Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—1st Cir.: No, really: omissions about drug trial weren’t actionable ‘half-truths’, (Aug 20, 2026)

By Anne Sherry, J.D.

The appeals court and the district court saw eye-to-eye on the plaintiffs’ omissions theory.

The First Circuit affirmed a district court’s dismissal of a fraud case involving the drug Syfovre. Contrary to the plaintiffs’ assertions that statements about Syfovre trials were half-truths rendered misleading by omissions, the challenged statements could not plausibly be viewed as materially misleading. The appeals court affirmed on that basis without reaching the issue of scienter (In re Apellis Pharmaceuticals, Inc. Securities Litigation, No. 25-1383 (1st Cir. Aug. 19, 2026)).

Syfovre (pegcetacoplan) is an eye injection to slow the progression of geographic atrophy, a form of age-related macular degeneration that can lead to blindness. Following Apellis Pharmaceuticals' commercialization and distribution of Syfovre as an FDA-approved treatment for geographic atrophy, the company learned that some patients receiving the treatment developed retinal vasculitis, an inflammation of the vessels of the retina that can cause significant vision loss. Apellis’s stock price dropped.

The plaintiffs alleged that earlier, class-period statements touting the absence of retinal vasculitis among trial participants were false because the defendants didn’t expressly acknowledge that the trials were not designed to detect retinal vasculitis. The plaintiffs also alleged that the defendants were concerned about the possibility of pegcetacoplan injections causing retinal vasculitis as a side effect.

The district court ruled that neither of the alleged omissions made the challenged statements misleading. The defendants’ failure to state how frequently Apellis tested for retinal vasculitis was not actionable because the frequency of testing under the protocols was fully disclosed to investors in public statements well before the defendants made the challenged statements. And the failure to state that Apellis’s testing protocols weren’t adequate to detect retinal vasculitis was not actionable because it was rooted only in a disagreement about the adequacy of the scientific methodology employed in the studies, which under prevailing law cannot give rise to a securities fraud claim.

On appeal, the plaintiffs argued that the district court misunderstood their misrepresentation theory: that the challenged statements were literally true but amounted to misleading half-truths due to the omissions.

The circuit court reiterated, however, that the challenged statements were not actionable half-truths. There was no omission of “critical qualifying information” (quoting Macquarie Infrastucture Corp. v. Moab Partners, L.P., 601 U.S. 257, 263 (2024)). The defendants’ disclosures meant that investors had full and complete disclosure of when the testing protocol would be applied to trial participants. Unlike the two First Circuit cases on which the plaintiffs relied, there were no contradictions or undisclosed facts.

“The trial protocols were public and followed, the tests used in the studies would detect retinal vasculitis, and no retinal vasculitis was detected in any study participant. Because everything disclosed was accurate and no ‘critical qualifying information’ was withheld, the district court properly dismissed the complaint,” the court wrote.

The case is No. 25-1383.

Judge: Aframe, S.

Attorneys: Alan Ellman (Robbins Geller Rudman & Dowd LLP) for Ray Peleckas. Raymond J. DiCamillo (Richards, Layton & Finger, PA) for Apellis Pharmaceuticals, Inc.

Companies: Apellis Pharmaceuticals, Inc.

MainStory: TopStory FedTracker Securities FraudManipulation GCNNews MaineNews MassachusettsNews NewHampshireNews PuertoRicoNews RhodeIslandNews