RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 18a0220p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

KEVIN L. DOUGHERTY,

Plaintiff,

RONALD E. WALLACE and WALTER J. MINETT, 

individually and on behalf of all others similarly 

situated, 

Movants-Appellants,

v.

ESPERION THERAPEUTICS, INC.; TIM M. MAYLEBEN,

Defendants-Appellees.

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No. 17-1701

Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 2:16-cv-10089—Arthur J. Tarnow, District Judge.

Argued: March 15, 2018

Decided and Filed: September 27, 2018

Before: SILER, BATCHELDER, and DONALD, Circuit Judges.

_________________

COUNSEL

ARGUED: Steven F. Hubachek, ROBBINS GELLER RUDMAN & DOWD LLP, San Diego, 

California, for Appellants. Deborah S. Birnbach, GOODWIN PROCTER LLP, Boston, 

Massachusetts, for Appellees. ON BRIEF: Steven F. Hubachek, ROBBINS GELLER 

RUDMAN & DOWD LLP, San Diego, California, for Appellants. Deborah S. Birnbach, Kevin 

P. Martin, Adam Slutsky, Joshua J. Bone, GOODWIN PROCTER LLP, Boston, Massachusetts, 

for Appellees.

>
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 2

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OPINION

_________________

SILER, Circuit Judge. Plaintiffs in securities-fraud suits are subject to a more onerous 

pleading burden than the average plaintiff. They must plead, among other things, a “strong 

inference of scienter” that is “cogent and at least as compelling as any opposing inference of 

nonfraudulent intent.” Doshi v. Gen. Cable Corp., 823 F.3d 1032, 1039 (6th Cir. 2016) (quoting 

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 314 (2007)). In this case, the district 

court held that Plaintiffs, certain stockholders of Esperion Therapeutics, failed to adequately 

plead a strong inference that Esperion CEO Tim Mayleben willfully or recklessly made 

misleading statements to investors following a meeting with the FDA regarding the company’s 

new cholesterol drug. Because Plaintiffs adequately alleged scienter, we REVERSE and 

REMAND.

I.

Esperion is a pharmaceutical company that was formed in 2008. Since its incorporation, 

Esperion has neither sold any products nor generated any revenue, relying instead upon investor 

funding. Esperion’s sole focus is the development of ETC-1002, a first-in-class oral medication 

designed to lower LDL-cholesterol, also known as “bad cholesterol.” Elevated LDL-cholesterol 

is a significant risk factor in cardiovascular disease and contributes to plaque deposits in arteries, 

which in turn cause heart attacks, strokes, and other medical issues. According to the Centers for 

Disease Control, approximately seventy-one million adults in the United States have elevated 

LDL-cholesterol levels.

The current standard of care for patients with high cholesterol is a family of drugs called 

statins. However, the use of statins is accompanied by a number of possible side effects—

muscle pain or weakness, memory loss, and increased glucose levels, to name a few. Esperion 

estimates that between two and seven million American adults are statin-intolerant due to these 

side effects.
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 3

Compared to statins, ETC-1002 acts at an earlier point in the body’s synthesis of 

cholesterol and avoids the muscle pain and weakness that statins produce in some patients. 

Esperion hopes to market ETC-1002 as an alternative treatment for statin-intolerant patients. 

Additionally, ETC-1002 could be used as an add-on therapy for patients who suffer from 

heterozygous familial hypercholesterolemia (HeFH) and clinical atherosclerotic cardiovascular 

disease (ASCVD). Patients with those conditions are often unable to reach their recommended 

LDL-cholesterol levels using statins alone, so the addition of ETC-1002 to their course of 

treatment might help those patients reach their cholesterol-level goals.

To that end, Esperion sought FDA approval for ETC-1002. Any new drug must be put 

through a series of clinical trials before it can be marketed and sold in the United States. 

