[00:00:01] Speaker 02:
Good morning, Your Honors, and may it please the Court.

[00:00:04] Speaker 02:
Brian P. O'Connell on behalf of the Appellants.

[00:00:08] Speaker 02:
If it's okay, I would like to reserve three minutes for rebuttal.

[00:00:11] Speaker 02:
Thank you.

[00:00:12] Speaker 02:
Your Honors, plaintiffs have brought a strong, well-planned case against a drug company, then known as XLRX, now known as Telfera, that touted its only approved product, Dysubia, a painkiller ten times the strength of fentanyl,

[00:00:27] Speaker 02:
and 500 times the strength of morphine as a simple to administer tongue-in-dung process, while omitting clear steps, dosage information, and information on Dysuvia that were all required under the company's REMS, Risk Evaluation and Mitigation Strategy, for which the FDA conditioned its approval of the drug.

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The drug was only approved after the REMS program was submitted five different times.

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As alleged in the complaint,

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The REMS is a rare program that applies only to dangerous substances and when there presents safety concerns.

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XLRX was approved for marketing only consistent with these specified REMS instructions.

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Downplaying or omitting REMS in promotional materials is unlawful and has historically triggered the issuance of FDA warning letters.

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By touting the drug as tongue and tongue,

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to investors and medical professionals, the drug was misbranded under Section 352A1 of the Federal Food Drug and Cosmetic Act, FDNC.

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Defendants made these tongue-in-dung statements to assure investors that the total addressable market for D'Souvia was, in fact, larger than it was.

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XLRX's misleading description of D'Souvia's administration was consistent with Engadi's aim, Defendant Engadi, the CEO,

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of expanding D'Souvia's market to include settings where monitoring was less restrictive.

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This was done while defendants simultaneously marketed D'Souvia outside the context of emergency medical centers.

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Just before the class period began, a regional medical director at the company warned the CEO, Vince Angati, and the chief medical officer, Pamela Palmer, that the tongue and dung campaign was misleading

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and could subject them to FDA punishment.

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Numerous former employees corroborated this director's concern, as multiple former employees refused to deploy this.

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So they said that they were told it was misleading, not that it was false, right?

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They were told that it was misleading and could subject them to an FDA warning letter specifically.

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This was the regional medical director

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who presented this information to Palmer, first in private, and then at a meeting later that day, both to Palmer and Angati.

[00:03:04] Speaker 01:
The one thing I'm struggling with your argument here is if this were just a household item and we were applying a reasonable consumer standard, I think you might have a better case because we assume reasonable consumer picks up an item on the store shelf, looks at it for two, three seconds, something on the box, and believes it and puts it in the shopping cart.

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But here we're talking about a reasonable investor standard.

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much more sophisticated.

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So, I mean, the slogan, tongue and done, clearly that's kind of cute little catchphrase, but, I mean, you wouldn't expect an investor just to look at that and then make all these assumptions.

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And before they invest money, they'll look at all the context, do a little bit more due diligence.

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So, I mean, the tongue and done in isolation, maybe it's misleading, but I think we, you know, have to look at the broader context for a reasonable investor.

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Sure.

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Your Honor, one example would be the Oppenheimer Conference, which was March 20, 2019, when Engadi gave a talk about the administration of the use.

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And he parroted this tongue-in-dun language to the investor.

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He said, I might be misquoting it slightly, but it's in the record.

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He said, you lift up your tongue, you inject it, and then you're done.

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It's as simple as that.

[00:04:25] Speaker 01:
But didn't he also have caveats of things like, look, these will not be sold in stores, these will be provided, there's, you know, maybe not all the caveats he wanted, but he did provide additional context to that.

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Well, Your Honor, he did have a, he had an opening statement that was, as you probably know, was separated by

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at least three pages of verbal text between that talking about you won't find the, I think it was like you won't find these sold at Rite Aid.

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But he didn't go through all the steps that were required under the REMS or disclose the maximum dosage.

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Or frankly, he didn't disclose that the company was undergoing this risky marketing campaign that was

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going to subject them to a FDA scrutiny.

