NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

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No. 21-1870

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IN RE: KERYX BIOPHARMACEUTICAL

John Andruela and Abraham Kiswani,

Appellants

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On Appeal from the United States District Court

for the District of Delaware

(Civ. No. 1:18-cv-01589) 

District Judge: Honorable Colm F. Connolly

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Submitted Under Third Circuit LAR 34.1(a)

on February 10, 2022

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Before: GREENAWAY, JR., SCIRICA, and RENDELL, Circuit Judges, 

(Opinion Filed: July 21, 2022)

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OPINION

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 This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, 

does not constitute binding precedent.
2

GREENAWAY, JR., Circuit Judge.

Keryx Biopharmaceutical, Inc. (“Keryx”) shareholders, Abraham Kisawani and 

John Andreula (collectively, the “Appellants”), on behalf of themselves and all other 

public Keryx shareholders, commenced this putative class action suit against Keryx and 

members of its Board of Directors (collectively, the “Appellees”). They allege that 

Keryx’s Schedule 14A Definitive Proxy Statement (the “Proxy”) proposing a merger 

with Akebia Therapeutics, Inc. (“Akebia”) included false and misleading statements. 

However, Appellants’ claims fail either because Appellants’ claims are not plausibly 

alleged, or Appellees did not make false or misleading statements. Because Appellants 

fail to allege actionable omissions, misrepresentations, or falsehoods, we will affirm the 

District Court’s order dismissing Appellants’ complaint.

I. BACKGROUND

A. Merger Transaction

In December 2017, Akebia, a development-stage biopharmaceutical company, 

contacted Keryx, a commercial-stage biopharmaceutical company, to discuss a potential 

merger transaction. During negotiations, Keryx prepared two relevant sets of financial 

projections—the first of which was based on Keryx’s assumptions about Akebia’s 

business and the second of which was partially based on information that Akebia 

provided to Keryx (the “Adjusted Projections”). Keryx presented these projections 

during a special committee meeting1 on May 30, 2018.

1 Keryx had convened a special committee to discuss the possibility of a merger. 
3

Between June 12 and 14, 2018, Akebia determined that the completion of its 

clinical trial and, by extension, the commercial launch of its lead product, vadadustat, 

would be delayed. Given these developments, Akebia updated its financial projections. 

Akebia’s CEO then advised Keryx’s Interim CEO of this development on June 15, 2018. 

On June 27, 2018, MTS Securities LLC (“MTS”), an affiliate of Keryx’s financial 

advisor for the merger, opined that the merger was financially fair.

2

 MTS based its 

fairness opinion on, amongst other information, Keryx’s Adjusted Projections—which 

were prepared before May 30, 2018, and were not revised to incorporate the vadadustat 

delay. The following day, Keryx announced its approval of the merger transaction. 

Ultimately, the companies jointly filed the Proxy on October 30, 2018, and a majority of 

Keryx’s shareholders approved the transaction on December 12, 2018. 

B. Proxy Statement

Appellants challenge three statements in the Proxy. The first statement they 

challenge is included in the section of the Proxy describing MTS’s fairness opinion. It 

states: 

In arriving at its opinion, MTS Securities assumed and relied upon, without 

assuming liability or responsibility for independent verification, the accuracy and 

completeness of all of the financial, legal, regulatory, tax, accounting and other 

information that was publicly available or was provided to, discussed with or 

reviewed by MTS Securities and upon the assurances of Keryx management that 

they were not aware of any material relevant developments or matters related to 

Keryx or Akebia or that may affect the Merger that were omitted or that remained 

undisclosed to MTS Securities.

2 Keryx retained MTS “to render an opinion as to the fairness of the Merger to Keryx 

stockholders from a financial perspective.” JA30 ¶ 13. 
4

(the “Material Developments Statement”). JA214. Appellants argue that this statement 

was misleading because “Keryx management was aware of material relevant 

developments or matters related to Akebia that were likely to affect the Merger and that 

were omitted or remained undisclosed to MTS.” Appellants Br. at 7-8.