Following initial testing on animals, pharmaceutical companies must seek permission from the 

FDA to test the new drug on humans. N.J. Carpenters Pension & Annuity Funds v. Biogen 

IDEC Inc., 537 F.3d 35, 39 (1st Cir. 2008) (citations omitted). If approved by the FDA, human 

clinical trials proceed in three phases:

Phase I studies generally involve twenty to eighty subjects, and are designed to 

determine how the drug works in humans and the side effects associated with 

increasing doses. [21 C.F.R.] § 312.21(a)(1). Phase II studies usually involve no 

more than several hundred subjects, and are designed to evaluate the effectiveness 

of the drug, as well as common short-term side effects and risks. Id. § 312.21(b). 

Phase III studies are large-scale trials, usually involving several hundred to 

several thousand subjects, and are intended to gather the information necessary to 

provide an adequate basis for labeling the drug. Id. § 312.21(c). . . . After Phase 

III, the FDA considers the results of all of the clinical trials in determining 

whether to approve a drug for market. See id. §§ 314.125(b), 314.126(a).

Id.

By August 2015, Esperion had completed three Phase 1 studies and seven Phase 2 

studies. In each trial, Esperion reported that ETC-1002 was well-tolerated in the study 

population and demonstrated significant average LDL-cholesterol reductions. That month, 

Esperion executives met with FDA officials for an “End-of-Phase 2 Meeting” to elicit feedback 

and advice regarding the path forward with Phase 3 of the approval process.
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 4

Following the meeting, Esperion published a press release on August 17, 2015, that 

contains two statements worth noting. First, the company stated that “[t]he FDA confirmed that 

LDL-C remains an acceptable clinical surrogate endpoint for the approval of an LDL-C lowering 

therapy such as ETC-1002 in patient populations who have a high unmet medical need, including 

patients with [HeFH] . . . or [ASCVD].” Second, the company said that, “[b]ased upon feedback 

from the FDA, approval of ETC-1002 in the HeFH and ASCVD patient populations will not 

require the completion of a cardiovascular outcomes trial.”

These statements require some explanation to be fully understood in context. 

A cardiovascular outcomes trial (CVOT) is a costly, lengthy study that measures a drug’s 

effectiveness in reducing cardiovascular risk over several years. Because lower LDL-cholesterol 

is presumed to improve overall heart health, the FDA does not typically require companies 

seeking approval of a new cholesterol-lowering drug to complete a CVOT and prove that the 

drug actually reduces cardiovascular risk. Instead, the FDA treats LDL-cholesterol as a 

“surrogate endpoint,” or proxy, for cardiovascular risk. In other words, if a new drug is shown to 

lower LDL-cholesterol, the FDA assumes that it also improves overall cardiovascular health. By 

saying that the FDA would continue to use LDL-cholesterol as a proxy for cardiovascular risk, 

and that the FDA would not require a completed CVOT prior to approving ETC-1002, Esperion 

was essentially telling its investors that ETC-1002 had a clear path to regulatory approval.

In a follow-up conference call with market analysts, CEO Tim Mayleben stated that 

Esperion issued the release “because we felt that some of the information we learned last week at 

our End-of-Phase II meeting about the regulatory path forward for [ETC-]1002 was important 

for you to know sooner rather than later, even though we don’t yet have meeting minutes back 

from the FDA.” Regarding the possibility of a CVOT, Mayleben said that “[w]e know that 

[ETC-]1002 will not require a CV outcomes trial to be completed prior to approval in patients 

with heterozygous FH and ASCVD, those patient populations that the FDA considers to have an 

appropriate benefit/risk ratio.” Thus, Mayleben confirmed what Esperion had stated in its earlier 

press release—the company believed the FDA would not require a completed CVOT prior to 

approval of ETC-1002 for use in patients whose high cholesterol could not be managed using 

statins alone. However, Mayleben indicated that the company still intended to conduct a CVOT 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 5

at some point, in hopes that the FDA would later approve ETC-1002 for broader use in patients 

seeking an overall reduction in the risk of cardiovascular disease.

