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This post is from the non-Reed Smith side of the blog.

We don’t usually report on securities-law cases, but today we do. That is because the well-reasoned decision in question, In re Allergan PLC Securities Litigation, 2022 WL 17584155 (S.D.N.Y. 2022), has major implications for the parallel Textured Breast Implant MDL now pending in the District of New Jersey.

Like the product-liability plaintiffs in the MDL, the securities-law plaintiffs alleged that Allergan failed to disclose that the incidence of a certain cancer, BIA-ALCL, was, supposedly, higher among patients who had received its textured breast implants than among those who had received other manufacturer’s implants. But rather than claim to have suffered personal injuries, the securities-law plaintiffs claimed to have suffered economic damages because, they said, Allergan’s failure to disclose comparative incidence rates caused them to purchase its stock at inflated prices.

The court found that Allergan had no duty to disclose that its textured breast implants had a higher incidence rate than other manufacturers’ implants. Significantly, the court found that Allergan had no duty to disclose that purported “fact” because the evidence presented on summary judgment demonstrated that it was not true. As the court found, “neither the scientific studies nor the regulatory community has determined that Allergan’s textured implants are in fact more closely associated with BIA-ALCL than competitors’ textured breast implants.” In re Allergan, 2022 WL 17584155, at *11.

The court began by examining the scientific literature. It found that “[t]he scientific studies” cited by the plaintiffs “in support [of their] allegation that Allergan had the highest incidence rate of BIA-ALCL do not reach that conclusion.” 2022 WL 17584155, at *11. Several of the studies reported that the number of BIA-ALCL cases associated with Allergan implants was greater than the number associated with other manufacturers’ implants but raw case numbers, the court explained, say nothing about comparative incidence rates absent data on how many of each manufacturer’s implants had been implanted and how long they had been implanted.

The fact that Allergan was aware of more BIA-ALCL cases associated with its implants than associated with its competitor’s implants was, the court found, also irrelevant to comparative incidence rates, both because Allergan did not have access to its competitor’s data and because in approximately one-third of the cases known to Allergan the implant’s manufacturer could not be determined. 2022 WL 17584155, at *11.

Although the plaintiffs cited two studies that they said reported a higher incidence of BIA-ALCL among recipients of Allergan implants, the court found that the plaintiffs had grossly overstated the studies’ findings, which were subject to significant caveats that prevented any firm conclusions about comparative incidence rates across manufacturers. 2022 WL 17584155, at *12.

Moreover, the court noted, when one of the studies was ultimately completed, it showed that the incidence of BIA-ALCL associated with Allergan’s implants was lower, not higher, than that associated with a competitor’s implants. 2022 WL 17584155, at *12.

The court then surveyed what regulators around the world had said regarding textured breast implants and the incidence of BIA-ALCL. The court found that during the relevant period regulators in various countries “repeatedly stated publicly that no reliable conclusions could be drawn regarding relative incidence rates of BIA-ALCL by manufacturer.” 2022 WL 17584155, at *12. The FDA, for example, said that data limitations, including lack of data regarding “what type of breast implant” individual patients received, “make[] it more difficult to know if any particular breast implant characteristic is associated with BIA-ALCL or if higher reports of BIA-ALCL are simply due to higher implantation rate of a particular manufacturer.” Id. at 13.

On this record, the court rejected the plaintiffs’ contention that Allergan had failed to disclose necessary information when it failed to disclose that its implants were associated with a higher incidence of BIA-ALCL than competitor’s implants. To the contrary, because “both the scientific studies and the global regulators refused to draw any definitive conclusions regarding the incidence rates of BIA-ALCL and particular breast implant manufacturers, Allergan would have been lying, not telling the truth, if it had stated publicly that its implants were more closely associated with BIA-ALCL than were implants manufactured by other companies.” 2022 WL 17584155, at *13.

Mike drop.

Of course, dismissal of the securities litigation still leaves the product-liability MDL, In re Allergan Biocell Textured Breast Implant Product Liability Litigation, MDL No. 2921 (D.N.J.). We have previously reported on that sad affair, and the decision largely denying Allergan’s motion to dismiss earned a spot on our The Ten Worst Prescription Drug/Medical Device Decisions of 2021.

Allergan’s motion to dismiss having been largely denied, discovery is now ongoing in the MDL. Although the court’s findings in the securities case are not binding on the MDL court, we hope that the MDL judge gives the evidence the same close attention as the judge in the securities litigation and likewise concludes that there is no scientific merit to the plaintiff’s claims.