Hartman

FACTS AND PROCEDURAL HISTORY

I. The Complaint’s Allegations

The Investors’ Fourth Amended Complaint (“complaint”) alleges violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5. The complaint names as defendants Gilead and some of its top officers (“Officers”).

Taking its allegations as true, the complaint tells the fol- lowing story about Gilead and its marketing practices.

Gilead is a biopharmaceutical company that specializes in developing and marketing treatments for life-threatening dis- eases. One of the company’s commercial products is Viread, an antiretroviral agent used in combination with other drugs to treat HIV.

Gilead’s fortunes, as reflected in its stock price, depended heavily on Viread’s commercial success. Sales of Viread amounted to about 65% of Gilead’s total revenues at all rele- 1 We recount only those facts necessary for understanding the loss cau- sation issue. The complaint, which spans over seventy pages, offers much greater detail. Because we disagree with the district court on the issue, we frequently quote the complaint to demonstrate that the…