During his conference call, Mayleben stressed the importance of receiving the FDA’s 

final minutes from the meeting. He declined to fully answer several questions asked by 

participants in the conference call, saying that answers would have to wait until Esperion 

received the final minutes. And when Mayleben was asked how the FDA’s minutes might differ 

from Esperion’s notes from the meeting, he said that “we can’t comment until we receive the 

final minutes from the FDA next month because . . . we have [zero] interest in front running the 

FDA on this. The FDA’s minutes are the only minutes that matter, and so we’re going to wait 

for those minutes.”

Esperion’s press release also included cautionary language, warning investors that the 

release “contains forward-looking statements that are made pursuant to the safe harbor 

provisions of the federal securities laws,” and suggesting that “Esperion may need to change the 

design of its Phase 3 program once final minutes from the FDA meeting are received.”

Market reaction was mostly positive following the press release and conference call. 

Some analysts were disappointed that the proposed study population for Esperion’s Phase 3 trials 

was narrower than anticipated. However, most analysts focused on the fact that, according to 

Esperion, the FDA was not planning to require a completed CVOT as a prerequisite to approval 

for ETC-1002’s use in the high-unmet-need patient population.

Following its receipt of the final FDA minutes, Esperion published another press release 

on September 28, 2015. Contrary to its August statements, Esperion said that the “FDA has 

encouraged the Company to initiate a cardiovascular outcomes trial promptly, which would be 

well underway at the time of the New Drug Application submission and review, since any 

concern regarding the benefit/risk assessment of ETC-1002 could necessitate a completed 

cardiovascular outcomes trial before approval.” In a subsequent conference call, Mayleben 

acknowledged that this language was “slightly different” than the language used in the 

company’s August statements. Mayleben explained that this difference “reflects . . . as I was 

highlighting earlier about LDL as an accepted surrogate [and] whether it will continue to be an 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 6

accepted surrogate. I think it highlights the dynamic nature of this therapeutic area.” Market 

analysts seized on this change in position, and Esperion’s stock dropped 48% the next day, from 

$35.09 per share to $18.33 per share.

Plaintiffs, the purchasers of Esperion common stock between August 18 and September 

28, brought this class action against Esperion and Mayleben for violating §§ 10(b) and 20(a) of 

the Securities Exchange Act of 1934, as well as SEC Rule 10b-5. Their amended complaint 

alleges that Esperion misled investors by falsely stating that the FDA would not require a 

completed CVOT prior to approval of ETC-1002, causing Esperion stock to trade at artificially 

inflated levels during the class period. When the FDA’s final meeting minutes forced the 

company to reveal that the FDA might indeed require a completed CVOT before approving the 

drug, Plaintiffs say, Esperion stock plummeted.

Following a hearing, the district court granted Esperion’s motion to dismiss. Relying on 

our holding in Kuyat v. BioMimetic Therapeutics, Inc., 747 F.3d 435, 440 (6th Cir. 2014), the 

district court found that Plaintiffs failed to adequately plead a strong inference of scienter 

because they failed to “identif[y] facts demonstrating that Esperion actually understood the 

FDA’s communications in a way that was different than what was publicly disclosed.” The court 

further held that Esperion’s statements were not reckless because they were based upon the 

company’s knowledge that the FDA had never before required a company to complete a CVOT 

prior to approval of a drug similar to ETC-1002. Last, the district court held that Esperion’s 

statements fell within the Private Securities Litigation Reform Act’s (PSLRA) safe harbor 

provision because they served as the basis for later forward-looking statements by the company. 

This appeal followed.1

II.

We “review the grant of a motion to dismiss under Rule 12(b)(6) de novo, construing the 

record in the light most favorable to the non-moving party and accepting as true all well-pleaded 

 

1After the district court granted Esperion’s motion to dismiss, Plaintiffs moved to alter or amend the 

judgment and requested leave to file a second amended complaint, which the district court denied. Because we hold 

that the district court erred by dismissing Plaintiffs’ first amended complaint, we need not address the district court’s 

denial of their post-judgment motion.
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 7

allegations in the complaint.” Republic Bank & Tr. Co. v. Bear Stearns & Co., Inc., 683 F.3d 

239, 246 (6th Cir. 2012) (citations omitted). “To survive a motion to dismiss, a complaint must 

contain sufficient factual matter, accepted as true, to . . . allow[] the court to draw the reasonable 

inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 

662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

Plaintiffs’ securities-fraud claims also implicate the heightened pleading standards of 

Federal Rule of Civil Procedure 9(b). Ind. State Dist. Council of Laborers & Hod Carriers 

Pension & Welfare Fund v. Omnicare, Inc. (Omnicare I), 583 F.3d 935, 942 (6th Cir. 2009). 

