Thant v. Karyopharm Therapeutics Inc.

United States Court of Appeals
For the First Circuit

No. 21-1657

MYO THANT, Individually and on Behalf of All Others Similarly
Situated,

Plaintiff, Appellant,

HEATHER MEHDI,

Plaintiff,

v.

KARYOPHARM THERAPEUTICS INC.; MICHAEL G. KAUFFMAN; SHARON
SHACHAM; JUSTIN A. RENZ; MICHAEL F. FALVEY; GAREN G. BOHLIN,
MIKAEL DOLSTEN; SCOTT GARLAND; BARRY E. GREENE; MANSOOR RAZA
MIRZA; DEEPA R. PAKIANATHAN; KENNETH E. WEG,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

Barron, Chief Judge,
Gelpí, Circuit Judge,
and Katzmann, Judge.

Adam M. Apton, with whom Nicholas I. Porritt, Shannon L.

 Of the United States Court of International Trade, sitting
by designation.
Hopkins and Levi & Korsinksy, LLP, were on brief, for appellant.
Michael G. Bongiorno, with whom Peter A. Spaeth, Allyson
Slater, Jocelyn M. Keider, Joseph M. Levy, and Wilmer Cutler
Pickering Hale and Dorr LLP were on brief, for appellees.

August 5, 2022
 KATZMANN, Judge. Following a decline in the stock price

of Karyopharm Therapeutics, Inc., investors (among them,

plaintiff-appellant Dr. Myo Thant) filed suit against the company

and its corporate officers (together "Karyopharm" or "defendants")

alleging securities fraud in violation of Sections 10(b) and 20(a)

of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b) and

78t(a), and Securities and Exchange Commission ("SEC") Rule 10b-

5, 18 C.F.R. § 240.10b-5. In relevant part, the complaint alleged

that Karyopharm materially misled investors as to the safety and

efficacy of Karyopharm's cancer-fighting drug candidate selinexor.

The district court dismissed the complaint, finding that

plaintiffs failed to adequately plead scienter with respect to

defendants' statements about the STORM1 trial: a single-arm study

of the drug selinexor as a treatment for penta-refractory multiple

myeloma. Plaintiff-appellant Thant timely appealed.

We now affirm the district court's dismissal on

different grounds, concluding that Thant has not plausibly alleged

an actionable statement or omission with respect to the STORM trial

disclosures.

I.

The complaint alleges the following. See Clorox Co.

P.R. v. Proctor & Gamble Com. Co., 228 F.3d 24, 30 (1st Cir. 2000)

1 "Selinexor Treatment of Refractory Myeloma."

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(noting that in reviewing a motion to dismiss, we accept all well-

pleaded facts in the complaint as true). Karyopharm is a

Massachusetts-based biopharmaceutical company that develops and

commercializes treatments for cancer, among other serious

diseases. One of the drugs in Karyopharm's portfolio is selinexor,

a cancer-fighting drug now on the market as a fifth-line treatment

(in combination with the steroid dexamethasone) for patients

suffering from relapsed or refractory multiple myeloma and acute

myeloid leukemia. In laymen's terms, a relapsed or refractory

disease is one which has not been eradicated despite treatment, or

which has returned at least once following initially successful

treatment.

Roughly a decade ago, Karyopharm began conducting

clinical tests on selinexor to evaluate its safety and efficacy as

a treatment for advanced cancers. The first such test was the Phase

1 KCP-330-001 trial, which treated patients with multiple myeloma

who had received at least three prior lines of treatment or therapy

without success. The results of this trial were mixed. Patients

in the monotherapy arm (treated with selinexor alone) largely saw

no improvement in their disease, with only one of fifty-six

patients experiencing a "partial response" -- in other words, a

decrease in the extent of the patient's cancer. Patients in the

combination therapy arm (treated with a combination of selinexor

and dexamethasone) had somewhat more positive outcomes, with 8.6%

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of patients experiencing a partial response or full remission.

Overall, most patients participating in the trial experienced

stable or progressive disease. Importantly for the purposes of

this case, data from the KCP-330-001 trial evinced a substantial

level of toxicity attributable to selinexor.

