Cassava Scis. v. Bredt

1

CASSAVA SCIENCES, INC., Plaintiff, v. DAVID BREDT, et al., Defendants.

No. 1:22-cv-9409-GHW

United States District Court, S.D. New York

March 28, 2024

MEMORANDUM OPINION & ORDER

GREGORY H. WOODS, United States District Judge:

I. INTRODUCTION

Cassava Sciences, Inc. (“Cassava”) is a biotechnology company that is conducting clinical trials for an Alzheimer's drug called simufilam. Following the second phase of the simufilam clinical trials, multiple short sellers, most of them scientists, published concerns about the integrity of the clinical trials and other studies related to simufilam. They sent letters to the Food and Drug Administration (the “FDA”) that painstakingly analyzed published results, data, and methodology, published presentations aimed at investors that summarized the letters and analyzed Cassava's public representations, and posted hundreds of tweets, which were, by their nature, much less rigorous.

Cassava vigorously disagreed with the concerns expressed by the short sellers. Members of the scientific community in Cassava's position have a variety of options. They can publish a thorough, factually supported rebuttal. They can facilitate replication of their results by a neutral, unaffiliated lab. They can invite the scientists expressing concerns to review their unpublished underlying data. Here, Cassava is pursuing another approach: a lawsuit against the people who have critiqued its scientific findings.

Three groups of defendants moved to dismiss the complaint. Magistrate Judge Ona Wang issued three report and recommendations recommending dismissal of all of Plaintiff's claims. Dkt. Nos. 104 (the “First R&R”), 105 (the “Second R&R”), 110 (the “Third R&R'). Because the Court finds that the majority of the defendants' statements were protected under the First Amendment as statements of opinion or scientific debate, and that the fraction of statements that were adequately alleged to be defamatory were not published with actual malice, it dismisses Plaintiff's claims against all of the defendants.

II. BACKGROUND

A. Cassava

The Court refers to the First, Second, and Third R&Rs for a comprehensive description of the facts of the case but will summarize the facts and procedural history relevant to this opinion. Plaintiff is a publicly traded biotechnology company with two “biopharmaceutical assets” in development. Dkt. No. 30 (“Complaint”) ¶¶ 2, 37. One is an Alzheimer's drug called simufilam, for which it is currently conducting clinical trials. Id. ¶ 2. Plaintiff claims that simufilam improves brain function by targeting a protein called filamin A. Id. ¶ 11. Plaintiff has been developing simufilam for “over a decade at a cost of over $100,000,000.” Id. ¶ 3. Some of Plaintiff's executives have made “material” investments in Plaintiff's stock. Id. ¶ 356. Plaintiff's other product is a diagnostic test called SavaDX, which Plaintiff claims can “detect the presence of Alzheimer's disease from a small sample of blood.” Id. ¶ 37.

For the past decade, Plaintiff has conducted “basic research, in vitro studies, and preclinical studies” supporting the safety and efficacy of simufilam, and an “industry poster” about simufilam. Id. ¶¶ 64, 149. That research was published in academic journals, and at least some of it was submitted to the FDA to gain approval to conduct clinical trials. Id. ¶ 64.

Plaintiff gained FDA approval for phase 1 clinical trials for simufilam in 2017. Id. ¶ 64.^[1]After completing the phase 1 trials, it proceeded with two independent phase 2 studies (the “Phase 2a Study” and “Phase 2b Study”). Plaintiff completed its Phase 2a Study in 2019 and commenced its Phase 2b Study the following year. Id. ¶¶ 68, 71.^[2]

In May 2020, Plaintiff announced that an “outside lab” unaffiliated with Plaintiff had conducted an analysis of its Phase 2b Study data and discovered “unnaturally high variability and other problems.” Id. ¶ 73. Plaintiff “concluded that the data from this initial bioanalysis was anomalous and highly improbable.... [and] served no useful purpose.” Id. It sent those data to another lab-which it does not allege was “outside” or unaffiliated with Plaintiff-for reanalysis. Id. Plaintiff announced the results of the reanalysis in late 2020. Id. ¶ 74. According to Plaintiff, the reanalysis showed, among other things, that simufilam improved brain function in Alzheimer's patients. Id. In late 2021, Plaintiff progressed to the third stage of the clinical trials. Id. ¶ 74.^[3]

In parallel with the clinical trials, Plaintiff also conducted a “long-term, open label” study (the “Open Label Study”), with the objectives of monitoring safety and tolerability of simufilam over time, in addition to monitoring changes in patients' cognition and biomarkers associated with Alzheimer's. Id. ¶ 97. It published multiple sets of results for the Open Label Study throughout 2021. Id. ¶¶ 98-104. According to Plaintiff, the results showed, among other things, that simufilam improved cognition in Alzheimer's patients and was safe and well-tolerated. Id. ¶¶ 98-107.