Accordingly, their complaint must “(1) specify the statements that the plaintiff contends were 

fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and 

(4) explain why the statements were fraudulent.” Id. at 942-43 (citations and internal quotation 

marks omitted).

As a final threshold matter, the PSLRA imposes two additional pleading requirements. 

Plaintiffs’ complaint must “‘specify each statement alleged to have been misleading’ along with 

‘the reason or reasons why the statement is misleading’” and “state with particularity facts giving 

rise to a strong inference that the defendant acted with the required state of mind.” Id. at 942 

(quoting 15 U.S.C. § 78u-4(b)(1), (b)(2)).

III.

A.

To succeed on their claims under § 10(b) of the 1934 Act and SEC Rule 10b-5, Plaintiffs 

must prove six elements: “(1) a material misrepresentation or omission by the defendant; 

(2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale 

of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss 

causation.” In re Omnicare, Inc. Sec. Litig. (Omnicare III), 769 F.3d 455, 469 (6th Cir. 2014) 

(quoting Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 37-38 (2011)). The district court 

held that Plaintiffs’ amended complaint failed to adequately allege a strong inference of scienter. 

“In the securities-fraud context, scienter includes a knowing and deliberate intent to manipulate, 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 8

deceive, or defraud, and recklessness.” Doshi, 823 F.3d at 1039 (citations and internal quotation 

marks omitted).

In Tellabs, 551 U.S. 308, the Supreme Court set forth a three-part test used by lower 

courts to determine the sufficiency of a plaintiff’s scienter allegations. First, we must “accept all 

factual allegations in the complaint as true.” Id. at 322. Second, we “must consider the 

complaint in its entirety” to determine “whether all of the facts alleged, taken collectively, give 

rise to a strong inference of scienter.” Id. at 322-23. Third, we “must take into account plausible 

opposing inferences” and decide whether “a reasonable person would deem the inference of 

scienter cogent and at least as compelling as any opposing inference one could draw from the 

facts alleged.” Id. at 323-24. We apply this test with reference to nine non-exhaustive factors:

(1) insider trading at a suspicious time or in an unusual amount; (2) divergence 

between internal reports and external statements on the same subject; 

(3) closeness in time of an allegedly fraudulent statement or omission and the 

later disclosure of inconsistent information; (4) evidence of bribery by a top 

company official; (5) existence of an ancillary lawsuit charging fraud by a 

company and the company’s quick settlement of that suit; (6) disregard of the 

most current factual information before making statements; (7) disclosure of 

accounting information in such a way that its negative implications could only be 

understood by someone with a high degree of sophistication; (8) the personal 

interest of certain directors in not informing disinterested directors of an 

impending sale of stock; and (9) the self-interested motivation of defendants in 

the form of saving their salaries or jobs.

Omnicare III, 769 F.3d at 473 (quoting Helwig v. Vencor, Inc., 251 F.3d 540, 552 (6th Cir. 

2001)).

Plaintiffs’ theory of scienter is straightforward. After meeting with the FDA in August, 

Esperion issued statements saying that the FDA told Esperion that it would not need to complete 

a CVOT prior to approval in the high-unmet-need patient population, and that the FDA would 

continue to consider lower LDL-cholesterol levels as a proxy for improved heart health. But 

after the FDA published its final minutes from the End-of-Phase 2 meeting, Esperion issued 

statements saying that the FDA might require a completed CVOT before approving ETC-1002, 

and that there was some doubt regarding whether lower LDL-cholesterol would remain an 

acceptable proxy. According to Plaintiffs, the only explanation for this discrepancy is that 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 9

Esperion’s August statements regarding what transpired at the meeting were knowingly or 

recklessly false. After all, according to administrative guidance, the FDA’s minutes are the 

“official record” of what transpired at the End-of-Phase 2 meeting. U.S. Dep’t of Health & 

Human Servs., Guidance for Industry: Formal Meetings Between the FDA and Sponsors or 

Applicants 10, ¶ X (May 2009) (accessible at https://bit.ly/2q3itP6). Therefore, there should 

have been no substantial difference between the FDA’s minutes and Esperion’s original account 

of the meeting.