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One other thing that's risky, where are the facts on that in the record?

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The company was required to submit the marketing materials to the Office of Prescription Drug Promotion.

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They waited for a full year to do that.

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They instead simply started marketing this tongue-in-dun campaign to investors.

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Why was that risky?

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Because they were required to submit these

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these materials, so for them to have this REMS program where they have five different rounds of going back and forth and here's what you need to do to have this limited approval and you're going to be responsible for monitoring and compliance, for them to just turn right around and not tell the FDA and go about this tongue-in-dung campaign while simultaneously telling investors that they were subject to the REMS and they had to make these

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they had to comply with the REMS but then in fact they they were skirting it so that's that's where the risk comes from your honor.

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But it was clear then they never said that they didn't have to comply with their risk evaluation mitigation strategy there's nothing there that well they said no we don't have a risk evaluation mitigation strategy that we must comply with.

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No and it was actually the

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It was kind of the opposite, where they told investors they had this strategy, and they made it sound like they were complying with their labeling restrictions.

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But in fact, this tongue-in-done slogan was being marketed to tens of thousands of medical professionals at the same time.

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But it included the REMS requirement?

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The banner included a reference in smaller font to the restrictions of use.

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However, the tabletop display, you can see it in the complaint.

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It just says tongue and done.

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There's an illusion to see the booth for more.

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But the group that this was presented to was, in fact, health care providers.

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So they would know essentially what the REMS is, right?

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And they'd have to maybe look at it

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but they know what it is.

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Right.

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But the FDA, it held that this marketing campaign was not sufficient.

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So yes, it was marketed to health care providers as opposed to a consumer who looks at a box once.

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I think that was Judge Lee's analogy.

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But the fact that it was marketed to health care providers didn't

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didn't obviate them of their need to fully disclose all the risks that were part of this, quite frankly, extremely serious drug.

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And those risks would have been, what should they have done?

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What should they have disclosed, in particular, that was essentially illegal under the securities exchange law?

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Yeah, so I think that's a bit of a two-part question.

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I'll try to get to both of them quickly.

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When we're talking about just the misbranding materials, I would say that certainly the maximum dosing was not disclosed.

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Never?

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You're saying it never was disclosed?

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It wasn't disclosed in the tabletop display.

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or the banner ad.

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So this was being disseminated to medical professionals, and they weren't receiving this full information, which is why they ultimately got the warning letter.

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And then, so maximum dosing, and there was also an instruction that the FDA came down on them for not providing the full, in addition to the dosing information,

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the drug had been visually confirmed to be placed in the right spot.

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So that's for the misbranding part.

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For the Oppenheimer statements, I would say that Angati would have, he also, if he was going to parrot the tongue-in-dung language, which he didn't have to, but once he did that, he had an obligation to do so

[00:10:14] Speaker 02:
truthfully.

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So what I would say he should have done was fully identify that they were doing this simplistic marketing campaign without previously submitting it to the FDA, as had been required.

[00:10:31] Speaker 03:
Before you sit down, would you address the answer?

[00:10:34] Speaker 02:
Oh, absolutely.

[00:10:36] Speaker 03:
Would you agree first that your argument is inferential?

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I mean, that's what you say in your brief.

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Sure.

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I would say that there's a between, this was a small company, your honor, very tiny, one product.

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We have, the complaint has allegations from 12 former employees, including the one I discussed earlier who warned the CEO and chief medical officer specifically.

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Numerous CWs corroborate these allegations, and there was widespread discomfort with using the slogan, employees flipping over the display because they were embarrassed.

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The other part of this is we didn't allege that Scientor was purely on core operations doctrine, but if there's one case that would support it, it's this.

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This was a tiny drug company.

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all its revenue was from D'Souvia, for defendants to not know that their statements were misleading when made, especially that they... So again, I just want to make sure it's an inference you're arguing.

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And Tel-ABS says it has to be a compelling inference, not just plausible or reasonable.

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So how do you get there?

