On March 2, 2023, the Fourth Circuit affirmed dismissal of a securities class action filed against Wilson Sonsini clients MacroGenics, Inc. and its CEO and CFO. The complaint concerned statements made by the defendants regarding the results of MacroGenics’ Phase III clinical trial of a therapeutic used to treat patients with late-stage metastatic breast cancer. The plaintiff alleged that the defendants made misleading statements by disclosing that the clinical trial met one of its primary endpoints (“progression free survival”), but not simultaneously disclosing data regarding another still accruing endpoint (“overall survival”) and stating that overall survival showed a “preliminary positive trend.” In September 2021, Judge Hazel of the U.S. District Court for the District of Maryland dismissed the complaint with prejudice, finding that the plaintiff failed to plead any actionable misrepresentation or omission and the allegations failed to raise a strong inference of scienter. 

The Fourth Circuit affirmed on multiple grounds in a published, precedential opinion. The court ruled both that disclosing progression free survival data and generally optimistic statements about overall survival did not give rise to a duty to disclose more detailed overall survival data, and that many of the defendants’ statements were inactionable puffery, opinions regarding the interpretation of scientific data, or protected forward-looking statements. Further, the court recognized the real-world implications that a contrary ruling could have had on biopharmaceutical clients and the patients they serve, explaining: “It would be a great disservice to stifle biopharmaceutical companies’ pursuit of medical advancements by failing to safeguard against an inundation of lawsuits alleging securities-law violations.” 

The Wilson Sonsini team representing MacroGenics and its officers included Nicki Locker, Steffen Johnson, Jeremy Gagas, John Kenney, Robyn Finnimore-Pierce, Deborah Bellinger, Linda Koontz, and Cynthia Soto Hopp.