Phase 2 testing of selinexor began in June 2014 with the

SOPRA2 trial, which treated patients with relapsed or refractory

acute myeloid leukemia ("AML") aged sixty or above who were

ineligible for standard chemotherapy or transplantation. The

SOPRA trial was ultimately terminated before its completion on

March 2, 2017 after "Karyopharm 'claimed at that time that it had

determined, in concert with SOPRA's Independent Data Safety

Monitoring Board, . . . that the study would not reach statistical

significance for showing . . . the study's primary endpoint,'"

namely, the superiority of selinexor alone as a treatment for AML.

Indeed, the data obtained prior to SOPRA's termination showed a

comparatively lower overall survival rate for patients treated

with selinexor alone versus those receiving standard care (some

combination of supportive care, azacitidine, decitabine, and low

dose cytosine arabinoside).3 As with the KCP-330-001 trial,

2 "Selinexor in Older Patients with Relapsed/Refractory AML."
3 Azacitidine (also known by the brand name Vidaza) and
decitabine (also known by the brand name Dacogen) are cytotoxic
drugs which function by altering gene expression to reduce
the growth of cancerous cells. PubChem, Decitabine,

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SOPRA's initial results also evinced substantial toxicity: 100% of

the patients treated with selinexor suffered from adverse events

("AEs") of varying degrees, including some which resulted in death.

After the start of the SOPRA trial (but before its

termination) Karyopharm initiated Phase 2b testing with the STORM

trial, which was conducted between May 2015 and April 2018. STORM

assessed the safety and efficacy of combination treatment with

selinexor and dexamethasone in patients with relapsed or

refractory myeloma who had received at least three prior lines of

treatment or therapy. Unlike SOPRA, the STORM trial was a single-

arm study, i.e., one without a control group. Ultimately, STORM

resulted in a roughly 25% response rate, but again clearly

demonstrated the toxicity of the selinexor dosage administered.

In relevant part, 88.6% of patients modified their selinexor dose

due to a treatment emergent adverse event ("TEAE") -- the name

given to any AE that is not present prior to the initiation of

https://pubchem.ncbi.nlm.nih.gov/compound/Decitabine (last
visited Aug. 3, 2022); PubChem, Azacitidine,
https://pubchem.ncbi.nlm.nih.gov/compound/azacitidine (last
visited Aug. 3, 2022); Science Direct, Antineoplastic Drugs,
https://www.sciencedirect.com/topics/neuroscience/antineoplastic
-drugs (last visited Aug. 3, 2022).
Cytosine arabinoside is another cytotoxic drug which, while
largely fatal as an intensive treatment, has been determined to
induce remission in hematologic cancers when administered in low
doses. Science Direct, Cytarabine,
https://www.sciencedirect.com/topics/neuroscience/cytarabine
(last visited Aug. 3, 2022).

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treatment, or that worsens in intensity or frequency following

treatment, regardless of cause. Some TEAEs were even fatal, with

the study involving eighteen TEAE-related deaths (as well as

twenty-two from disease progression).

Roughly a year before the conclusion of the STORM trial,

Karyopharm initiated another clinical trial of selinexor: the

Phase 3 BOSTON trial, which measured the efficacy of combination

treatment with selinexor, dexamethasone, and bortezomib (a

chemotherapy drug also known as Velcade) against treatment with

dexamethasone and bortezomib alone.4 Unlike the STORM study, the

BOSTON trial was intended to allow evaluation of selinexor in

comparison to a control group.

On August 5, 2018, following the conclusion of the STORM

trial but prior to the end of the BOSTON trial, Karyopharm

submitted a New Drug Application ("NDA") for selinexor to the U.S.

Food and Drug Administration ("FDA"). Shortly thereafter, on

November 20, 2018, the FDA convened a post mid-cycle review meeting

with Karyopharm to discuss outstanding issues that could impact

selinexor's approval -- most notably the FDA's concern that the

STORM study alone, as a single-arm trial, might not be adequate to

4 To manage the toxicity of the control drugs, dexamethasone
and bortezomib, and better assess the toxicity of selinexor, the
study also reduced the dosage of dexamethasone and bortezomib in
the selinexor arm by 25% and 40% respectively.

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demonstrate selinexor's safety or efficacy vis-à-vis other

available treatments.

