MEMORANDUM OPINION & ORDER This is a consolidated class action brought on behalf of purchasers of Defendant Evolus, Inc.’s common stock between February 1, 2019 and July 6, 2020 (the “Class Period”). As alleged in the Amended Class Action Complaint, Evolus is a “medical aesthetics” company. Its only product is an “injectible botulinum neurotoxin” (“BTX”) which is sold under the brand name Jeuveau and used to treat wrinkles. (Am. Cmplt. (Dkt. No. 70) 2) (Id.) Jeuveau competes with BOTOX, a similar product manufactured by Allergan plc. Evolus’s involvement with Jeuveau began in 2013, when it purchased an exclusive license to develop the drug from Daewoong Pharmaceuticals, a South Korean pharmaceutical company. (Id. 3) Allergan has an analogous partnership with Medytox, another South Korean pharmaceutical company, which also produces a BTX product. (Id. 48) On January 25, 2019, Allergan and Medytox filed a complaint with the U.S. International Trade Commission (“ITC”) alleging that a former Medytox employee had misappropriated Medytox’s proprietary BTX strain and manufacturing process and delivered them to Daewoong, which had used these proprietary materials to manufacture Jeuveau. (Id.
6, 8) On July 6, 2020, an ITC administrative law judge issued a Final Initial Determination (“FID”) in which he concluded that Daewoong had in fact misappropriated Medytox’s proprietary materials and used them to manufacture Jeuveau. The ITC administrative law judge recommended a ten-year ban on the importation and marketing of Jeuveau in the United States. (Id. 21) The Amended Complaint alleges that Defendant Evolus, Evolus’s parent company Defendant Alphaeon Corporation,1 and certain of Evolus’s senior officers and directors issued false and misleading statements during the Class Period, “represent[ing] to investors that [Allergan and Medytox's] allegations [in the ITC litigation] had no merit,” and touting Jeuveau’s “proprietary” manufacturing process. (Id. 9) The Amended Complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Securities and Exchange Commission (“SEC”) Rule 10b-5 in connection with Defendants’ public statements during the Class Period. The Amended Complaint also asserts an insider trading claim against Defendant Alphaeon under Section 20A of the Exchange Act in connection with Alphaeon’s sale of Evolus shares on May 20, 2019. (Id.