Esperion offers two possible explanations for the differences between its August and 

September statements. The company first says that Esperion’s September statements were made 

with “the benefit of further information not available in August”—i.e., the FDA’s final minutes. 

In other words, Esperion suggests that the FDA’s minutes did not accurately reflect what 

transpired at the End-of-Phase 2 meeting. Under this theory, some time after the meeting, the 

FDA decided to change its positions regarding the necessity of a completed pre-approval CVOT 

and the viability of LDL-cholesterol as a proxy for cardiovascular risk. Those changes in 

position were then added to the FDA’s meeting minutes, and Esperion was caught unaware.

Second, Esperion suggests that it “might have left the meeting with a different impression 

than the FDA minutes ultimately reflected.” Under this theory, the FDA accurately stated its 

positions during the meeting, but the company’s executives simply misunderstood what the FDA 

told them. Esperion then repeated those mistaken beliefs—along with significant cautionary 

language—to its investors in August, and later corrected its statements once the FDA published 

its minutes.

Neither explanation, however, is more plausible than the knowing or reckless fraud 

alleged by Plaintiffs. Esperion provides no reason why the FDA would have changed its position 

following the End-of-Phase 2 meeting. Granted, the FDA has a dispute resolution procedure 

through which drug sponsors can seek changes to the minutes when there are “significant 

differences in understanding” between the FDA and the sponsor. Id. at 10-11, ¶ XI. This lends 

credence to Esperion’s argument that the FDA’s minutes sometimes differ from what actually 

transpires at a meeting. But here, Esperion did not avail itself of the dispute resolution 

procedure, even though the FDA’s minutes (according to Esperion) represented a material shift 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 10

from what the FDA told the company in August. Esperion argues that it could not have gained 

any advantage from requesting revised minutes, since the FDA could still have required the 

company to complete a pre-approval CVOT. One advantage readily comes to mind: removing 

the basis for this suit. Although it is possible that the FDA’s minutes differed from what was 

actually said during the End-of-Phase 2 meeting, this explanation is no more plausible than 

Plaintiffs’ inference that Esperion knowingly and deliberately misrepresented the FDA’s 

statements.

Esperion’s suggestion that its executives misapprehended the FDA’s position is also 

unavailing. In a securities-fraud case, an inference of recklessness is sufficient to satisfy a 

plaintiff’s pleading burden on the scienter element. Doshi, 823 F.3d at 1039. And in this 

context, recklessness is defined as “highly unreasonable conduct which is an extreme departure 

from the standards of ordinary care . . . akin to conscious disregard.” PR Diamonds Inc. v. 

Chandler, 364 F.3d 671, 681 (6th Cir. 2004) (citations omitted). If Esperion is conceding that it 

was told by the FDA that it must complete a CVOT, but then mistakenly told its investors the 

exact opposite, this supports Plaintiffs’ inference of recklessness. This is especially true in light 

of the high stakes involved. Esperion’s success as a company depends entirely upon the success 

of ETC-1002, its only product, and adding a completed CVOT as a prerequisite to approval 

makes an already arduous process more costly and lengthy.

Three of the Helwig factors weigh in Plaintiffs’ favor. First, and most significantly, 

Plaintiffs have shown divergence between Esperion’s internal reports regarding the FDA 

approval process and its external statements on the same subject. Helwig, 251 F.3d at 552. We 

have described divergence as the “key factor” to a finding of scienter. City of Monroe Emps. 