B. Letters to the FDA

In August 2021, two neuroscientists named David Bredt and Geoffrey Pitt (the “Neuroscientist Defendants”) sent a letter and report (the “Citizen Petition”) to the FDA expressing “grave concerns about the quality and integrity of the laboratory-based studies” of simufilam, including the Phase 2b study reanalysis. Dkt. No. 30-5 (“Pet.”) at 3.^[4] According to Plaintiff, the Neuroscientist Defendants sent the Citizen Petition after securing short positions in Plaintiff's stock. Complaint ¶ 120. In the Citizen Petition, the Neuroscientist Defendants described “anomalies” in research published by Plaintiff, including its clinical trial results, as well as in research by Dr. Lindsay Burns and Dr. Hoau-Yan Wang, who they claimed to have authored many of the studies underlying Plaintiff's claims about the link between filamin A and Alzheimer's. Complaint ¶ 120; Pet. at 4.^[5]Over a nearly 40-page report, the Neuroscientist Defendants provided detailed critiques of the methodologies and figures included in those studies. See Pet. They asserted that the alleged anomalies suggested possible data manipulation and challenged the suitability of methodologies employed in the studies and the validity of the inferences the authors drew from the studies. Id.

They concluded that the FDA should strongly consider halting Plaintiff's clinical trials and “complet[ing] a rigorous audit” of Plaintiff's research. Pet. at 5. Like all letters to FDA, the Citizen Petition was posted on a federal government webpage. Complaint ¶ 122. The Neuroscientist Defendants also authorized their lawyer to publish a press release hyperlinking to the letter. Id. ¶ 123.

In the following months, the Neuroscientist Defendants sent four supplemental letters and reports to the FDA expanding on their concerns and reasoning. Dkt. Nos. 30-6, 30-7, 30-11, 30-13 (together, with the Citizen Petition, the “Neuroscientist FDA Letters”). Those letters also contained critiques of the methodologies and figures included in published studies. See Dkt. Nos. 30-6, 30-7, 30-11, 30-13.^[6]

Plaintiff responded to the Neuroscientist FDA Letters with a series of press releases defending the integrity and validity of the challenged research and denouncing the claims in the letters. See, e.g., Dkt. No 35-3. Some of the subsequent Neuroscientist FDA Letters responded to the claims in Plaintiff's press releases and observed that since the publication of the Citizen Petition, other scientists had raised similar concerns about the research surrounding simufilam. See, e.g., Dkt. No. 30-13 at 2, 10. The letters also included hyperlinks to some of those critiques. See, e.g., Dkt. No. 30-11 at 4.

In October 2021, another group of scientists, Adrian Heilbut, Jesse Brodkin, Enea Milioris, and Patrick Markey^[7] (together, the “Dot Com Defendants”) registered the domain names cassavafraud.com and simuflimflam.com. Complaint ¶ 131-132. According to Plaintiff, the Dot Com Defendants also held short positions in Plaintiff's stock. Id ¶ 132. Shortly after registering the domain names, the Dot Com Defendants sent their own letter to the FDA (the “Dot Com FDA Letter”) (together, with the Neuroscientist FDA Letters, the “FDA Letters”). Id. ¶ 133; Dkt. No. 30-8. The Dot Com FDA Letter raised the same “grave concerns” as the Neuroscientist FDA Letters. See Dot Com FDA Letter at 1. Like the Neuroscientist FDA Letters, the Dot Com FDA Letter contained detailed analysis of published data, results, methodology, and figures in studies by Plaintiff, Dr. Wang, and Dr. Burns, and thoroughly described the reasoning for the scientists' concerns. See Dot Com FDA Letter. It also posed dozens of questions to Plaintiff arising from that analysis. See id. The Dot Com Defendants posted the letter to cassavafraud.com and simuflimflam.com. Complaint ¶¶ 133, 135.

According to Plaintiff, the FDA Letters triggered scientific journals that had published the challenged research to conduct “independent investigations” of those studies. Complaint ¶ 371. Plaintiff alleges that “[e]ach journal, of course, concluded there was no evidence (or no compelling evidence) of the manipulation that Defendants claimed occurred.” Id. Plaintiff also alleges that other scientists disagreed with the FDA Letters in tweets and blog posts. Complaint ¶¶ 362-364.

C. Slide Decks

Days after publishing the Dot Com FDA Letter, the Dot Com Defendants posted a slide deck to their websites called “Cassava Sciences: A Shambolic Charade.” Id. ¶ 136; Dkt. No. 30-9 (the “Shambolic Charade Deck”). Drawing on publicly available information and analyses, including the FDA Letters, analyses on a website called PubPeer,^[8] news articles, and Plaintiff's...