[00:12:01] Speaker 02:
Well, I would say it's compelling when a

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when a medical director, a regional medical director who reports to someone on the promotional review committee warns the individual defendants that they're going to get a warning letter and then also there's a significant percentage of the company not only embarrassed to use the slogan but informing

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informing us during our investigation that they were embarrassed to use the slogan.

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And the defendants held themselves out as that they would comply.

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They would have all these internal controls.

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And then they just didn't.

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And they didn't submit these marketing materials for a year after the drug was approved.

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And then, frankly, afterwards the warning letter came.

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They didn't disclose the FDA punishment for five days.

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So they covered it up on the front end.

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They covered it up on the back end.

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And they deliberately, recklessly used a misleading slogan.

[00:13:21] Speaker 02:
Thank you.

[00:13:21] Speaker 02:
Thank you.

[00:13:39] Speaker 00:
All right.

[00:13:40] Speaker 00:
Good morning, and may it please the court, Patrick Hayden on behalf of Appellees.

[00:13:46] Speaker 00:
So I know we just heard a lot of information from the other side.

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But at its core, this case is about AccelerX's attempt to predict how the FDA would view advertisements for its new drug, Dysuvia, under the agency's rules for promotional materials.

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That meant asking what the FDA would think about everything from these materials

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use of colorful graphics to the level of detail they provided about the drug.

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Now to answer these questions, the company assembled a group of in-house experts, and it's called the Promotional Review Committee, whose job it was to review these materials for FDA compliance.

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According to the complaint, this committee interacted directly with the FDA, conducted its review, and signed off on the materials.

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Now it turned out that the FDA reached a different conclusion and issued the warning letter that plaintiffs have used as the basis for this lawsuit.

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But we think plaintiff's allegations in this case just do not amount to securities fraud.

[00:14:48] Speaker 01:
So what should we do with the FDA warning letter?

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FDA believed that this could potentially mislead people.

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And by that, it would medical professionals, because this isn't being sold over the counter.

[00:15:00] Speaker 01:
So if the FDA thinks that these statements could potentially mislead a medical professional, I mean, is it fair to say that it could mislead a reasonable investor?

[00:15:13] Speaker 00:
Yeah, I appreciate the question, and I think the answer sort of goes to a point that you made, Judge Lee, earlier, which is about who is the viewer, and here we are talking about the investor, and the FDA is applying agency-specific rules that sound much more in sort of consumer protection and how it assesses branding and promotional materials.

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So there are different standards, and I think this case

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is an excellent illustration of the difference between what might be sort of the consumer protection issue on the one hand and what would be securities fraud.

[00:15:43] Speaker 01:
What's the FDA standard for issuing warning letters?

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It's not, especially if it's not over the counter, it's not a reasonable consumer standard, is it?

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So you'd want to go to 21 CFR 202.1.

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That lays out some of the standards.

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And I think what the FDA would look to are things like the layout, the typography, and the like, and the materials.

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They're looking to other information as well.

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But what you see in this case, what do they say is misleading?

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One great illustration is on the website banner.

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The problem the FDA had

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is that you had to scroll down the web page to see some more detailed information about the drug.

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Now, reasonable investors, sophisticated investors, scroll down web pages all day.

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We expect them to.

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Under the Supreme Court's decision in Omnicare, we know they have to read the fine print, the hedges, the disclaimers, and the like.

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So we apply a very different standard in asking what might mislead a reasonable investor versus sort of a consumer or here a medical provider.

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And while I don't need to expand on the point, I would just note that the Supreme Court has recognized this distinction between how the FDA assesses warning and branding and other legal regimes.

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And I would point you to Wyeth versus Levine.

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That's 555, US 555 from 2009.

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Of course, it's not in the briefs.

[00:17:03] Speaker 00:
I don't think we've all expanded on this issue.

[00:17:06] Speaker 00:
But it sort of recognizes that what the FDA might say about misbranding is not going to control in a parallel action assessing the same materials.

[00:17:14] Speaker 00:
Now, I'd like to move to Sienta, sort of where Judge Thomas was at the end of the discussion, because that was the basis for the district court's dismissal.

