Dougherty v. Esperion Therapeutics, Inc.

Dougherty v. Esperion Therapeutics, Inc.

Opinion

REPORT AND RECOMMENDATION RE: MOTION FOR CLASS CERTIFICATION AND TO APPOINT CLASS REPRESENTATIVES AND CLASS COUNSEL

This is a securities fraud case brought under Sections 10(b) and 20(a) of the Securities Exchange Act [*2] , 15 U.S.C. §§ 78j(b) and 78t(a), and Securities and Exchange Commission ("SEC") Rule 10b-5, 17 C.F.R. § 240.10b-5. Before the Court is Plaintiffs' Motion for Class Certification, and to Appoint Class Representatives and Class Counsel [ECF No. 66]. Plaintiffs define the proposed class as follows:

"All persons who purchased or otherwise acquired the common stock of Esperion Therapeutics, Inc. between August 18, 2015 and September 28, 2015 (inclusive) and were damaged thereby. Excluded from the Class are the Defendants; the officers and directors of the Company; members of their immediate families, their legal representatives; their heirs, successors or assigns; and any entity in which Defendants have or had a controlling interest."

For the reasons discussed below, and pursuant to 28 U.S.C. § 636(b)(1)(B), I recommend that the motion be GRANTED.

I. BACKGROUND

Defendant Esperion Therapeutics, Inc. ("Esperion") is a pharmaceutical company that was engaged in the development of ETC-1002, a drug aimed at lowering high-density-lipoprotein cholesterol. Defendant Tim M. Mayleben is Esperion's CEO and a member of its Board of Directors. As such, he was heavily involved in Esperion's efforts to secure Food and Drug Administration ("FDA") approval for ETC-1002.¹ An [*3]  important factor in determining the likelihood and time line for FDA approval was whether the FDA would require a cardiovascular outcomes trial ("CVOT"), a lengthy and costly study. On August 11, 2015, Esperion had an End of Phase 2 Meeting ("EOP2 Meeting") with the FDA. Six days later, on August 17, 2015 Esperion published a press release containing the following two statements:

"The 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]."

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