On Thursday, the Northern District of California issued an order granting BioMarin Pharmaceutical Inc.’s motion to dismiss the class action securities lawsuit against it.
According to the order, BioMarin is a biotechnology company that develops and commercializes therapies to address rare diseases and medical conditions. Further, the other named defendants, Jean-Jacques Bienaimé, Henry J. Fuchs and Lon Cardon, are officers of BioMarin.
The order states the present lawsuit revolves around false and misleading statements and omissions related to a new gene therapy, BMN 307, BioMarin was developing for the treatment of phenylketonuria.
The court states that, during BioMarin’s 2018 R&D Day, an event directed towards investors and analysts, the company announced the development of BMN 307. At the next year’s R&D Day, BioMarin announced that its investigational, new drug submission to the Food and Drug Administration (FDA) was imminent. Further, on January 13, 2020, BioMarin announced that BMN 307 had been approved for clinical trials and on April 29, 2020, the company confirmed BMN 307 was in the “‘Clinical Phase 1/2’ stage.”
The lead plaintiffs, Local 282 Pension Trust Fund and Local 282 Annuity Trust Fund, allege that, since BioMarin’s 2018 R&D Day until February 23, 2022, BioMarin made false and misleading statements and omissions regarding the status and development of BMN 307. Specifically, the plaintiffs purport that BioMarin failed to disclose it observed liver tumors in a pre-clinical mouse study for BMN 307. The plaintiffs further argue the FDA placed a clinical hold on Phase 1/2 testing of BMN 307 due to the liver tumors which caused a drop in the price of BioMarin stock.
The plaintiffs subsequently filed the present class action on behalf of themselves and other owners of BioMarin stock against BioMarina and its officers alleging violations of the Securities Exchange Act for BioMarin’s allegedly false and misleading statements regarding BMN 307. Conversely, BioMarin and its officers filed a motion to dismiss alleging the plaintiffs failed to adequately plead and identify the false and misleading statements they challenge.
Through the order, the court agreed with the defendants’ argument and dismissed the plaintiff’s complaint. The court found the plaintiffs failed to identify and give fair notice of the grounds for their claims. Further, the order states the plaintiffs failed to identify any false statements and rather identified optimistic statements with a lack evidence or reasoning to support their claim that the statements are misleading or untrue. Accordingly, the court granted the defendants’ motion to dismiss, but gave the plaintiffs leave to amend the complaint.
The plaintiffs are represented by Robbins Geller Rudman & Dowd LLP and Pomerantz LLP, and the defendants are represented by Cooley.