Subsequently, the FDA arranged for a meeting of its

Oncologic Drug Advisory Committee ("ODAC") to take place on

February 26, 2019, for an advisory vote on the selinexor NDA. On

February 22, 2019, in anticipation of the ODAC meeting, the FDA

publicly released a briefing document addressing the results of

the STORM study and the merits of the NDA broadly. In relevant

part, this briefing document highlighted three primary issues with

the submitted study data: first, that the single-arm nature of the

STORM trial could not provide conclusive data regarding the

efficacy of selinexor; second, that the single-arm nature of the

STORM trial could not provide conclusive data regarding the

toxicity of selinexor; and finally, that while the STORM trial

indicated that lower doses of selinexor were better-tolerated, it

did not conclusively establish an optimal dose. In response to

the briefing document, Karyopharm's stock price fell from a closing

price of $8.97 per share on February 21, 2019, to a closing price

of $5.07 per share on February 22. ODAC ultimately voted to delay

approval of selinexor pending the results of the BOSTON trial,

which caused the stock price to decline further to a low of $4.13

per share on February 28, 2019.

On March 13, 2019, Karyopharm submitted an amendment to

its selinexor NDA which proposed to limit the drug's indication to

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relapsed or refractory multiple myeloma who had received four,

rather than three, prior lines of treatment or therapy -- a

population for which there was at the time no approved therapy.

Following this amendment and the subsequent submission of the

BOSTON trial data, the FDA approved the selinexor NDA on July 2,

2019, roughly eleven months after its initial submission.

II.

Two months after the FDA's approval of the selinexor

NDA, on September 17, 2019, the initial complaint in this action

was filed before the district court. Following the appointment of

Dr. Myo Thant ("Thant") as lead plaintiff, the operative complaint

was filed on October 22, 2020.

Plaintiff-appellant Thant is a Maryland resident who

purchased and retained Karyopharm securities between March 2,

2017, and February 22, 2019. Given the substantial drop in

Karyopharm's stock price following the release of the ODAC briefing

document in February of 2019, Thant alleges that he and the class

of similarly situated investors were harmed by their purchases of

Karyopharm stock at prices that were artificially inflated by

Karyopharm's materially misleading statements and omissions

regarding the safety and efficacy of selinexor.5 While in his

5As stated above, Thant alleges violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§
78j(b) and 78t(a), which prohibit the use of manipulative or

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complaint, Thant challenged numerous statements concerning all of

the clinical trials described, he limits his appeal to Karyopharm's

STORM-related statements.

Thant takes issue with Karyopharm's public statements

regarding the STORM trial, which he argues were both materially

misleading and made with scienter. He points first to the April

30, 2018 press release announcing top-line data from the second

half of the STORM trial, which stated in relevant part that:

Oral selinexor demonstrated a predictable and
manageable tolerability profile, with safety
results that were consistent with those
previously reported from Part I of this study
. . . and from other selinexor studies. As
anticipated, the most common [AEs] were
nausea, vomiting, fatigue and reduced appetite
and were primarily low grade and manageable
with standard supportive care and/or dose
modification.

Thant also highlights statements made to investors by Karyopharm

co-founder and CEO Dr. Michael G. Kauffman ("Kauffman") on a May

1, 2018 conference call. Specifically, Thant points to Kauffman's

statement that "[t]he success of the STORM study is an important

deceptive devices and extend liability to individuals, and
Securities and Exchange Commission ("SEC") Rule 10b-5, 18 C.F.R.
§ 240.10b-5, which likewise prohibits the use of manipulative and
deceptive devices. While Thant's complaint before the district
court also alleged violations of §§ 11 and 15 of the Securities
Act of 1933, 15 U.S.C. §§ 77k, 77o, those allegations are not at
issue on appeal. The only allegations currently before the court
are Thant's Sections 10(b) and 20(a) and Rule 10b-5 claims stemming
from Karyopharm's public statements concerning the STORM trial.

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milestone for Karyopharm[, a]nd these data represent a significant

step in establishing the efficacy and safety of selinexor as a new

treatment option for patients with myeloma."6 Thant argues that

each of these disclosures "falsely represented to the public" that

selinexor trials had consistently yielded positive data, when in

fact selinexor "was extremely toxic, not well tolerated, and

ineffective." In so representing, Thant contends, Karyopharm

artificially inflated its stock price.