Ret. Sys. v. Bridgestone Corp., 399 F.3d 651, 688 (6th Cir. 2005). Plaintiffs allege that the 

FDA’s minutes reflect what actually transpired at the End-of-Phase 2 meeting. Because 

Esperion executives attended the meeting and presumably understood what was said, Plaintiffs 

suggest, the company knew internally that the FDA might require a completed pre-approval 

CVOT, and might not allow the company to use LDL-cholesterol as a surrogate for 

cardiovascular risk. Yet Esperion’s press release, an external statement, “confirmed that LDL-C 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 11

remains an acceptable clinical surrogate endpoint,” and said that “approval of ETC-1002 in the 

HeFH and ASCVD patient populations will not require the completion of a [CVOT].”

Esperion balks, arguing that the End-of-Phase 2 meeting and the FDA’s minutes do not 

qualify as “internal reports” for the purpose of the second Helwig factor. But this formalistic 

definition is inconsistent with the way we have understood “internal reports” in the past. In 

Bridgestone, for instance, we viewed the contents of meetings at which senior corporate officers 

were present as “internal reports.” Id.

Relatedly, Plaintiffs’ allegations also fall under the sixth Helwig factor, “disregard of the 

most current factual information before making statements.” Helwig, 251 F.3d at 552. Plaintiffs 

allege, and we must accept as true, that Esperion’s August statements to its investors were 

inconsistent with the most current factual information provided to the company by the FDA.

Last, the “closeness in time” factor also weighs in Plaintiffs’ favor, albeit minimally. 

This factor is viewed as potentially probative of scienter because a “short turnaround ma[kes] it 

less likely that the corporation did not know that its statement was misleading.” Omnicare III, 

769 F.3d at 484. In Bridgestone, we found that a one-week span between an allegedly fraudulent 

statement and a subsequent inconsistent disclosure was probative of scienter, but we rejected the 

same inference when confronted with a four-month gap. Bridgestone, 399 F.3d at 684, 687-88. 

Here, the six-week gap between Esperion’s August and September statements falls comfortably 

in between.

None of the other Helwig factors apply in this case. Plaintiffs do not allege that Esperion 

executives engaged in insider trading or bribery, that the company quickly settled an ancillary 

suit, that the company disclosed accounting information in a confusing manner, or that Esperion 

directors had a conflict of interest. See Helwig, 251 F.3d at 552.

They do claim, though, that Mayleben possessed the “self-interested motivation . . . of 

saving [his] salar[y] or job[].” Id. Under this factor, Plaintiffs argue that Mayleben was 

motivated to make false statements because his compensation is directly tied to the company’s 

performance. However, general allegations of “an executive’s desire to protect his position 

within a company or increase his compensation” do not comprise a motive for fraud, because 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 12

such a desire is shared by all corporate officers. PR Diamonds, 364 F.3d at 690 (citations

omitted). Rather, “to demonstrate motive, a plaintiff must show concrete benefits that could be 

realized by one or more of the false statements and wrongful nondisclosures alleged.” Id. 

Plaintiffs’ motive allegations are too general and speculative to support an inference of scienter 

under the ninth Helwig factor.

Nonetheless, “the absence of a motive allegation is not fatal.” Tellabs, 551 U.S. at 325. 

Accepting Plaintiffs’ factual allegations as true and taking them collectively, as we must do at 

this juncture, “a reasonable person [would] deem the inference of scienter at least as strong as 

any opposing inference.” Id. at 326. Esperion has offered no innocent inference stronger than 

Plaintiffs’ inference that Esperion knowingly or recklessly made material misrepresentations or 

omissions in its August communications with investors. Such an innocent inference would 

require us to believe either that the FDA’s meeting minutes do not accurately reflect what took 

place in the meeting, or that Esperion misunderstood what the FDA intended to require. The 

former is implausible; the latter supports Plaintiffs’ allegation of recklessness.