Similarly, Appellants challenge a second statement in the MTS fairness opinion 

section, which states:

Without limiting the generality of the foregoing, with respect to the Projections, 

MTS Securities assumed, with the consent of the Keryx Board and based upon 

discussions with Keryx management and Akebia management, that each of the 

Projections was reasonably prepared in good faith and that the Projections, 

including any estimates of certain potential benefits of the Merger prepared by 

Keryx management and the timing to achieve such benefits, reflected the best 

currently available estimates and judgments of Keryx management and Akebia 

management regarding the future results of operations and financial performance 

of Keryx and Akebia.

(the “Best Estimates Statement”). JA214. Appellants contend that this statement was 

misleading because “Keryx management did not believe that its projections regarding the 

future results of operations and financial performance of Akebia, reflected its best 

currently available estimates and judgments.” Appellants’ Br. at 8.

Lastly, Appellants challenge two Keryx statements that characterized the merger 

as fair (collectively, the “Fairness Statements”). Specifically, in the Notice of Special 

Meeting of Shareholders, which accompanied the Proxy, Keryx stated that “the Merger 

Agreement and the Merger are advisable, fair to, and in the best interests of Keryx and its 

shareholders.” JA114. Likewise, the Proxy indicates that “[t]he Keryx Board has

determined that the Merger Agreement and the merger are advisable and in the best 

interest of Keryx and the Keryx shareholders.” JA122. Appellants assert these
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statements were misleading because “[Appellees] knew that the Merger was not ‘fair’ to 

[Keryx’s] stockholders.” Appellants’ Br. at 8.

C. Procedural History

Appellants commenced this action on October 16, 2018. Following Appellants’ 

filing of a Consolidated Amended Class Action Complaint on June 3, 2019,3the District 

Court granted Appellees’ motion to dismiss on April 15, 2020. Appellants then sought 

leave to amend the complaint, which the District Court granted. In their Second 

Amended Complaint, Appellants alleged the Material Developments, Best Estimates, and 

Fairness Statements violated Sections 14(a) and 20(a) of the Securities Exchange Act of 

1934 (the “Exchange Act”), 15 U.S.C. §§ 78n(a) and 78t(a), and U.S. Securities and 

Exchange Commission (“SEC”) Rule 14a-9, 17 C.F.R. § 240.14a-9. 

Appellees again moved to dismiss Appellants’ complaint, and, on April 1, 2021, 

the District Court dismissed Appellants’ action with prejudice, concluding that none of 

the statements were actionable. Concerning Appellants’ claim based on the Material 

Developments Statement, the District Court first concluded that it was not plausibly 

alleged. Although it agreed with Appellants that the Material Developments Statement 

implied that Keryx had made assurances to MTS as of June 27, 2018, (the date of the 

3 The three related actions that were consolidated in this case are: Corwin v. Keryx 

Biopharmaceuticals, Inc., 18-cv-1589-CFC; Van Hulst v. Keryx Biopharmaceuticals,

Inc., l 8-cv-1656-CFC; and Andreula v. Keryx Biopharmaceuticals, Inc., 18-cv-1721-

CFC.
6

fairness opinion), the District Court determined that Appellants had not made sufficient 

factual allegations that any material relevant developments were not disclosed. 

The District Court then rejected the argument that the Material Developments

Statement was misleading based on Appellees’ failure to disclose what Keryx believed as 

of June 27, 2018; it reasoned that the Proxy explicitly disclosed that the Projections were 

prepared before May 30, 2018. In addition, the District Court determined that the 

Material Developments Statement was not material because “a disclosure by Keryx in the 

Proxy that its management had not told MTS before June 27, 2018 that its May 2018 

projections were stale and not its best estimate as of June 27, 2018, would not have 

significantly altered the ‘total mix’ of information made available” to shareholders. JA14 

(internal quotation marks and citation omitted). The District Court reasoned that the 

Proxy disclosed, among other factors, the vadadustat delay, MTS’s reliance upon 

Akebia’s updated projections, and MTS’s discussions with Akebia about the revised 

projections. Id.

