In re OvaScience Inc. Stockholder Litigation (Lawyers Weekly No. 09-051-17)

1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss SUPERIOR COURT CIVIL ACTION NO. 2015-3087-BLS2 (Consol. with 16-0645) IN RE OVASCIENCE INC. STOCKHOLDER LITIGATION MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS’ MOTION FOR SUMMARY JUDGEMENT This is a putative class action alleging violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 ( the Securities Act). Plaintiffs Westmoreland County Employee Retirement System (Westmoreland), Phillip Hofmann, Carlos Rivas, and Cesar Castellanos are investors who purchased stock in the defendant OvaScience, Inc. (OvaScience).1 They allege that a Prospectus and Prospectus Supplement issued in connection with a secondary offering of OvaScience stock contained false statements and material omissions of fact concerning an experimental fertility treatment that OvaScience was in the process of developing. In addition to suing OvaScience, plaintiffs have also named as defendants certain of the company’s officers and directors as well as the three investment banks who served as the underwriters. The defendants now move for summary judgment against Castellanos, Hofmann, and Rivas (the Individual Plaintiffs). This Court concludes that the Motion must be ALLOWED. 1 Heather Carlson was also a plaintiff in the action. However, on August 1, 2017, the parties filed a joint stipulation voluntarily dismissing her from the action without prejudice. Judgment was entered on the docket pursuant to Mass. R. Civ. P. 58(a) on August 3, 2017. 2 BACKGROUND On January 8, 2015, OvaScience conducted a secondary public stock offering in which it sold 2,645,000 shares at $ 50 per share (the January 8 Offering). J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, and Leerink Partners LLC served as the Underwriters. The offering closed on January 13, 2015, at which point there were over 27 million OvaScience shares outstanding. At various points in 2015, the Individual Plaintiffs made purchases of OvaScience stock through online brokers E*Trade and Capital One Investing. On January 8, 2015, Castellano purchased 350 shares at $ 50.488. He made four more purchases between January 12 and February 3, 2015 for a price per share that ranged from $ 40.0899 up to $ 48.1799. Rivas made seven purchases between March 2015 and August 2015 for a price per share ranging from $ 24.32 to $ 41.49. Hoffman made three purchases between February and April 2015 for a price per share that ranged from $ 31.83 to $ 42.107485. In October 2015, plaintiffs Hofmann and Rivas filed a lawsuit against the defendants; Castellanos filed a separate complaint based on the same allegations five months later, and the two actions were consolidated. In August 2016, Westmoreland intervened as plaintiff in the consolidated actions. After this Court denied a motion to dismiss, discovery proceeded on a bifurcated basis. Phase I of the discovery was limited to […]

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