To support his allegations, Thant relies not only on the

STORM study data itself, but also on a purported history of

concealment on the part of Karyopharm executives. The complaint

alleges that in August 2016, almost two years before the start of

the class period, two high-ranking Karyopharm employees discovered

that 353 AEs relating to selinexor (and in part arising from the

SOPRA study) had been recorded in Karyopharm's internal records

without being reported to the necessary regulatory agencies. Upon

6 The complaint also notes Kauffman's statement that:
This duration of response in the PR group is -- even at
this early date, it's already associated with
statistically significant improvement in overall
survival as compared to the patients who had stable
disease or worse. So we do know that patients staying on
the drug who have a response will live longer than those
that are -- unfortunately do not respond to the
drug . . . .
As Thant advances no distinct argument regarding this portion
of the press release on appeal, any potential argument is
waived.

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discovering the omission of these AEs, one of these employees --

Karyopharm's Global Head of Pharmacovigilance and Drug Safety,

referred to as "Former Employee 1" or "FE1" -- convened a meeting

with Kauffman and other Karyopharm executives. At the meeting,

FE1 conveyed that each unreported event would need to undergo a

lengthy medical review, and that conducting such review in-house

would unfortunately preclude submission of selinexor's NDA by the

planned deadline of January 2017. FE1 proposed, as an alternative,

that an external clinical research organization be engaged to

review the unreported events at the cost of $200,000–$300,000.

Kauffman, upset by the delay and cost, insisted that review could

be done in-house in time for the January 2017 deadline. FE1

strongly disagreed, and ultimately quit following the meeting.

Shortly after FE1's departure, he was contacted by

Karyopharm's Medical Director of Safety ("FE2") who claimed that

Ran Frenkel ("Frenkel"), Karyopharm's Chief Development Officer,

was pressuring FE2 to falsify study data by characterizing various

AEs as unrelated to selinexor. FE2 further indicated that Frenkel

identified Dr. Sharon Shacham ("Shacham"), Karyopharm's co-

founder, president, and Chief Scientific Officer, as the source of

the falsification pressure. FE1 recommended that FE2 carefully

record her concerns and report Karyopharm's practices to the FDA.

In January of 2017, two FDA criminal investigators came

to FE1's home to ask questions about whether Karyopharm was

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falsifying adverse event reports to "jack up the price of the

stock." FE1 conveyed to the investigators that Karyopharm was

"completely out of compliance" during his tenure, and that FE1 had

been concerned that the FDA "would put us on a clinical hold" due

to lack of internal controls.

Indeed, as FE1 had predicted, the FDA issued a partial

clinical hold on Karyopharm's existing selinexor trials on March

3, 2017, thereby temporarily suspending the ongoing STORM trial.

The hold was issued over concerns that Karyopharm had incompletely

or erroneously reported study data, including the AEs associated

with selinexor. Ultimately, following corrective action by

Karyopharm, the clinical hold was fully lifted on April 5, 2017.

Thant also recounts two additional former employee

allegations regarding events which took place after the conclusion

of the STORM trial (and the start of the class period) in April

2018. FE3 was a consulting physician assisting with the selinexor

NDA who was tasked with reviewing and confirming field medical

investigators' reports of selinexor AEs. FE3 indicated that

Karyopharm's Vice President of Pharmacovigilence, Kumiko Yanase

("Yanase"), regularly questioned FE3's reports and on two

occasions asked him to revise his determination that an AE was

related to selinexor -- requests he refused. FE4, a clinical

research scientist who was employed by Karyopharm following the

submission of the selinexor NDA, further reported that

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Karyopharm's submissions to the FDA were missing information

regarding "preceding" AEs. For example, the data would indicate

that a patient experienced sepsis without noting the presence of

a prior, less severe infection. Upon reporting this apparent

omission to her supervisor, Maitreyi Sharma ("Sharma"), FE4 was

informed that Sharma did not agree with FE4's analysis and was

concerned that earlier-stage AEs would be treated as separate AEs

by the FDA.