Next, in dismissing Appellants’ claim based on the Best Estimates Statement, the 

District Court relied on its reasoning from the April 15, 2020 opinion. There, the District 

Court had concluded that any challenge to the Best Estimates Statement based on the 

reasonableness of the Projections was inactionable given the Proxy’s disclaimers, see 

OFI Asset Mgmt. v. Cooper Tire & Rubber, 834 F.3d 481, 500-01 (3d Cir. 2016), and that 

the Private Securities Litigation Reform Act’s safe harbor provision, see 15 U.S.C. 

§ 78u-5, protecting forward looking statements, applied. The District Court had also 
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rejected Appellants’ position that the Best Estimates Statement challenged a statement of 

opinion because that statement concerned what MTS assumed. Given that the Proxy 

explicitly disclosed the Projections were made in May 2018, the District Court had also 

rejected Appellants’ argument that the Best Estimates Statement implicitly stated what 

the Appellees believed as of June 27, 2018. 

Lastly, the District Court concluded that Appellants had not plausibly alleged that 

Keryx did not believe the merger was fair. Specifically, it determined that paragraph 10 

of the Second Amended Complaint contained conclusory allegations. Subsequently, 

Appellants timely appealed the April 1, 2021 order. 

II. JURISDICTION AND STANDARD OF REVIEW

The District Court had jurisdiction pursuant to 28 U.S.C. § 1332. We have 

jurisdiction pursuant to 28 U.S.C. § 1291.

“We review a district court’s decision granting a party’s motion to dismiss de 

novo.” Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). In doing so, 

we must “accept all factual allegations in the complaint as true and view them in the light 

most favorable to the plaintiff.” Id. We cannot “dismiss a complaint for failure to state a 

claim upon which relief can be granted unless we find that the plaintiff can prove no set 

of facts that would entitle her to relief.” Id.

III. DISCUSSION

“Section 14(a) seeks to prevent management or others from obtaining 

authorization for corporate actions by means of deceptive or inadequate disclosures in 
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proxy solicitations.” Seinfeld v. Becherer, 461 F.3d 365, 369 (3d Cir. 2006) (citation 

omitted). Pursuant to Section 14(a), it is unlawful to solicit a proxy “in contravention of 

such rules and regulations as the [SEC] may prescribe as necessary or appropriate in the 

public interest.” 15 U.S.C. § 78n(a). Rule 14a–9, which is promulgated under Section

14(a), provides that proxy statements shall not include “any statement which, at the time 

and in the light of the circumstances under which it is made, is false or misleading with 

respect to any material fact, or which omits to state any material fact necessary in order to 

make the statements therein not false or misleading . . . .” 17 C.F.R. § 240.14a–9(a); see 

also Seinfeld, 461 F.3d at 369.

To successfully plead a claim pursuant to Section 14(a), a plaintiff must 

demonstrate that: “(1) a proxy statement contained a material misrepresentation or 

omission which (2) caused the plaintiff injury and (3) that the proxy solicitation itself, 

rather than the particular defect in the solicitation materials, was an essential link in the 

accomplishment of the transaction.” Jaroslawicz v. M&T Bank Corp., 962 F.3d 701, 710 

(3d Cir. 2020), cert. denied, 141 S. Ct. 1284 (2021) (quoting Tracinda Corp. v.

DaimlerChrysler AG, 502 F.3d 212, 228 (3d Cir. 2007)). Our inquiry here is focused on 

the first element. 

We have held that omissions are actionable “if either the SEC regulations 

specifically require disclosure of the omitted information in a proxy statement, or the 

omission makes other statements in the proxy statement materially false or misleading.” 

Seinfeld, 461 F.3d at 369 (citation omitted). We have further held that a 
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misrepresentation or omission is material, “if there is a substantial likelihood that a 

reasonable shareholder would consider it important in deciding how to vote.” Shaev v.

