Lessons From In Re Rigel Pharmaceuticals
Lane Powell attorneys Doug Greene and Kristen Tranetzki co-authored an article on September 19 in Law360 titled “Lessons From In Re Rigel Pharmaceuticals.” The article discusses the Ninth Circuit’s recent affirmance of the dismissal of In re Rigel Pharmaceuticals Inc., a putative securities class action. Plaintiffs alleged that the clinical-stage drug development company made false or misleading statements regarding the results of a clinical drug trial. The district court dismissed the action. The Ninth Circuit affirmed. Greene and Tranetzki commented on the Ninth Circuit’s decision:
There are four main takeaways from Rigel. First, it clearly establishes that mere disagreement over scientific methods is insufficient to plead falsity for a securities fraud claim. Second, it reaffirms that a statement is not false simply because it is an incomplete statement; it must be misleadingly incomplete. Third, it implicitly applied the rule that statements of opinion or belief are actionable only where the speaker does not believe the stated opinion or belief. Fourth, it reaffirms three important components of a scienter analysis: generic corporate motives, without more, are insufficient to plead scienter; the absence of insider stock sales undermines scienter; and actions inconsistent with scienter suggest its absence.