Cooley Secures Win for FibroGen in Securities Fraud Class Action

Palo Alto – March 15, 2024 – Cooley successfully rebutted the “fraud on the market” presumption in a securities class action against client FibroGen – a biopharmaceutical company that discovers and develops medicines for the treatment of anemia, cancer and fibrotic disease. Lawyers Patrick Gibbs, Tijana Brien, Brett De Jarnette, Alexandra Eber, Caitlin Munley, Amie Simmons and Kimberley Scimeca led the Cooley team representing FibroGen.

The lead plaintiffs sought to certify a class of purchasers of FibroGen stock from December 20, 2018, through July 15, 2021. FibroGen argued that the class period should end after the stock drop on April 6, 2021. Specifically, FibroGen sought to dismiss the second-largest stock drop, tied to the end of the alleged class period, by rebutting the presumption of reliance – a presumption that purchasers relied on statements that were allegedly rendered misleading by the omission of certain sensitivity analyses regarding its drug, roxadustat.

In their complaint, the plaintiffs alleged that these sensitivity analyses were first disclosed at a Food and Drug Administration advisory committee meeting held on July 15, 2021, causing the July 16 stock drop. But with extensive analyst reports, documents and expert testimony, FibroGen proved by the preponderance of the evidence that the sensitivity analyses were fully disclosed two days earlier on July 13, and therefore could not have caused the July 16 stock drop. Based on the totality of the evidence, the court narrowed the class period to end on April 6, as opposed to July 15, and substantially slashed the amount of the plaintiffs’ potential damages.

The case is In re FibroGen, Inc. Securities Litigation before the US District Court for the Northern District of California (3:21-cv-02623).

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