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29 March 20213 minute read

DLA Piper represents Axogen in dismissal of amended securities class action lawsuit

DLA Piper represented Axogen, Inc. in the dismissal with prejudice of an amended securities class action lawsuit filed in the US District Court for the Middle District of Florida by a proposed class of investors who claimed Axogen lied about the size of the market for its nerve graft products.

In April 2020, US District Judge Tom Barber had granted the defendants’ motion to dismiss all of the plaintiffs’ initial claims under both the Securities Act of 1933 and the Securities Exchange Act of 1934, finding that the statements in question were forward-looking and therefore protected under the Private Securities Litigation Reform Act (PSLRA).

The plaintiffs then filed an amended complaint, alleging that the yearly estimates of nerve injuries used to calculate Axogen’s market estimate referred to “present existing conditions” that removed the statements from the PSLRA safe harbor. In its March 19 order granting Axogen’s motion to dismiss the amended complaint, the court disagreed, finding that the number of injuries occurring each year reflected “an ongoing state of affairs extending from the present into the future.” The court also agreed with DLA Piper’s argument that the statements were non-actionable opinions.

Finally, the court held that the plaintiffs failed to allege facts supporting the “strong inference” of scienter required by the PSLRA.

The DLA Piper team representing Axogen included partner Caryn Schechtman (New York) and associates Marc Silverman (New York) and Elan Gershoni (Miami).