[00:17:23] Speaker 00:
And as we outlined in our brief plaintiffs,

[00:17:25] Speaker 00:
are attempting to plead center, really on the basis of former employees.

[00:17:30] Speaker 00:
We discussed all of them in our brief, but I think I will jump ahead to FE7, that is the regional medical director that you heard our friend speak so much about.

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And just to level set for the discussion, I think it's really helpful to look at what FE7 allegedly told Dr. Palmer and Mr. Angati about his views on these promotional campaigns.

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And just as a reminder, this is the only allegation plaintiffs have of any allegedly adverse negative information getting to the individual defendants.

[00:18:00] Speaker 00:
And what FE7 says, and I'm talking about ER83, paragraph 115, he says, this company is at risk of an FDA warning letter.

[00:18:10] Speaker 00:
That's it, a disclosure to those defendants that you're at risk.

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I think, as we explained in our brief, these defendants knew there was a risk.

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It's an ever-present risk as you go out to promote a drug.

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So he didn't tell them anything new.

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But I think if you gave FE7 every benefit of the doubt, what FE7 might have meant to convey is,

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Look, this risk is more serious.

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This is more acute.

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And I think if you sort of go there with FE7, you are squarely within the realm of the kind of internal disagreement or debate on a question of degree.

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Just how likely is the FDA to issue a warning letter?

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And this complaint tells us the information these individual defendants are getting.

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They have that promotional review committee it lays out in the complaint.

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It has the top two lawyers at the company.

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the top three medical professionals, they're communicating with the FDA, and they advise these executives that these materials do comply.

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So I think when we look at FE7, maybe implying that the risk is more acute, and then sort of the other information these executives are getting, I don't think you're going to get to that strong inference of CNTER.

[00:19:16] Speaker 00:
And the second sort of related point about FE7, which we see the district court recognize, is that I don't think you can walk away with any inference from this complaint that either Mr. Angati or Dr. Palmer agreed with any more serious concerns that FE7 may have meant to convey.

[00:19:32] Speaker 00:
This complaint tells us how they react.

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They say this is a marketing decision, and that made a lot of sense as a practical matter.

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And although FE7 had just joined this company, he works at our regional office in medical affairs, but not related to regulatory issues or marketing or promotional materials and the like.

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And although FE7 might not have known it, those professionals are actively working on this regulatory question.

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they're weighing in and at the same time this complaint shows us every single marketing professional at this company, they're all former employees, it's FE1 and FE4.

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FE3 is also working with the company, no concerns, no negative information passed along to any individual defendant.

[00:20:12] Speaker 00:
So I think the district court was right there to sort of recognize that despite what FE7 said, we sort of can't draw the inference that these executives walked away believing anything they said was misleading.

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And the last thing I'll say about FE7 before moving on is there's, of course, a timing problem.

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You see that discussed in our brief.

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And we believe it is well supported in Ninth Circuit precedent, but it is not dispositive here.

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And I think one way to look at it is just sort of it confirms the weakness of the FE7 allegations.

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And that would be the way this court looked at the issue.

[00:20:42] Speaker 00:
in Webb and, you know, footnote one of that decision and Judge Lee's decision in Proto Nova is sort of another way to sort of look at that sort of timing issues with former employee allegations.

[00:20:53] Speaker 01:
Can you address your friend on the other side's argument about the core operation theory?

[00:20:59] Speaker 01:
He says it might apply with more force when it involves a smaller company.

[00:21:04] Speaker 01:
And, you know, Talfera isn't Pfizer or GSK with thousands of employees here.

[00:21:08] Speaker 01:
Maybe you can infer a little bit more when you have such a small, you know, company, tight-knit company.

[00:21:12] Speaker 00:
Right.

[00:21:13] Speaker 00:
So I want to be clear.

[00:21:14] Speaker 00:
I think there are actually sort of two different concepts.

[00:21:16] Speaker 00:
One, which you talk about is, which our friend talks about sort of the size of the company.

[00:21:20] Speaker 00:
That is not necessarily, that's not core operations necessarily.

