benefit of discovery and how the court has to balance that policy versus not dismissing viable claims and i can see that's not an easy job we think here the district court got it wrong we think we pleaded viable claims and then purchased by arrowhead and been to that delivery system had been developed for a number of years and the issue with that delivery system although showing promise was that it resulted in high toxicity and had to be discussed by the company and by other analysts and experts only fact that you have supporting they have personal knowledge over their respective allegations in your complaint is their position is that enough of the p s hillary well i think it's i think it's has all that under information i was on that wasn't my point is simply this you can have in a company you can have hierarchy and you have somebody at the top maybe highly qualified but what you're alleging occurred farther down and  it seems like you're making an assumption that because so many of the top of the organizational chart they must have known what somebody farther down in the system knew and i'm asking you credible to say that the c e o for instance or senior management did not know about say the outcome of a key clinical trial or the safety profile of its key drug candidate that's been developing for five years which the entire future of the company depends upon and which they then make public statements about its safety so when you have that profile i think it's very reasonable i think i think it's an unreasoned inference to say but they were unaware of the outcome of the tickler studies for instance i don't have it out so if you want to question well in a in a way we are in this case we have to get to what they said but i wanted to see st whether you felt that just by virtue of their position it was enough because i find the allegations very tenuous in terms of how they get tied into it other than their position so i'll try and break it down because i i would agree with you on it i think all the legal conclusions kind of follow from these key a couple of key factual questions and once again i would stress knowledge i think that also you are talk about ethical doses or just you just say that it has can result in unsafe toxicity mean that could be because you give way too much on one occasion as opposed to the problem that you raise in your complaint which is multiple doses or it's really a combination of the two which is that there's clearly a level which is the d p c technology creates toxicity and that could be from one very large  grams otherwise they would likely have a concern that something might happen and therefore want you to go slowly in testing it and that doesn't mean it will happen i'm not sure how the fact that the f d a wanted to sort of slow down and do that one milligram or whatever it was the one level testing st shows that the f d a knew there would be a problem with the testing that would then happen is not a theory no one is alleging that everyone knew in january two thousand and fifteen that ultimately this toxicity would result and the whole study would fail because i would i would agree and i agree with the for certainly cause a really that's like makes no sense no one no company would do a study that they knew would fail and just waste millions of dollars what is the risk here and it's the same with this court identified as material and misleading a reno is that is the risk do the investors and investors understand investing in pharmaceutical companies is a risky business of course we understand and i think you started by saying even before the class period everyone knew that this technology had a risk of toxicity correct your honor so the investors know that so what is the thing that was specific fact that they didn't know they did not know that in the course of the development that this level of toxicity was still as severe a risk as your position i kind of i'm sensing that if you have a company dealing with the f d a experimental drug that in order to comply with the securities law you must basically almost have a is that really where our securities law is today that you've got to report every single thing from the lab when indeed everybody knows it's an experiment everybody knows it's a risk how far do we take this agreed your honor and  knew about the primate death so once again i think the reason why inference based upon the importance of the of this the size of the company the importance of this drug and its studies the fact that they were talking about primate studies clinical studies up when an executive says we have looked at the studies and it shows no evidence of toxicity i think it's reasonable show that to take that at their word and then tighten the pleading stage it's no excuse then to say one of fact when i said i'd looked at the hasn't carried his statutory burden to fill it with particularized factual and allegations as required under the private securities litigation reform act and numerous cases from the circuit i want to focus on three main statements about their research project progress and want to suggest that counsel added a number of words to the statements in the record there's a i think it's important to focus on the actual statements which again it will be twenty nine and there's a concession as to weren't there two statements that the district court found would have been materially false based upon which date you accepted for the primates dying and isn't that at least an issue of fact as to what  the source of the allegation actually has personal knowledge and that flows directly from the statutory requirement under the p s l right so just as the plaintiff can't or are you saying the declarant who talked about the prime it death didn't actually know about the prime it  that is correct and not supported by particularized factual allegations for a number of reasons so that the very you are also saying that the person who made the statements they point to didn't know whatever he the clear it knew or be arguing both that is correct and not see it so he's involved with chemistry that's sort of the building of the product that's not the testing that's not the animal toxicology that's that's not anything else other than the building of of the products just on just t require the name confidential informant who we know who it is to be able to say that another person was there heard that the primates had died and they're the ones that made the misrepresentation is that what you're saying if i understand the i'm not sure i understand the question are you not what i'm liking is how close the cause will cain has to be in the allegations of the complaint we know there can't just be conclusory statements right as judges and just indicated you got an allegation in the nd amended complaint that says you got certain people had certain titles i understand your position to be that the people who made the public statement they're the other people knew because they were told or there were these documents they were given or something that ties them into their right but that is exactly right your honor and i want to speak to that i do want to say that that is only one component of that so that sort of don't get off the ground with an informant  but what your point about what you know information did you know the speakers have there is zero allegation about any of the more privacies the three core facts that are alleged in the complaint ever being relayed through any conversation report data that the sort of three core allegations