Law 360: Pharma Co. Amarin Beats Class Action Over Patent Issues

September 27, 2024

Law360 — A New Jersey federal judge has tossed a proposed class action against pharmaceutical company Amarin and its top brass, alleging they misled shareholders about their products and the prospects of related patent litigation, saying the investors have failed to plead any actionable misleading statements or omissions made by the defendants.

U.S. District Judge Robert Kirsch issued an opinion on Wednesday saying the suing shareholders have not adequately alleged that any of the defendants’ statements about litigation in Nevada over its lead product’s patent, the product’s characteristics or Amarin’s financial prospects are actionable since they are all opinions accompanies by appropriate disclosures.

According to the opinion, the defendants argued in their dismissal motion that statements made regarding their “belief” that certain patents for their product, Vascepa, would be upheld following litigation in Nevada were simply beliefs and nothing more.

Judge Kirsch agreed on Wednesday, saying the fourteen challenged statements related to this aspect of the suit are “plainly opinions.” The judge noted that before a decision was handed down in the litigation, the defendants’ statements characterized the proceedings as going “very favorably” for Amarin. Even as the company lost and appealed to the Federal Circuit, the statements continued expressing optimism about the litigation’s potential outcome, the opinion states.

“These statements about the litigation … put forward Amarin’s belief about the strength of their patents, rather than asserting positive knowledge of what the outcome of the litigation would be,” the opinion states. “These statements were accompanied, often contemporaneously but also in Amarm’s SEC filings from around the same time, with meaningful, specific warnings disclosing specific risks, such as that [John Thero, Amarin’s CEO] ‘can’t make any predictions [about the Nevada litigation] other than stating that we intend to defend our patents vigorously.'”

Regarding statements made about Vascepa’s “unique” properties, Judge Kirsch called them “inactionable puffery.”

“Statements that a drug product is ‘unique,’ ‘far superior’ to other generic drugs, should do ‘very well’ and will be ‘well received’ are puffery because they are ‘not the kind of statements that a reasonable investor would have relied upon,'” the judge said.

Judge Kirsch also held that challenged statements about Amarin’s financial prospects are not materially false or misleading for similar reasons, that they express the defendants’ “belief in the scope of Vascepa’s success.”

He also found that the suit fails to plead a strong inference of scienter, or knowledge of wrongdoing by the individual defendants.

“Plaintiffs’ allegations that the individual defendants were focused on Vascepa and winning the Nevada litigation does not carry the inference that they therefore knew or recklessly disregarded the patents’ vulnerabilities,” the opinion states. “The fact that a company officer makes a statement about a topic does not necessarily support the inference that he knows all facts relevant to that topic.”

Additionally, several executives’ departures from Amarin following the loss of the patent for Vascepa do not support an inference of scienter, the judge said.

“The amended complaint does not allege that the departures were either contemporaneous with the announcement of bad news or accompanied by any punishment,” the opinion states. “Amarin’s loss in the Nevada litigation did not ‘reveal’ any wrongdoing … therefore, the fact that two individual defendants’ departures from the company followed the court decisions, absent any allegation that they were in any way punished or censured, does not evidence scienter.”

The suit, filed in 2021, alleged that Amarin and three of its officers made misleading statements and omissions about Vascepa, its patent and the company’s financial prospects, which caused Amarin’s share price to remain artificially high. When Amarin lost litigation over certain of its patents for Vascepa, the company’s share price dropped, damaging investors, according to the complaint.

Counsel for the defendants declined to comment on Friday, and counsel for the investors did not immediately respond to requests for comment.

The investors are represented by Christopher A. Seeger and Christopher L. Ayers of Seeger Weiss LLP and by Jeffrey J. Stein, Jennifer N. Caringal and Kenneth P. Dolitsky of Robbins Geller Rudman & Dowd LLP.

Amarin and the individual defendants are represented by Eric T. Kanefsky and Martin B. Gandelman of Calcagni & Kanefsky LLP and by Meredith Kotler, Peter J. Linken, Boris Feldman, Becky Lockert and David Howard of Freshfields Bruckhaus Deringer US LLP.

The case is Dang v. Amarin Corporation PLC, case number 3:21-cv-19212, in the U.S. District Court for the District of New Jersey.

By Katryna Perera

— Editing by Vaqas Asghar

Article source here : Law 360