Opinion ID: 203426
Heading Depth: 3
Heading Rank: 2

Heading: Merits of Shortened Class Period Claim

Text: Here, even considering the theory, it fails. There was a ten-day period between the earliest knowledge on February 18, 2005 of one PML death and the potential PML diagnosis of a second patient, and the announcement on February 28, 2005 that TYSABRI was being withdrawn due to the PML diagnoses. That was a reasonable period of time for defendants to make their disclosures. [23] See Higginbotham, 495 F.3d at 761 (Managers cannot tell lies but are entitled to investigate for a reasonable time, until they have a full story to reveal.). At a minimum, Biogen needed to understand whether PML was caused by TYSABRI. This entailed understanding whether both patients with PML had any medical history showing they were susceptible to PML and sorting through whether, if there were a causal connection, it involved TYSABRI alone or an interaction between TYSABRI and AVONEX, since both patients were participating in the combination trial. During the ten-day period, the company was also cooperating with the FDA. The company would have behaved irresponsibly (and possibly in violation of the securities laws) if it had made a public announcement which was possibly inaccurate because the situation of the PML incidences had not yet been adequately investigated. This obligation on drug companies to investigate and to be accurate in their material public statements holds even when the adverse information comes from clinical trials on drugs to treat very ill patients. See id. at 758 (Knowing enough to launch an investigation ([the defendants] could not simply assume that the initial report of bad news was accurate) is a very great distance from convincing proof of intent to deceive.); id. at 760-61 (Prudent managers conduct inquiries rather than jump the gun with half-formed stories as soon as a problem comes to their attention.); cf. Carter-Wallace I, 150 F.3d at 157 (Drug companies need not disclose isolated reports of illnesses ... until those reports provide statistically significant evidence that the ill effects may be caused by  rather than randomly associated with  use of the drugs and are sufficiently serious and frequent to affect future earnings.).