On June 25, 2009, the Second Circuit Court of Appeals affirmed the dismissal of a securities fraud class action lawsuit against Davis Polk & Wardwell LLP client AstraZeneca PLC and two of its former directors arising out of the clinical development of Exanta. The plaintiffs alleged that the defendants intentionally misled investors regarding Exanta clinical trials and the likelihood of approval of the Exanta new drug application in the U.S. The plaintiffs purported to assert claims on behalf of purchasers of AstraZeneca publicly traded securities – in the New York, London and Stockholm stock markets – during the period April 2003 to September 2004 under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. Davis Polk filed a motion to dismiss the action, and the district court granted the motion on June 3, 2008. Plaintiffs appealed and the Second Circuit heard oral argument on June 4, 2009.

The district court dismissed the case on June 3, 2008, and the Second Circuit has now affirmed that judgment. The court of appeals agreed with the district court that “plaintiffs have not alleged anything to negate the idea that defendants were attempting to develop a drug they thought on the whole to be beneficial and were so describing it to the public,” and found that “[w]hile the evidence gathered during the class period did suggest certain risks associated with the drug, the defendants’ public statements identified these concerns.”

The Davis Polk team who worked on the case included partners Arthur F. Golden and Joel M. Cohen (who argued the case at the district court and the Second Circuit), associates Daniel S. Kahn, Michael J. Garofola, Sasha E. Polonsky, David A. Stier, Una A. Dean and Alex Reisen, summer associates Daniel J. Ray and Sabrina L. Ursaner and legal assistant Lana L. Ciaramella. All Davis Polk team members are based in the New York office.