III.

Ruling on Karyopharm's motion to dismiss for failure to

state a claim, the district court found Karyopharm's statement

that "selinexor demonstrated a predictable and manageable

tolerability profile," made while highlighting the prevalence of

low-grade AEs and omitting the high instance of TEAEs and TEAE-

related deaths, indeed constituted an arguably incomplete

disclosure. Likewise, the district court concluded that

Kauffman's description of STORM as successful, and "an important

milestone for Karyopharm," likely "skewed" the data such that it

"present[ed] a rosy picture" to investors. Accordingly, the court

indicated that Thant had plausibly alleged the existence of

materially misleading statements.

Nevertheless, the district court found that Thant failed

to adequately plead scienter. Noting that the Private Securities

Litigation Reform Act of 1995, Pub. L. No. 104–67, 109 Stat. 737

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("PSLRA") requires a plaintiff to "state with particularity facts

giving rise to a strong inference" of scienter -- i.e., that "the

defendant acted with 'either conscious intent to defraud

[investors] or a high degree of recklessness,'" – the court

concluded that Thant had not pleaded facts supporting such a strong

inference. In re Karyopharm Therapeutics Inc., Sec. Litig., 552 F.

Supp. 3d 77, 90 (D. Mass. 2021) (alteration in original) (quoting

ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 58 (1st Cir.

2008)). In so finding, the district court highlighted Karyopharm's

argument that "no reasonable investor would interpret their

statement that selinexor's safety profile was 'predictable' or

'manageable' to mean the drug was benign," in the context of its

treatment of a "very ill patient cohort." The district court

further concluded that Karyopharm's voluntary disclosure of the

2017 clinical hold, as well as the "high risk of failure" of

selinexor (largely due to the risk of side effects), counseled

against a finding of scienter. Finally, the district court found

that none of the former employee allegations evinced "a desire of

defendants to mislead investors" -- and indeed, neither of the

accounts relating to events during the class period allege any

contact with those Karyopharm officials responsible for the

allegedly misleading statements.

Thant now appeals the dismissal of his complaint,

arguing that the district court erred by determining Karyopharm's

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public statements regarding the STORM trial were not made knowingly

or with deliberate recklessness. Karyopharm contends that the

district court did not err with respect to scienter and further

requests on appeal that the court find the contested statements

"were not materially false or misleading in the first instance."

IV.

We review de novo whether the complaint meets the

heightened pleading requirements of the PSLRA. ACA Fin. Guar.

Corp., 512 F.3d at 58 (citing Aldridge v. A.T. Cross Corp., 284

F.3d 72, 78 (1st Cir. 2002)). Those requirements necessitate that,

to state a claim for fraud under Section 10(b) of the Securities

Exchange Act of 1934, a complaint must adequately plead "(1) a

material misrepresentation or omission; (2) scienter; (3) a

connection with the purchase or sale of a security; (4) reliance;

(5) economic loss; and (6) loss causation." In re Biogen Inc.

Sec. Litig., 857 F.3d 34, 41 (1st Cir. 2017). Only two of these

six requirements are now before the court: material

misrepresentation and scienter. We conclude that, regardless of

whether Thant adequately pleaded facts to support a finding of

scienter, he failed to plausibly allege a material

misrepresentation sufficient to sustain his complaint.

Accordingly, we affirm.

Where, as here, our review is de novo, we are permitted

to "affirm on any ground appearing in the record -- including one

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that the [district] judge did not rely on." Rivera-Colón v. AT&T

Mobility P.R., Inc., 913 F.3d 200, 207 (1st Cir. 2019) (alteration

in original) (quoting Lang v. Wal-Mart Stores E., L.P., 813 F.3d

447, 454 (1st Cir. 2016)). This is what Karyopharm now suggests

we do, arguing that because "the market could not have

misinterpreted [Karyopharm's] statements," Karyopharm "had no duty

to disclose [the AE] data, even if [investors] would have wanted

to know that information and even if it could have been deemed

material," because disclosure is only required where it is

necessary to ensure statements are not misleading.

To survive a motion to dismiss under the securities law,

a complaint must adequately plead statements that were "misleading

as to a material fact" -- neither factor alone is sufficient.

Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 38 (2011)

(quoting Basic Inc. v. Levinson, 485 U.S. 224, 238 (1988)). With

respect to materiality, it is well established that the requirement

is satisfied when there is "a substantial likelihood that the

disclosure of the omitted fact would have been viewed by the

reasonable investor as having significantly altered the 'total

mix' of information made available." Id. at 38 (quoting Basic,

485 U.S. at 231–32); see also Ponsa-Rabell v. Santander Sec. LLC,

35 F.4th 26, 33 (1st Cir. 2022). It follows that "[i]t is not a

material omission to fail to point out information of which the

market is already aware." Baron v. Smith, 380 F.3d 49, 57 (1st

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Cir. 2004) (citing In re Donald Trump Casino Sec. Litig., 7 F.3d

357, 377 (3d Cir. 1993)).

Even where the materiality requirement is met, a

statement or omission must still be misleading. Disclosure of

specific information is only required when "necessary 'to

make . . . statements made, in the light of the circumstances

under which they were made, not misleading.'" Matrixx, 563 U.S. at

44 (alteration in original) (quoting 17 C.F.R. § 240.10b–5(b))).

This means that, if a company proactively discloses some facts

about its product, it is not thereby obliged to disclose all

information that "would be interesting" to potential investors.

Backman v. Polaroid Corp., 910 F.2d 10, 16 (1st Cir. 1990) (en

banc). Rather, a company must only disclose those facts "that are

needed so that what [has been] revealed would not be 'so incomplete

as to mislead.'" Id. (quoting SEC v. Tex. Gulf Sulphur Co., 401

F.2d 833, 862 (2d Cir. 1968)).

Finally, we have clearly held that "'upbeat statements

of optimism and puffing about [a] company's prospects' are not

actionable" and thus cannot constitute material misstatements.

Yan v. ReWalk Robotics Ltd., 973 F.3d 22, 32 (1st Cir. 2020)

(alteration in original)(quoting Greebel v. FTP Software, Inc.,

194 F.3d 185, 207 (1st Cir. 1999)). Such non-actionable statements

have included assertions by a robotics company that its device was

"a 'breakthrough product,' with 'compelling clinical data'

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'demonstrat[ing] the functionality and utilization' of the

device," id. at 28 (alteration in original); statements by a

software company that it would "lead the market in providing

applications and support" and that its "new products have been

well received by [its] channel partners and customers," Greebel,

194 F.3d at 190; and statements by a design company that its

software was likely "to broaden the number of customers in existing

accounts as well as attract new customers," Glassman v.

Computervision Corp., 90 F.3d 617, 635 (1st Cir. 1996); among

others.

We find that the contested statements are not materially

misleading. Beginning with Thant's allegations regarding the May

1, 2018 conference call, we conclude that defendants' statements

were non-actionable puffery. Kauffman's assertions that the

results of the STORM study constitute "an important milestone for

Karyopharm" and represent "a significant step in establishing the

efficacy and safety of selinexor as a new treatment option for

patients with myeloma," are no more actionable misstatements than

claims made by the defendant in Yan v. ReWalk Robotics Ltd., 973

F.3d 22 (1st Cir. 2020), that its high-risk robotic exoskeleton

constituted a scientific "breakthrough" supported by "compelling

clinical data." 973 F.3d at 28. Such vague optimism about a

product's future, even when touting "successful" or "compelling"

clinical support, cannot constitute a material misstatement for

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purposes of the pleading requirements set by the PSLRA. We thus

conclude that Thant has failed to allege a materially misleading

statement sufficient to survive a motion to dismiss with respect

to the May 1, 2018 conference call.

Proceeding to the April 30, 2018 press release, we agree

with defendants (and indeed with the district court) that "no

reasonable investor would interpret [Karyopharm's] statement that

selinexor's safety profile was 'predictable' and 'manageable' to

mean the drug was benign." In re Karyopharm, 552 F. Supp. 3d at

90–91. Accordingly, we conclude that the STORM press release was

likewise not materially misleading.