Our decision in Kuyat is not to the contrary. There, the plaintiffs alleged that 

BioMimetic, a company developing a new medical device, misled investors regarding the 

device’s prospects for FDA approval. Kuyat, 747 F.3d at 437. The FDA had previously 

expressed concerns regarding the company’s definition of the patient population to be studied, 

suggesting that it study a broader population. Id. at 438. BioMimetic conducted clinical trials, 

achieved statistically significant results in the company’s desired population, and expressed 

optimism that the FDA would eventually approve its new device. Id. at 439. However, the FDA 

ultimately decided not to approve the device, relying in part upon BioMimetic’s failure to show 

the device’s effectiveness in the broader population. Id. at 440. A group of investors filed suit, 

alleging that BioMimetic painted too rosy a picture of the device’s prospects of approval, 

especially in light of the FDA’s earlier concerns. Id. We held that the plaintiffs failed to 

adequately plead scienter: “While BioMimetic may have ultimately been mistaken about which 

population the FDA wanted the company to use . . . there are no facts suggesting the company 

knew this at the time its representatives spoke.” Id. at 442. In so holding, we pointed out that 

the FDA was not definitive in its statements regarding the patient population it expected 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 13

BioMimetic to analyze, and we credited the company for its willingness to release the results of a 

study containing both positive and negative results. Id. at 442-43.

Here, unlike Kuyat, Plaintiffs allege facts—that the FDA meeting minutes reflect what 

was said during the End-of-Phase 2 meeting, and that what was said at that meeting was 

inconsistent with what Esperion told its investors in August—that most assuredly support a 

strong inference that the company knew its statements were false. At the very least, Plaintiffs’ 

allegations support a strong inference that Esperion recklessly misstated to its investors what the 

FDA said during the meeting. The district court therefore erred by concluding that Plaintiffs’ 

amended complaint failed to adequately allege scienter.

B.

The PSLRA also contains a limited safe harbor for forward-looking statements. Subject 

to other limitations that are irrelevant here, in a securities-fraud case, a defendant will not be 

liable for a material forward-looking statement if either (1) the statement is “identified as a 

forward-looking statement, and is accompanied by meaningful cautionary statements identifying 

important factors that could cause actual results to differ materially from those in the forwardlooking statement,” or (2) “the plaintiff fails to prove that the forward-looking statement . . . was 

made with actual knowledge . . . that the statement was false or misleading.” 15 U.S.C. § 78u5(c)(1)(A)-(B). The statute defines a “forward-looking statement” as, among other things, “a 

statement of the plans and objectives of management for future operations, including plans or 

objectives relating to the products or services of the issuer,” and “any statement of the 

assumptions underlying or relating to” such a statement. Id. § 78u-5(i)(1)(B), (D). However, the 

safe harbor does not extend to “a statement of present or historical fact.” Miller v. Champion 

Enters. Inc., 346 F.3d 660, 678 (6th Cir. 2003).

Esperion argues that its August statements regarding the End-of-Phase 2 meeting fall 

within this safe harbor, either as forward-looking statements or as assumptions underlying 

forward-looking statements. Under this theory, Esperion’s August statements that the FDA had 

confirmed that it would not require completion of a CVOT prior to approving ETC-1002 looked 

toward the prospect of future approval.
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 14

Although it is true that Esperion’s statements concern an event in the future, that alone 

does not automatically make them forward-looking statements. In Julianello v. K-V 

Pharmaceutical Co., 791 F.3d 915, 921 (8th Cir. 2015), our sister circuit supplied a useful test: 

“The critical inquiry in determining whether a statement is forward-looking is whether its 

veracity can be determined at the time the statement is made . . . .” If so, then the statement is 

not forward-looking. Take for instance a man’s statement to his friend, “My girlfriend has 

agreed to marry me.” That is not a forward-looking statement. Rather, it is a backward-looking 

statement concerning a future event. When the man spoke to his friend, it was objectively 

discernable whether his girlfriend had accepted his proposal—either she had, or she had not.

Similarly, the operative statements here—“[w]e know that [ETC-]1002 will not require a 

CV outcomes trial to be completed prior to approval in patients with [HeFH] and ASCVD,” and 

the like—are not forward-looking. When Esperion made its statements in August, the company 

knew what the FDA had told it during the End-of-Phase 2 meeting. Therefore, the truth or 

falsity of Esperion’s statements was discernible at the time they were made.