[00:21:23] Speaker 00:
It's just another way of maybe thinking about, you know, about other potential inferences of CNTER.

[00:21:27] Speaker 00:
And I think this court has really rejected the idea that being a small company, you know, involving a key product, that that's enough to raise the strong inference of CNTER.

[00:21:35] Speaker 00:
I believe we addressed this in our brief, but key cases might be the first Nvidia decision, that's in 2014.

[00:21:42] Speaker 00:
That's where this court considered a claim that it was the company's flagship product.

[00:21:46] Speaker 00:
And this court was clear, that's not enough.

[00:21:48] Speaker 00:
I think we also talk about Metzler, the claim it's a small company, everybody talks.

[00:21:53] Speaker 00:
You hear a lot of securities cases involving small companies.

[00:21:56] Speaker 00:
The size of the company, again, is not gonna be enough to get U2C enter.

[00:22:00] Speaker 01:
But does it make it easier, do you think, at least?

[00:22:03] Speaker 01:
I mean, the size itself isn't dispositive, but at least does it make it easier to show that?

[00:22:10] Speaker 00:
I'm reluctant to say it would make it easier, Judge Lee.

[00:22:12] Speaker 00:
I think it's certainly a different fact pattern.

[00:22:14] Speaker 00:
I think in all of these cases, regardless of the company size, you often sort of look to the information that that executive gets and whether it would conflict with sort of the information they receive.

[00:22:25] Speaker 00:
And some of your cases, which I'm happy to discuss, that would include cases at our friend's site, like Forescout Technologies, Quality Systems, and the like.

[00:22:32] Speaker 00:
Those are big companies, but they have sort of that robust information system that is getting the data to the executives every minute.

[00:22:39] Speaker 00:
They're meticulously reviewing it constantly.

[00:22:42] Speaker 00:
So I think that despite the size there, you can sort of understand how the information would get to a defendant who might say something different to the market.

[00:22:51] Speaker 00:
I do want to get back to your question about cooperations, because we heard our friend raise it.

[00:22:55] Speaker 00:
As we think we explained in our brief, it's a very difficult standard to meet.

[00:22:59] Speaker 00:
And the two requirements are, of course, that we look for usually representations of actual access to data.

[00:23:06] Speaker 00:
So for example, in the Reese versus Malone, you have an executive.

[00:23:10] Speaker 00:
This involves the BP oil spill.

[00:23:13] Speaker 00:
And an executive who's a chief engineer says, I see all of the data.

[00:23:17] Speaker 00:
I have all the numbers on how this pipe is corroding and the like.

[00:23:21] Speaker 00:
That's how you could get to those representations.

[00:23:24] Speaker 00:
Nothing of the sort here.

[00:23:25] Speaker 00:
I think the closest our friends say is, Dr. Palmer says, we review these materials carefully.

[00:23:33] Speaker 00:
We see that sort of representation from companies every day.

[00:23:35] Speaker 00:
And it was, of course, true.

[00:23:36] Speaker 00:
This company was looking at these materials.

[00:23:39] Speaker 00:
So I don't think that will get them there in terms of representations about access.

[00:23:43] Speaker 00:
And then the other, and often the focus is really on the absurdity prong.

[00:23:47] Speaker 00:
I don't think that theory works here, that it would be absurd for people not to know that this was a misbranding.

[00:23:53] Speaker 00:
In fact, we see a difference of opinion here.

[00:23:56] Speaker 00:
Even within this company, we look to the allegations.

[00:23:59] Speaker 00:
Again, I would commend you to look to all of the allegations of the marketing professionals.

[00:24:03] Speaker 00:
They did identify some of the relevant people.

[00:24:06] Speaker 00:
Again, it's FE1, FE4, and FE3.

[00:24:09] Speaker 00:
Those are the folks in the position to know.

[00:24:11] Speaker 00:
And you won't hear them say anything negative about these materials.

[00:24:14] Speaker 00:
So I think when you look at this complaint holistically, you just don't sort of have that absurdity element satisfied either.

[00:24:22] Speaker 00:
Now I do.