As a threshold matter, we note that Thant's claim (both

before the district court and on appeal) is that the April 30,

2018 press release was materially misleading because it omitted

known information regarding the serious risks of selinexor

treatment. Specifically, Thant notes that

when [Karyopharm] represented that "selinexor
demonstrated a predictable and manageable tolerability
profile" and that "nausea, vomiting, fatigue and reduced
appetite" were the most common adverse events, [it]
already knew that "100% of the enrolled patients
experienced [AEs], nearly 60% experienced a severe [AE],
more than 25% of patients permanently discontinued the
drug due to its side effects and approximately 18 on-
study deaths were attributed to it."

He argues that sharing this information with investors would have

"significantly altered the 'total mix' of information . . .

available" such that its omission was materially misleading.

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Matrixx, 563 U.S. at 38 (quoting Basic, 485 U.S. at 231–32). Thant

does not claim that the information provided regarding the "most

common AEs" was itself materially misleading, nor does he claim

that knowledge of additional common AEs would also have

significantly altered the information available to investors.

Thus, there is no argument before us that omission or misstatement

of the "most common" AEs rendered the STORM press release

materially misleading.7

To evaluate whether Karyopharm's omission of data

regarding the prevalence and severity of AEs was materially

misleading, we begin with the context of the STORM trial.

Selinexor was undergoing clinical testing primarily as a treatment

for relapsed or refractory multiple myeloma, a disease which

Karyopharm explicitly acknowledged in public filings typically

results in "nearly all patients . . . eventually relaps[ing] and

We note that, while the press release states that "the most
7

common [AEs] were nausea, vomiting, fatigue and reduced appetite"
and "[t]he most common hematologic AEs were Grade ≥3 cytopenias"
this appears to diverge from the data presented elsewhere. The
ODAC briefing document indicates that the most common AEs included
not only fatigue (79.7% of patients), nausea (69.9% of patients),
and reduced appetite (53.7% of patients), but also hematologic AEs
thrombocytopenia (71.5% of patients) and anemia (65.9% of
patients). In any case, Thant does not contend that Karyopharm's
account of the most common selinexor AEs was materially misleading.
We thus conclude that because Thant did not make any specific
allegations as to why the omission of AEs more common than those
listed would materially mislead investors, any claim predicated on
the "most common AEs" portion of the STORM press release should be
dismissed.

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succumb[ing] to their disease." Not only that, but the latter

half of the STORM trial specifically focused on treatment of

"heavily pretreated patients with penta-refractory myeloma" --

i.e., patients whose cancer had continued to progress despite

extensive and varied treatment and who were ultimately left with

no other medical options. It is hardly surprising, then, that the

"positive top-line data" announced in Karyopharm's STORM press

release reflects a median response duration of only 4.4 months in

those patients for whom selinexor was effective. These disclosures

are ample evidence that the patients participating in the STORM

trial were, as Thant himself notes, "very sick patients" pursuing

their "last chance" for survival.

Likewise, Karyopharm proactively and regularly informed

investors, through Form 10-Ks issued both before and during the

class period, that treatment with selinexor had resulted in

"serious" AEs in at least a "small percentage" of patients. The

10-Ks filed in March of 2016, 2017, and 2018, each clarify that

such serious AEs are those which "result in death, are life

threatening, require hospitalization or prolonging of

hospitalization, or cause a significant and permanent disruption

of normal life functions." Each report further states that "as a

result of these adverse events or further safety or toxicity issues

. . . we may not receive approval to market any drug candidates."

Finally, Karyopharm notes in each 10-K that "[t]he FDA . . . may

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disagree with our or our clinical trial investigators'

interpretation of data from clinical trials and the conclusion by

us or our clinical trial investigators that a serious adverse

effect or unacceptable side effect was not drug-related."

Because it is "not a material omission to fail to point

out information of which the market is already aware," Thant has

not plausibly alleged a material omission with respect to the STORM

press release. Baron, 380 F.3d at 57. Any investor reading that

selinexor demonstrated a "predictable and manageable tolerability

profile, with safety results that were consistent with those

previously reported" had also been informed that (1) the STORM

trial administered selinexor to severely ill patients facing a

real risk of death from multiple myeloma; (2) selinexor had

consistently precipitated serious AEs in at least a "small

percentage" of patients treated across prior studies; and (3) any

assessment by Karyopharm regarding the prevalence or acceptability

of serious AEs was in no way a guarantee that the FDA would have

a similar view of the safety profile of selinexor. Given this

background information, it is difficult to imagine that any

investor would read the defendants' statements that Karyopharm had

a "predictable," "manageable," and "consistent" tolerability

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profile to indicate that selinexor was benign, or that the FDA

would find it so.

