Pomerantz Defeats Allergan plc Motion to Dismiss in SDNY
Pomerantz is pleased to announce that Judge McMahon of the United States District Court for the Southern District of New York has denied (in part) the defendants’ motion to dismiss in the securities litigation action against Allergan plc.
Pomerantz is lead counsel to the Boston Retirement System in this action.
The case arises from various representations by Allergan about the safety profile of its textured breast implants and the possible link between those implants to a rare form of lymphoma, ALCL. Over the years, various studies have shown a possible link between ALCL and users of textured breast implants. Notably, some of these studies discovered a higher incidence of ALCL in users of implants specifically manufactured by Allergan.
In November 2018, French regulator ANSM, which had been studying the issue for some time, pushed Allergan to recall its products from their markets. Several regulators in Canada and elsewhere followed suit with their own recall requests, including eventually the FDA, following Pomerantz’s filing of an amended complaint. News reports and some regulators cited the possible link to ALCL as the basis for the recalls.
During the class period, Allergan had only publicly acknowledged a “possible” link between ALCL and textured implants generally, while omitting known facts about the higher incidence of ALCL in users of Allergan-specific implants. Moreover, while acknowledging this “possible” link in its risk disclosures, Allergan attempted to deflect attention from its own products by stating that it was aware of “negative reports from regulatory authorities in Europe related to a breast implant manufacturer that is not affiliated with Allergan.” While the Company admitted this, Allergan failed to mention that it, too, was under scrutiny from European regulators.
Pomerantz worked tirelessly to put forth a claim to the court which sufficiently and fully substantiated a securities fraud claim, and the above allegations proved successful.
The decision is particularly noteworthy because the pivotal evidence of the scienter was not in Allergan’s facts disclosed to the public, but rather in its selective omission of facts in statements to the public and to investors. While the court upheld that all statements by the Company were true, it deemed that the statements were “misleadingly incomplete,” omitting facts needed for investors to fully understand the risk posed by Allergan’s implants.