[00:24:22] Speaker 00:
I'm happy to move to falsity as well, but I would also like to quickly address a couple of the points that we heard our friends on the other side mention.

[00:24:31] Speaker 00:
The first is the REMS.

[00:24:32] Speaker 00:
I think the REMS is a bit of a distraction in a way, and I want to explain what the REMS is actually about, because it does not govern in the case of D'Souvia.

[00:24:41] Speaker 00:
marketing or promotional materials.

[00:24:43] Speaker 00:
I think as you read it, it's at SCR 15 to 26.

[00:24:46] Speaker 00:
It is about distribution, both to medical facilities that are going to be sort of dispensing this drug, and to wholesalers who are going to sell it on to others.

[00:24:54] Speaker 00:
And it imposes a number of procedural requirements on those third parties.

[00:24:57] Speaker 00:
So for example, if you're a wholesaler, you have to maintain and submit records.

[00:25:02] Speaker 00:
You kind of have to do audits on how you're shipping the drug.

[00:25:05] Speaker 00:
If you're a medical facility, you have to establish a training program and the like.

[00:25:09] Speaker 00:
certify certain staff members.

[00:25:11] Speaker 00:
So that is what this REMS is about.

[00:25:14] Speaker 00:
And then procedurally in this case, and I think we note this in our brief, the District Court found that plaintiffs had not alleged any noncompliance with the REMS.

[00:25:23] Speaker 00:
I think you see that at ER 24, and we noted in a footnote of our brief, I don't see any challenge to that.

[00:25:28] Speaker 00:
So I think for purposes of this case, we take it that compliance with the REMS is essentially undisputed.

[00:25:37] Speaker 00:
And then I also just wanted to return to Mr. Angati's statement at the Oppenheimer Conference, just because, you know, as I'm sure you noted, Mr. Angati, you know, did not use the tongue-in-dun slogan at that conference.

[00:25:49] Speaker 00:
He's speaking to investors, but you won't hear the slogan and you don't see him, you know, use any of those promotional materials, I think.

[00:25:55] Speaker 00:
You know, plaintiffs have done that quotation mining, you see tongue, and you see you're done, and you certainly see him at a high level describing his company and describing how this drug works.

[00:26:05] Speaker 00:
I think that sort of explains why he says it's, you know, it's basically as simple as that.

[00:26:10] Speaker 00:
But I don't think at an investor conference that any CEO would stand up and read a black box warning or instructions for use word for word.

[00:26:18] Speaker 00:
I don't think any investor or analyst would expect to hear it.

[00:26:21] Speaker 00:
So we think that in context that statement is both different from

[00:26:24] Speaker 00:
the promotional materials that the FDA looked at and not alleged to be false or misleading in context.

[00:26:34] Speaker 00:
And if you'd like to hear sort of about falsity, I think that one sort of theme that we present as to the promotional materials themselves is of course that we are, as Judge Lee noted, sort of looking at it from an investor standpoint.

[00:26:48] Speaker 00:
We're putting our investor hat on.

[00:26:50] Speaker 00:
This is much more sort of a promotional slogan for consumers, tongue and

[00:26:54] Speaker 00:
We haven't identified any precedent from this court saying that an advertisement, and certainly not one anywhere close to this sort of high-level communication to consumers is actionable as securities fraud.

[00:27:06] Speaker 00:
We discussed LifeLock.

[00:27:07] Speaker 00:
I think that's the closest we found.

[00:27:09] Speaker 00:
I know it is unpublished, but it's what we see with the software advertisements that describe it as the company is taking fast action and the like.

[00:27:16] Speaker 00:
And I think the panel there was very quick and decisive in saying that it's not prohibited the securities fraud.

[00:27:21] Speaker 00:
We think that same reasoning controls here.

[00:27:23] Speaker 00:
You could also look at the issue as one of puffery.

[00:27:26] Speaker 00:
They're somewhat related.

[00:27:27] Speaker 00:
Puffery is the label that we would apply in the securities law context.

