NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS SEP 17 2018

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

WAHID TADROS, individually and on No. 16-56904 behalf of all others similarly situated, D.C. No. Plaintiff-Appellant, 3:15-cv-01458-AJB-DHB

v.

MEMORANDUM*

CELLADON CORPORATION; et al.,

Defendants-Appellees.

Appeal from the United States District Court for the Southern District of California Anthony J. Battaglia, District Judge, Presiding

Argued and Submitted August 28, 2018 Pasadena, California

Before: BYBEE and WATFORD, Circuit Judges, and HERNANDEZ,** District Judge.

Wahid Tadros appeals the district court’s order dismissing his class action

securities fraud complaint for failure to adequately plead material

misrepresentation or omission and scienter. We have jurisdiction under 28 U.S.C.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Marco A. Hernandez, United States District Judge for the District of Oregon, sitting by designation. § 1291. We review the district court’s decision de novo. WPP Luxembourg

Gamma Three Sarl v. Spot Runner, Inc., 655 F.3d 1039, 1047 (9th Cir. 2011). We

affirm.

1. Material Misrepresentation or Omission. Plaintiff alleges that

defendants’ statements touting the success of Mydicar were misleading because of

flaws underlying both the study and sensitivity analysis. “[A] statement is

misleading if it would give a reasonable investor the impression of a state of affairs

that differs in a material way from the one that actually exists.” In re Cutera Sec.

Litig., 610 F.3d 1103, 1109 (9th Cir. 2010); see In re Rigel Pharm., Inc. Sec. Litig.,

697 F.3d 869, 877–78 (9th Cir. 2012). In this case, the alleged flaws underlying the

study and the sensitivity analysis were disclosed by defendants in a publicly

accessible journal article published years before Celladon went public. As this

information was already part of the total mix of information available to investors,

defendants’ statements were not misleading. Cf. Heliotrope Gen., Inc. v. Ford

Motor Co., 189 F.3d 971, 976 (9th Cir. 1999) (“Because Ford’s tax strategy was

part of the total mix of information reflected in the price of FHI Preferred Stock at

the time Heliotrope purchased its shares, Heliotrope cannot prove that Ford’s

failure to disclose its tax strategy caused Heliotrope any loss.”).

2. Scienter. Plaintiff alleges that—because of Zsebo’s education and

experience and Celladon’s small size and reliance on Mydicar as its sole product

2 16-56904 candidate—defendants knew about the alleged flaws underlying the clinical trial

and had motive to misrepresent the results. To state a claim for securities fraud,

plaintiff must “state with particularity facts giving rise to a strong inference that the

defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2)(A).

“Scienter can be established by intent, knowledge, or certain levels of

recklessness.” In re VeriFone Holdings, Inc. Sec. Litig., 704 F.3d 694, 702 (9th

Cir. 2012). “[T]he ultimate question is whether the defendant knew his or her

statements were false, or was consciously reckless as to their truth or falsity.” Id.

As the district court found, plaintiff has failed to allege specific facts

demonstrating that defendants acted with the intent to manipulate the clinical trial

or deceive the public. In addition, the purported weaknesses with the trial were

disclosed by defendants, and there is nothing to suggest that Zsebo or her co-

authors, who were prominent physicians, did not believe in the results of the study.

Even viewing plaintiff’s allegations holistically, the inference of scienter in this

case is not as compelling as opposing inferences from the facts alleged. See Tellabs

Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–24 (2007).

AFFIRMED.

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