facts about which the defendant lied;” i.e., the anti-competitive market and price-

fixing scheme. First Solar, 881 F.3d at 753 (citation and internal quotation marks

3 omitted). The district court erred by ruling plaintiffs did not allege causation for

the losses following these earnings announcements.

B. The district court did not err by ruling that plaintiffs failed to

allege loss causation regarding the November 2016 and January 2017 losses. The

media reports that allegedly formed the basis of the November 2016 losses

consisted of speculation about whether the defendants would be indicted as part of

the Department of Justice’s (DOJ) investigation into price-fixing in the generic

drug market. Because “the market [could not] possibly know” whether defendants

would be indicted, the decrease in Impax’s share price following these media

reports could be attributed only to market speculation about the accuracy of the

media speculation concerning potential criminal liability. Loos, 762 F.3d at 890.

“This type of speculation cannot form the basis of a viable loss causation theory.”

Id.

The SAC also alleged plaintiffs suffered losses in January 2017 following

DOJ’s intervention in a civil suit involving Impax, and after two executives of a

different company entered guilty pleas. However, the SAC also alleged DOJ

intervened in numerous civil actions involving different drugs and manufacturers,

and did not allege that the executives who pleaded guilty were connected to Impax.

Any share-price decrease after these events can be attributed only to market

4 speculation that price-fixing was pervasive in the generic drug industry. See

Apollo Group, 774 F.3d at 608 (concluding a report on the defendant’s “industry as

a whole” did not support loss causation).

2. The district court erred by ruling that plaintiffs failed to allege falsity

regarding defendants’ statements about diclofenac’s past performance and

defendant’s forward-looking earnings projections. A securities-fraud complaint

must “specify each statement alleged to have been misleading [and] the reason or

reasons why the statement is misleading.” 15 U.S.C. § 78u-4(b)(1). Puffery and

statements of opinion will not withstand a Rule 12(b)(6) motion to dismiss. See

Apollo Group, 774 F.3d at 606.

A. Plaintiffs alleged defendant Wilkinson stated during a May 2016

earnings call that “overall price decline [in the first quarter of 2016] was around

10%.” The SAC alleged that this statement was false and misleading because

Impax’s “overall portfolio had experienced price decline of 21%” during that time

period. The SAC also alleged the statement was false and misleading particularly

regarding diclofenac because defendants had suggested diclofenac and one other

generic drug accounted for about fifty percent of the overall price decline. But

because the overall price decline was more than double the amount defendants

stated, the price decline of diclofenac was also more than double the amount

5 defendants stated. We conclude these allegations meet the heightened pleading

standards applicable to plaintiffs’ claims. 15 U.S.C. § 78u-4(b)(1).

B. The district court erred by ruling plaintiffs failed to allege the

forward-looking revenue guidance was made with actual knowledge of falsity.

Pursuant to the PSLRA’s safe harbor, a forward-looking statement is not

actionable if it is “accompanied by meaningful cautionary statements” or if

plaintiffs fail to allege it was “made with actual knowledge . . . that the statement

was false or misleading.” 15 U.S.C. § 78u-5(c)(1). The SAC alleged defendants’

forward-looking revenue guidance issued in February and May 2016 was premised

in part upon false and misleading statements about diclofenac’s past performance,

including statements by Wilkinson. The SAC also alleged Wilkinson approved or

was informed about all significant price changes in generic drugs, was the sole

head of the generic drug business, and repeatedly stressed his “intimate

knowledge” of Impax’s pricing strategy, models, and forecasts. Together, these

allegations sufficiently allege Wilkinson’s statement about diclofenac’s price

decline, discussed above, was made with actual knowledge of its falsity. See In re

Quality Systems, 865 F.3d 1130, 1145, 1149. Consequently, plaintiffs adequately

alleged the forward-looking revenue guidance was made with actual knowledge of

its falsity because Wilkinson “had actual knowledge that [his] non-forward looking

6 statements were false and misleading,” and it “necessarily follows that [he] also

had actual knowledge that [the] forward-looking statements [premised on the non-

forward looking statement] were false or misleading.” Id.

C. The district court did not err by ruling that plaintiffs failed to

allege falsity regarding the remaining statements. Wilkinson’s statements that

Impax had “managed [its] portfolio fairly efficiently,” and had “defended share,”

are non-actionable because they “provide[] nothing concrete upon which

[plaintiffs] could reasonably rely” and cannot be “true or false on an objective

standard.” Apollo Group, 774 F.3d at 606–07. Moreover, that Impax lost market

share does not render the statement that Impax “defended share” false, particularly

because the complaint alleges Impax’s market share stayed constant in the first

quarter of 2016 and had fallen only about 7% at the time Wilkinson made the

statement. At oral argument, plaintiffs urged us to conclude the district court erred

because the statement concerning “defended share” was materially false and

misleading when considered in light of Wilkinson’s complete statement that Impax

“defended share but had to give up a bit of price.” We conclude the SAC does not

meet the exacting standards of Rule 9(b) and the PSLRA with regard to this

statement because, at the time Wilkinson made the statement, Impax’s market

share had decreased only 7% and the full extent of the market share decline was

7 not apparent until after Wilkinson spoke. The SAC failed to allege falsity

regarding defendant Wilkinson’s statement that Impax managed its portfolio

through 2014 and 2015 “without reduction in price,” because the statement is not

rendered false or misleading by a decrease in revenue during one quarter of that

two-year period. Nor did the SAC allege falsity with respect to Wilkinson’s

statement that sales of diclofenac “normalized” in the first quarter of 2016.

Wilkinson acknowledged that revenues were down 35% to 40% in the first quarter

of 2016 compared to the fourth quarter of 2015. We conclude plaintiffs’ argument

that Wilkinson’s statement “concealed the evident increasing trend on price and

volume” fails because the SAC did not specifically allege what defendant

Wilkinson knew of the “trend” at the time he spoke; the SAC instead alleged that

the trend continued after Wilkinson stated sales had “normalized.”

3. The district court did not err by ruling that plaintiffs failed to plead

scienter regarding the allegedly misleading statements about Impax’s acquisition of

budesonide. The PSLRA requires plaintiffs to “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); see also Metzler Inv. GMBH v. Corinthian Colleges,

Inc., 540 F.3d 1049, 1065–66 (9th Cir. 2008) (quoting Ernst & Ernst v.

Hochfelder, 425 U.S. 185, 193 (1976)). “[I]n determining whether the pleaded

8 facts give rise to a ‘strong’ inference of scienter, [a] court must take into account

plausible opposing inferences,” and a complaint will survive a Rule 12(b)(6)

motion to dismiss “only if a reasonable person would deem the inference of

scienter cogent and at least as compelling as any opposing inference one could

draw from the facts alleged.” Tellabs, 551 U.S. at 324.

The SAC alleges that defendants knew budesonide revenues were decreasing

prior to the acquisition, knew that competition for budesonide was set to increase,

and knew that budesonide constituted a large percentage-by-revenue of the

acquisition. We conclude the stronger inference to be drawn from these allegations

is that defendants simply overvalued the acquisition and underestimated the

impacts of future competition. Accordingly, the district court did not err by ruling

plaintiffs failed to plead scienter on this theory of liability.

AFFIRMED IN PART, REVERSED IN PART, REMANDED.

The parties shall bear their own costs.

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