[00:27:31] Speaker 00:
And then finally, if you do choose to sort of go there and tack on this advertisement slogan as something that could be cognizable as securities fraud, we don't think it would be misleading in context.

[00:27:41] Speaker 00:
We do see, both with the tablecloth, the tabletop drape, and the website banner, additional detail is available.

[00:27:47] Speaker 00:
So if we imagine the hypothetical investor goes to the medical conference

[00:27:51] Speaker 00:
says, oh, I want to learn more about that.

[00:27:53] Speaker 00:
That company seems interesting.

[00:27:56] Speaker 00:
We will note at ER 88 that you will see that website banner.

[00:27:59] Speaker 00:
Again, you've kind of had to scroll down.

[00:28:00] Speaker 00:
And then if you see the tablecloth, it says, quote,

[00:28:03] Speaker 00:
please see indication, important safety information, including limitations on use and boxed warning at this booth.

[00:28:10] Speaker 00:
So the information was there.

[00:28:11] Speaker 00:
We expect investors to do that, their homework.

[00:28:14] Speaker 00:
And as I see I'm running out of time, I would just note that page 12 of our brief does identify the additional places where we consistently disclose to investors

[00:28:22] Speaker 00:
all of the details on how to use this drug and sort of the limitations that we faced.

[00:28:28] Speaker 00:
So with that, we think the district court was right to grant this motion to dismiss after giving plaintiffs four opportunities to state a claim, and we would urge you to affirm.

[00:28:37] Speaker 01:
Thank you.

[00:28:53] Speaker 02:
Thank you, Your Honors.

[00:28:54] Speaker 02:
I'll do my best.

[00:28:54] Speaker 02:
I've got a minute and fifty.

[00:28:57] Speaker 02:
So, defendant Appellee mentioned that this was not an investor-facing document.

[00:29:08] Speaker 02:
I would just, and he alluded to the LifeLock case,

[00:29:13] Speaker 02:
I would just point the court to the Carter-Wallace decision that held that statements to sophisticated medical investors, medical professionals are actionable under the securities laws.

[00:29:25] Speaker 02:
And I would note that basically Levinson holds that the in-connection requirement is to be construed broadly.

[00:29:32] Speaker 02:
As to whether or not there were these other possible disclosures, if you went and looked something up,

[00:29:42] Speaker 02:
or if you clicked down and looked at some smaller font, I would just point out that the law is well settled, that the adequacy of disclosure goes to the trier of fact, and it's not an issue to be decided as a matter of law unless reasonable binds can't differ.

[00:29:57] Speaker 02:
That's the price-of-effect case.

[00:30:00] Speaker 02:
One other thing I want to discuss is that

[00:30:06] Speaker 02:
Mr. Hayden made some allusions to FE7's concerns being rejected.

[00:30:13] Speaker 02:
That, respectfully, that's not entirely accurate.

[00:30:16] Speaker 02:
The FE7 first brought his concerns to Gail Rosen-Spahn, who sits on the promotional review committee.

[00:30:24] Speaker 02:
And then he spoke with Ms.

[00:30:28] Speaker 02:
Palmer, Dr. Palmer, who also said she appreciated his concerns.

[00:30:33] Speaker 02:
And then when it was brought to Engadi and Palmer simultaneously, they didn't disagree.

[00:30:40] Speaker 02:
They simply said that it was a marketing issue.

[00:30:44] Speaker 02:
I would point to the case that just came out this week.

[00:30:47] Speaker 02:
I think it was Tuesday.

[00:30:50] Speaker 02:
The Cardone case that noted that where a company is warned and they don't contest

[00:31:00] Speaker 02:
They don't contest the findings.

[00:31:02] Speaker 02:
It can be indicative of subjective falsity.

[00:31:05] Speaker 02:
I think I'm out of time, but unless the court has anything, I appreciate the opportunity to have oral argument.

[00:31:10] Speaker 01:
Great.

[00:31:11] Speaker 01:
Thank you.

[00:31:11] Speaker 01:
Thank you both for the helpful argument.

[00:31:13] Speaker 01:
The case has been submitted, and we are at recess.