On May 5, 2015, Davis Polk achieved a total victory in a securities litigation filed against its clients Prosensa Holding N.V. (“Prosensa”) and several of Prosensa’s individual officers and directors. The case – captioned Singh v. Schikan, Case No. 14 Civ. 5450, and filed in the U.S. District Court for the Southern District of New York – related to Prosensa’s June 2013 initial public offering. Plaintiffs, claiming violations of Sections 11 and 15 of the Securities Act of 1933, alleged that Prosensa’s Registration Statement omitted material facts concerning Prosensa’s then-ongoing Phase III trial of its lead drug, drisapersen.

Davis Polk filed a motion to dismiss, arguing that Prosensa was under no duty to disclose inferences, conclusions, or characterizations concerning the Phase III trial or to predict its outcome or otherwise offer opinions on its likely success. The motion to dismiss further argued that, because of the disclosed relationship between Prosensa and its former licensing partner GlaxoSmithKline, certain of the alleged omitted facts were not within Prosensa’s knowledge and it therefore had no duty to disclose them.

Judge Naomi Reice Buchwald of the Southern District of New York agreed with Prosensa’s arguments and dismissed the case outright, denying plaintiffs’ request for leave to amend their complaint. In doing so, the court rejected each of plaintiffs’ claims, holding that plaintiffs had failed to allege any actionable material omissions. Judge Buchwald found that defendants were not required to predict negative results and that plaintiffs failed to allege that Prosensa knew or could have known that the Demand III study would not meet its primary endpoint. The court further found that Prosensa had no duty to disclose opinions concerning the then-unknown outcome of the trial, where, as here, all necessary facts were disclosed.

The Davis Polk litigation team included partners Lawrence Portnoy and Edmund Polubinski III (who argued the motion), and associates Stefani L. Johnson, Michelle L. Lesser and Christopher Ramos. The Davis Polk team is based in the New York and Washington DC offices.