwriter Defs.’ Mem. 8-20. 1. Trends in Adverse Cardiovascular Events The parties disagree as to whether information about adverse cardiovascular events related to ponatinib was fully disclosed in the Offering Materials. The Underwriters assert that such information was fully disclosed because the Offering Materials expressly incorporated, among other things, the results of ARIAD’s July 2012 Interim Report on the progress of its PACE 2 trials. Id. at 8. The Plaintiffs counter that the Offering Materials contained no information on PACE 2 results between July 2012, the cut-off date of the interim report, and January 2013, the time of the stock offering. Pls.’ Opp’n 38. During this time, the Plaintiffs say, the incidence of adverse events was worsening, which would have been material to prospective investors. Id.; see also Compl. ¶ 462. a. The July 2012 Interim Results It is undisputed that at the time of the January 2013 Stock Offering, the information available to investors about a possible link between ponatinib and adverse cardiovascular events was not uniformly positive. Recall that one month before the offering, on December 14, 2012, ARIAD issued a press release announcing the FDA’s limited approval of the drug with a serious “black box” warning on its label. Compl. ¶ 435. The announcement of this development made public the results from the July 2012 Interim Report on the progress of the PACE 2 clinical trials, as that report was the basis for the FDA’s decision to grant conditional- approval. Id. According to the Plaintiffs’ complaint, the July 2012 Interim Report “showed an increase in both adverse and ‘serious’ adverse cardiovascular events in patients taking ponatinib.” Id. ¶ 433. Accordingly, the drug’s black box warning was required to list several types of adverse cardiovascular events experienced by ponatinib-treated patients and specifically disclose that “serious arterial thrombosis occurred in 8 [percent] of ... patients.” Id. ¶ 435. b. August 2013 Results as a Basis for Alleging Trends Between July 2012 and January 2013 The Underwriters vigorously attest that these developments and underlying data were fully disclosed in the Offering Materials. Underwriter Defs.’ Mem. 8. The Plaintiffs do not dispute this, but they point out that by the time of the stock offering, ARIAD had collected approximately six months of additional clinical trial data beyond July 2012, none of which was provided to participating investors. Pls.’ Opp’n 38. The December disclosure that eight percent of patients experienced arterial thrombosis was, according to the Plaintiffs, only a “snapshot in time of adverse event data” as of July 2012, “reveal[ing] nothing about the trends or uncertainties then known to Defendants” as of January 2013. Id. at 39. The Plaintiffs’ complaint and brief go on to allege that the PACE 2 data from July 2012 through January 2013 was unfavorable and “gave rise to material, adverse facts, trends, and uncertainties” req