are you know i don't i think exactly what conjecture looks like it's exactly what freud by hindsight looks like so invented but there's also no support for the for the proposition that they were ever conveyed to the speakers and that's that really goes to but are both falsity and center on the speakers assuming that they have some knowledge of what's going on when they make statements suggesting that they have the knowledge for instance they're saying like and so all of these animals died that's why it's so i want to speak because that goes to the content of the the statement which i agree is absolutely a starting point so the statements in the record concern very specific studies and  you know the ones that are at the core of you know how do you assess whether this drug is going to be safe and effective at the thing therapeutic way so that so does the statements in the study are about the human clinical studies that's i think  out clinical in this context always means human patients patients always means human so the statements in the record are about one thing that the human clinical studies the nd thing chimpanzees studies which are done at the human therapeutic range so so they're not sort of about that and this is a key distinction between our case in the arena case that plaintiffs have cited so often these are not statement saying all studies support f d a approval that was where the company in arena got in trouble because they were saying all of our studies the animal studies support f d a approval when the planes were able to plead with particularly that the f d a had actually said well we have a concern because of the rat study right so those are the particularized factual allegations and that in a in district judge found here that at least two of your statements would have been material based upon the timing of the death have the primates do you agree with the district court on that on that statement that they would have been material not not on that point or are we don't so that so i think you're i was referring to the july statement a as a corrective disclosure those are separate studies i think a reasonable investor would well understand that those are separate studies than studies of the human therapeutic dose and studies in chimpanzees at the human therapeutic dose tha toxicology studies are are different matters to sort of the only way that it we know that on this record what in the record this is and i should guess what in the record talks about the fact that these were different animals the different terminology that the speakers used so  the speakers were specific when they were so when they were speaking about chimpanzees studies they used the word seem pansy when they were speaking about other primates they use the word primate studies we've also studied it we've also cited  purpose and there's disclosures about this as well they all talk psychology studies really are designed to understand the mechanisms of toxicity so there's disclosures in the record saying why after some previous animal toxicology so used to refer to his g toxicology studies that the company is telling investors well as a result of those we know what organs to look for when we start doing things that at the human testing range will know what what organs took to look for and focus  see whether they're in fact is toxicity so so those those are a few examples in the record of reflecting that the animal toxicology studies really are fundamentally different than the doses that the human range i want to suggest though you know if that weren't true even if that wasn't  in the record that would be plaintiff's burden to plead with particularities that the same animals were at issue that there was something about the high dose animal toxicology tests that fundamentally undermined the conceivably truthful and promising results that arrowhead was showing at the doses near the human therapeutic range which really those those topics the topic of the doses at the human therapeutic range that is the topic of each and every one of the statements that are allegedly misleading but yeah yeah i thought it was significant enough once they learned about the while they called they called for a pause that is true an arrowhead immediately disclosed that the very day that heard from the f d a and i want to suggest that's another you know critical point that distinguishes you know plaintiff's cases about the drug studies is that there you had you had don't believe it reflects a problem with the science at the human therapeutic range we shown excellent excellent results at the human therapeutic range in terms of safety in terms of efficacy these animal toxicology studies there are higher doses than used in the clinic which  busy the disclosures on november th and on november th and so what you have here is just it's a record of transparency you have a series of risk disclosures that i think her counsel say i mean investors knew that what was being studied here is you know the question is is there toxicity you know associated with this product and the statements of issue are are conceitedly true for reports of what the studies were showing that were being commented upon so when when there's a reference to you know a statement supposedly saying there are no dosed limiting toxicities with with a drug that's that's not what the company said what the company said was well we've conducted these trials and  toxicities were observed in those trials that is a concededly true statement and i think to judge ammons point there just is is no particularized fact in the record they even get plaintiffs off the ground of showing something falsifying the embellishment on the on the higgs informant allegations which are really just you know he just says well the peptide made made the drug unsafe that is an extraordinarily veg allegation that even if it accurately reflect reflects the statements let alone known to the defendant so we think they fell on falsity right out of the get go even if somehow they get past falsity by sort of i'm not sure what embellishing the statements are or something there's there's just you know called called for a short hold and a change of the study methodology because of this suppose a dose accumulation concern the easiest way to dispose of that as the point of stone even claimed in  a ever said anything to arrowhead about that so this sort of try to get inside the heads of the regulators but haven't even pleaded because because they can that you know concerned even if it was true without ever communicate the company or to generalize it one can what you're saying the statements that are made that your opponent declares or falls when you look at them specifically they revert to particular animal study primates not a human study and that they're extrapolating what is said about one particular study and kind of posing it over the entire process that's right there they're imposing  unsupported by any particular facts about the high dose animal toxicology deaths again higher than clinical doses and imposing their their views about what that should imply about an entirely different matter that was the subject of the statements sufficiently misleading because it led to this particular delay and there was a stock price to climb in this risk that works through game parent so here we would argue that it's far stronger ok thank you very much to both counsel we appreciate this is an interesting and very challenging case we're now here arguing in the final case of the day united states versus lark