Even if Thant had plausibly alleged a material omission

with respect to the April 30, 2018 press release, he has not

alleged that such omission was misleading. He argues, citing In

re Ariad Pharms., Inc. Sec. Litig., 842 F.3d 744 (1st Cir. 2016),

that it was "'misleading for [Karyopharm] to express optimism'

about the STORM-related data 'after learning [about selinexor's

toxicity].'" However, this case is not Ariad.

In Ariad, the eponymous pharmaceutical company submitted

a proposed label for its candidate drug ponatinib to the FDA.

Despite that label being rejected, and ARIAD being directly

informed by the FDA the rejection was due to "inadequate safety

disclosures" regarding the risk of severe cardiovascular events,

ARIAD's executives publicly "express[ed] optimism about

ponatinib's chances for approval with a 'favorable label.'" Ariad,

842 F.3d at 753. At the same time as it elided the FDA's outright

rejection of the proposed label, ARIAD publicly identified

"pancreatitis as 'the most prevalent' serious adverse event

(occurring in 5% of patients) and noted 'low rates of

cardiovascular issues'" in patients taking ponatinib. Id. In

reality the most prevalent serious AEs were cardiovascular,

occurring in 8% of patients. Id. It is undoubtedly misleading for

a pharmaceutical company to, as ARIAD did, fail to disclose

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material communications with the FDA and overtly mischaracterize

the prevalence of [AEs].

Here, on the other hand, Karyopharm neither failed to

disclose FDA concerns nor falsely omitted selinexor's most-

prevalent risks. While the press release indicated that Karyopharm

was in communication with the FDA, it expressly noted that "there

can be no guarantee that . . . any feedback from regulatory

authorities will ultimately lead to the approval of selinexor."

Similarly, Karyopharm proactively couched its optimism regarding

the forthcoming NDA by noting that "accelerated approval," as it

was seeking for selinexor, "carries a high regulatory threshold."

In addition, there is no indication that Karyopharm

mischaracterized the STORM data by stating that "nausea, vomiting,

fatigue and reduced appetite" were the "most common adverse

events," without mention of specific serious AEs. Rather, the

FDA's independent evaluation of the STORM data seems to bear out

Karyopharm's statement, indicating that the most common non-

hematologic AEs (fatigue, nausea, appetite loss, weight loss, and

various digestive issues) occurred in a minimum of 37.4% of

patients, while the most common serious AE (pneumonia) occurred in

only 11.4% of patients.

Although investors may have been interested in the

specific serious AEs experienced by STORM trial participants, we

have conclusively established that a company is not, by virtue of

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making some disclosures about its products, obligated to disclose

all potentially interesting information. Backman, 910 F.2d at 16.

While Thant may have wished to know more about the total landscape

of AEs associated with selinexor, that alone is not enough to

render Karyopharm's disclosures materially misleading. Nor does

Karyopharm's decision not to include data on the prevalence of

serious AEs in its STORM press release rise to the level the

misstatements and omissions in Ariad.

Given that Thant has thus not plausibly alleged a

material misstatement with respect to the May 1, 2018 conference

call or the April 30, 2018 press release, his associated Section

10(b) claim must be dismissed. Likewise, he has not alleged a

materially misleading statement sufficient to sustain a claim

pursuant to SEC Rule 10b-5. With the dismissal of his Section

10(b) claim, Thant's Section 20(a) claim necessarily fails as well,

because he has not stated an underlying violation of the Securities

Exchange Act of 1934. See In re Biogen, 857 F.3d at 44–45 (citing

ACA Fin. Guar. Corp., 512 F.3d at 67–68). Having determined that

dismissal is appropriate, we need not examine Thant's arguments

with respect to scienter.

CONCLUSION

For the foregoing reasons, the district court's

dismissal of Thant's second amended complaint for failure to state

a claim is affirmed.

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