Saper, 320 F.3d 373, 379 (3d Cir. 2003) (citations omitted). In analyzing materiality, we 

first consider whether “the disclosure of the omitted fact [or misrepresentation] would 

have been viewed by the reasonable investor as having significantly altered the total mix 

of information made available.” EP Medsystems, Inc., v. EchoCath, Inc., 235 F.3d 865, 

872 (3d Cir. 2000) (alteration in original) (internal quotation marks and citation omitted). 

“Second, we assess the materiality of a statement ‘at the time and in the light of the 

circumstances under which it is made.’” Jaroslawicz, 962 F.3d at 709–10 (quoting 

Seinfeld, 461 F.3d at 369).

A. Material Developments Statement

Appellants essentially allege that the Material Developments Statement was false 

and misleading because Appellees had not disclosed the vadadustat developments to 

MTS but indicated in the Proxy that they had shared all material developments with it. 

As an initial matter, Appellants’ claim based on the Material Developments Statement is 

not plausibly alleged. As the District Court concluded, Appellants’ allegation that 

“Keryx management was aware of material relevant developments or matters related to 

Akebia that may affect the Merger and that were omitted or remained undisclosed to 

MTS” is conclusory. JA77 ¶ 10; see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 

(“Threadbare recitals of the elements of a cause of action, supported by mere conclusory 

statements, do not suffice.”). Although Appellants make factual allegations concerning
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Keryx’s knowledge of the vadadustat development, its meetings with MTS, and its 

instructions that MTS use the Adjusted Projections, their factual allegations do not 

sufficiently support the inference that Keryx did not disclose the vadadustat 

developments to MTS.

Even assuming this claim was plausibly alleged, it otherwise fails because the 

Material Developments Statement is neither false nor misleading. The Proxy explicitly 

disclosed that Keryx’s Adjusted Projections were prepared before May 30, 2018. Thus, 

the Material Developments Statement solely represents what MTS assumed at the time 

that Keryx gave MTS the projections. See OFI Asset Mgmt., 834 F.3d at 501 (reasoning 

that, when a proxy disclaimed the accuracy of financial projections included therein, 

these projections represented only that they “were, in fact, the projections that [the 

defendant] provided to [the counterparty] and the financing bank during the negotiation 

of the deal”). Appellants do not dispute that MTS made these assumptions, so their 

claims regarding the Material Developments Statement fail for an additional reason. 

B. Best Estimates Statement

In short, Appellants allege that the Best Estimates Statement was false and 

misleading because Appellees represented that the Adjusted Projections were their best 

available estimates despite knowing they were stale. Appellants, however, fail to plead 

falsity. As stated previously, the Proxy made clear that Keryx disclaimed that its 

financial projections showed anything other than Keryx’s views at the time they were 

prepared. The Best Estimates Statement, then, represents only that, when Keryx provided 
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these projections to MTS, MTS assumed that they “reflected the best currently available 

estimates and judgments of Keryx management[.]” JA214; see also OFI Asset Mgmt., 

834 F.3d at 501. Because Appellants do not allege that MTS did not make this 

assumption, their claims concerning the Best Estimates Statement also fail. 

C. Fairness Statements

Appellants allege the Fairness Statements were false because the Appellees knew 

the merger was not fair. In support of this position, Appellants rely on various 

allegations concerning Keryx’s share price, Keryx’s instructions that MTS use the 

Adjusted Projections, MTS’s analyses, and Keryx employees’ incentives for closing the 

transaction. 

However, Appellants’ claim fails because it is not plausibly alleged. As Appellees 

argue, Appellants’ claim relies on facts that were specifically disclosed in the Proxy. The 

Proxy also contains several other positive considerations that Appellees weighed in

making its Fairness Statements. Without more, we cannot conclude that Appellants 

sufficiently pleaded facts that support the inference that Appellees genuinely disbelieved 

the Fairness Statements. 

IV. CONCLUSION

For the foregoing reasons, Appellants have failed to allege a violation of 

Section 14(a). Accordingly, Appellants’ control-liability claims against the individual 

Appellees also fail. See In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 211 
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(3d Cir. 2002). The Court will affirm the District Court’s order dismissing Appellants’ 

complaint.