The opinion of the court was delivered by: Richard J. Sullivan, District Judge
Before the Court is a motion by Lead Plaintiff Pipefitters Union Local 537 Pension Fund and Plaintiff City of Livonia Employees' Retirement System (collectively, "Plaintiffs") to strike:
(1) four exhibits submitted by Defendants in connection with their motion to dismiss the Consolidated Complaint, and (2) certain arguments raised by Defendants in their reply submission. Specifically, Plaintiffs move to strike exhibits 1, 2, 3, and 5 of the August 25, 2008 Declaration of Michael J. Chepiga, Esq., which was filed with Defendants' reply submission in support of their motion to dismiss (the "Chepiga Decl." (Doc. No. 32)), as well as Defendants' arguments regarding exhibit 4 of the Chepiga Declaration. For the reasons set forth below, Plaintiffs' motion is granted in part and denied in part.
Below the Court recites only those facts that are relevant to the parties' arguments regarding the instant motion. Nothing in this Order constitutes a finding of fact or a conclusion on the merits with respect to Defendants' pending motion to dismiss.
In this putative class action, Plaintiffs claim that, between June 26, 2006 and July 24, 2007 (the "Class Period"), Defendants made fraudulent misrepresentations and omissions regarding a pharmaceutical product known as Pristiq, for which Defendant Wyeth Essner ("Wyeth") sought regulatory approval from the Food and Drug Administration (the "FDA"). (See Consolidated Compl. ("Compl.") ¶¶ 2, 3.) Based on these allegations, Plaintiffs bring two causes of action pursuant to the Securities Exchange Act of 1934, 15 U.S.C. § 78 et seq. (the "Exchange Act").
Wyeth developed Pristiq as a treatment for, among other things, post-menopausal vasomotor symptoms ("VMS"). (Compl. ¶¶ 16, 25.) Prior to the Class Period, Wyeth initiated Phase 3 clinical trials of Pristiq's safety and efficacy as a treatment for VMS. (Id. ¶ 6.) In December 2003, Wyeth began "Study 315," a randomized study of Pristiq that was conducted on women between the ages of thirty-seven and seventy-eight in thirty-seven locations throughout the country. (Id. ¶ 23.) According to Plaintiffs, there were twenty-seven instances of "serious adverse events" ("SAEs") reported by test subjects during Study 315. (Id. ¶ 25.) The reported SAEs allegedly included liver damage, hypertension, heart attacks, and arterial obstruction. (Id.; see also id. ¶ 78.)
Plaintiffs allege that Wyeth completed its review and analysis of the Study 315 data in May 2005. (Id. ¶ 23.) In June 2006, Wyeth submitted a new drug application ("NDA") to the FDA seeking approval for the use of Pristiq as a treatment for VMS (the "VMS NDA"). (Id. ¶ 25.) Plaintiffs allege that "[t]he safety data associated with Study 315 [was] submitted to the FDA" as part of the VMS NDA. (Id.) However, Plaintiffs argue that Defendants concealed from the public the SAEs that occurred during Study 315, and made false and misleading statements about the likelihood that the Pristiq VMS NDA would be approved. In support of these allegations, Plaintiffs point to a slide presentation given by Wyeth on October 5, 2006 at its annual conference for analysts and investors. (Id. ¶ 69.) Plaintiffs argue that the use of slides praising Pristiq as a safe and effective treatment for VMS, without disclosing the SAEs, constituted a material omission in violation of the Exchange Act. (Id. ¶ 78.)
Plaintiffs assert that Defendants undertook this fraudulent scheme in an attempt to overcome financial problems arising out of Wyeth's difficulty in developing new products and the imminent expiration of the patents on Wyeth's older drugs. Plaintiffs argue that one source of the economic difficulty faced by Wyeth, and other pharmaceutical manufacturers, was that the FDA was increasingly rejecting NDAs for drugs that were in the later stages of development. (Id. ¶ 10.) Plaintiffs refer to this phenomenon as the "pipeline problem," and they allege that it is "well known, has been widely discussed in the media and has been a major issue for all pharmaceutical companies . . . ." (Id.)
When resolving a motion to dismiss pursuant to Rule 12(b)(6), courts are permitted to consider documents that are attached to the complaint, materials that are incorporated into the pleading by reference, and matters of which judicial notice may be taken. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S.Ct. 2499, 2509 (2007); Rothman v. Gregor, 220 F.3d 81, 88 (2d Cir. 2000). A document may be deemed to be incorporated into a complaint by reference when the pleading contains extensive quotes from the document. See, e.g., Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006). Courts may also consider documents the "terms and effect" of which plaintiffs strongly rely upon in making their allegations. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). Indeed, even if the plaintiffs only reference selected portions of a document, courts are permitted to consider the text in full if it may properly be deemed integral to the pleading. San Leandro Emergency Med. Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 808-09 (2d Cir. 1996). However, "[l]imited quotation does not constitute incorporation by reference." Goldman v. Belden, 754 F.2d 1059, 1066 (2d Cir. 1985); see also Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004).
Plaintiffs move to strike the media articles submitted by Defendants as exhibits 1, 2, and 3 of the Chepiga Declaration, as well as exhibit 5, which is the Clinical Study Report regarding Study 315. Additionally, although Plaintiffs do not challenge the document itself, they move to strike Defendants' arguments based on exhibit 4 of the Chepiga Declaration, which contains excerpts from Wyeth's October 5, 2006 slide presentation to analysts and investors. For the reasons set forth below, Plaintiffs' motion ...