Esperion might still escape liability, however, if the contested statements were 

“assumptions underlying or relating to” a forward-looking statement. 15 U.S.C. § 78u5(i)(1)(D). This is the conclusion reached by the district court, based upon our holding in Miller, 

346 F.3d at 680-81. There, we held that, consistent with the statutory language, present factual 

statements that underlie forward-looking statements can fall within the PSLRA’s safe harbor. Id. 

Miller concerned, in part, an allegation that the defendant had engaged in fraud by making the 

following materially false statement:

As we start the second half of the year, we know that you are as concerned as we 

are regarding the performance of Champion Enterprises stock compared with the 

overall market. Housing stocks in general have under[-]performed the markets in 

1999, and we are no exception. Given the continuation of outstanding earnings 

growth and the successful implementation of our retail strategy, we challenge 

ourselves as to what we can do to enhance our stock value in a market dominated 

by Internet and the Dow Jones Nifty 50 stocks.

Id. at 676 (emphasis added). The plaintiffs in Miller alleged that because the word 

“continuation” referred to the then-present state of affairs, the statement fell outside the PSLRA 

safe harbor. Id. at 676-77. We disagreed, concluding that the “continuation” language, 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 15

“although certainly implying some present circumstances, also [was] the basis for the later 

forward-looking statements” regarding the company’s “challenge” to enhance its stock value. Id.

at 677 (citation and internal quotation marks omitted).

Applying the same standard to this case, Esperion argues that its August statements 

should be characterized as follows: Esperion was making a forward-looking prediction about the 

regulatory environment (no completed CVOT required for approval) that was grounded in an 

underlying historical fact (what the FDA told Esperion at the End-of-Phase 2 meeting). But this 

argument mischaracterizes the nature of Esperion’s statements. Where the language used by the 

defendant in Miller was phrased as an assumption (“given the continuation . . .”), here, 

Esperion’s statements were phrased as an observation of a historical fact (“The FDA confirmed . 

. .”). Miller’s holding on the “continuation” language was confined to cases of “assumption” 

language. Id. at 677.

A different standard applies where, as here, a defendant makes “mixed statement[s] of 

present fact and future prediction.” Id. The Miller court held that when a defendant makes 

mixed statements, and a statement of present or historical fact is specifically challenged as 

fraudulent, it can be separated from surrounding forward-looking statements that remain within 

the safe harbor. Id. at 678-79. To do so, the statements of fact must be “easily separable from 

the ‘forward-looking statements,’” and the statements of fact must not have been “given merely 

as an ‘assumption underlying’ future projections.” Id. at 679. Put another way, a non-forwardlooking statement that can be analyzed discretely from forward-looking statements, and does not 

function as an express assumption underlying a future projection, is outside the PSLRA safe 

harbor for forward-looking statements.

Esperion’s August statements regarding what the FDA purportedly said during the Endof-Phase 2 meeting—that “[t]he FDA confirmed that LDL-C remains an acceptable clinical 

surrogate endpoint for the approval of an LDL-C lowering therapy,” and that “[w]e know that 

[ETC-]1002 will not require a CV outcomes trial to be completed prior to approval in . . . those 

patient populations that the FDA considers to have an appropriate benefit/risk ratio”—are 

separable statements of fact that are not merely assumptions upon which forward-looking 

statements were made. The truth or falsity of these statements, and others like them, could have 
No. 17-1701 Dougherty, et al. v. Esperion Therapeutics, et al. Page 16

been ascertained in August when Esperion made the statements. Accordingly, under Miller, they 

fall outside the PSLRA safe harbor, and the district court erred by holding otherwise.

C.

One final issue warrants mention. Plaintiffs’ § 20(a) “control person” claim against 

Mayleben is derivative of their § 10(b) and Rule 10b-5 claims against Esperion. See Doshi, 

823 F.3d at 1045. Because Plaintiffs adequately pleaded their claims against Esperion, they also 

adequately pleaded their claims against Mayleben.

REVERSED and REMANDED.