December 28, 2016
West Virginia Pipe Trades Health & Welfare Fund; Employees' Retirement System of the State of Hawaii; Union Asset Management Holding AG Plaintiffs - Appellants
Medtronic, Inc.; William A. Hawkins; Gary L. Ellis; Richard E, Kuntz; Julie Bearcroft; Richard W. Treharne; Martin Yahiro Defendants-Appellees Thomas A. Zdeblick; J. Kenneth Burkus; Scott D. Boden Defendants
Submitted: October 19, 2016
from United States District Court for the District of
Minnesota - Minneapolis
GRUENDER, BEAM, and SHEPHERD, Circuit Judges.
GRUENDER, Circuit Judge.
Virginia Pipe Trades Health and Welfare Fund, Employees'
Retirement System of the State of Hawaii, and Union Asset
Management Holding AG (collectively, "Appellants")
appeal the grant of summary judgment to Medtronic, Inc. in
their securities fraud class action. The district court
granted summary judgment to Medtronic after determining that
Appellants' claims are time-barred. For the reasons
discussed below, we vacate the summary judgment order and
remand for further proceedings.
are retirement and investment funds who brought a
consolidated class action for securities fraud against
Medtronic and several of its officers and senior managers for
actions related to Medtronic's INFUSE product. INFUSE is
the trade name of rhBMP-2, a bone morphogenetic protein that
causes the body to develop new bone tissue. Medtronic
developed INFUSE as an alternative to bone grafting
procedures, and the FDA approved it for use in lower back
spinal fusion surgeries in 2002. In a traditional autograft
spinal fusion procedure, the vertebrae are fused using a bone
graft taken from the patient's hip bone. In the INFUSE
procedure, the vertebrae are fused using a thimble-shaped
titanium cage containing an INFUSE-soaked collagen sponge.
INFUSE is a key component of Medtronic's multi-billion
dollar spinal segment.
sponsored the FDA clinical trials, and all thirteen of the
resulting articles included authoring physicians who had
financial interests in INFUSE. Pharmaceutical companies
frequently sponsor the medical research of their products.
However, the FDA specifically considered conflicts of
interest during the INFUSE approval process. The FDA approved
INFUSE only for use in lumbar spinal fusion surgeries, some
dental surgeries, and for treating certain shin fractures.
However, up to eighty-five percent of INFUSE use was
off-label. In 2008, the FDA issued a public health
notification associating off-label uses of INFUSE with
life-threatening throat and neck swelling. In 2008, an
unrelated party brought a class action against Medtronic
alleging that it violated securities laws by promoting
off-label use of INFUSE. See Minneapolis
Firefighters' Relief Ass'n v. Medtronic, Inc.,
278 F.R.D. 454, 456 (D. Minn. Dec. 12, 2011). In 2011, the
FDA refused to approve AMPLIFY, a high-strength version of
INFUSE, because of concerns it may cause cancer.
2010, articles in the Milwaukee Journal Sentinel
expressed concern that the doctors authoring the
Medtronic-sponsored INFUSE clinical studies had significant
financial ties to Medtronic and reported test results twice
as favorable as those of independent studies. Letters to the
editor of the Journal of Bone and Joint Surgery
raised questions about the link between INFUSE and retrograde
ejaculation (a condition that causes male sterility). One of
the physicians who authored the INFUSE clinical studies, Dr.
Kenneth Burkus, penned a response denying any link. On May
25, 2011, the Milwaukee Journal Sentinel published
an article stating that Medtronic and doctors with financial
ties to Medtronic were aware of the risk of retrograde
ejaculation but did not disclose it.
same day, Dr. Eugene Carragee, an independent doctor from the
Stanford University School of Medicine, published a clinical
study in The Spine Journal linking INFUSE with a
risk of sterility in men. A commentary on Dr. Carragee's
study by Dr. James Kang of the University of Pittsburgh
School of Medicine noted that the original
Medtronic-sponsored publications did not report any adverse
events despite the incidence of retrograde ejaculation, and
Dr. Kang concluded that the conflict of interest was the only
explanation for the difference between the studies. The
New York Times summarized Dr. Carragee's study
and incorporated a response from one of the authors of a
Medtronic-sponsored study, Dr. Thomas Zdeblick, who implied
that the Carragee study was misleading.
22, 2011, the Senate Finance Committee issued a press release
announcing an investigation into Medtronic and INFUSE. The
press release expressed concern over Medtronic's
undisclosed financial ties with doctors. The next day, the
Wall Street Journal summarized the Committee press
release and reported the amount of royalties Dr. Burkus and
Dr. Zdeblick had received. On June 28, 2011, The Spine
Journal devoted its entire issue to articles concerning
INFUSE and included an article authored by Dr. Carragee that
extensively analyzed the Medtronic-sponsored clinical
studies. Dr. Carragee explained that the studies employed
significantly flawed methodologies and failed to report
adverse events. However, Dr. Carragee specifically refrained
from drawing any conclusion about the doctors' motives.
October 2012, the Senate Finance Committee released its
investigation report on INFUSE. The Committee found that
Medtronic "was heavily involved in drafting, editing,
and shaping the content of medical journal articles authored
by its physician consultants who received significant amounts
of money through royalties and consulting fees from
Medtronic." The Committee also found that Medtronic
employees added language designed to exaggerate the
disadvantages of standard spinal fusion techniques and
recommended against publishing a complete list of adverse
events associated with INFUSE. Finally, the committee found
that Medtronic had attempted to adopt weaker safety rules for
its clinical trials.
filed suit on June 27, 2013 against Medtronic, its officers
and senior managers, and the doctors who authored the
Medtronic-sponsored clinical studies. Appellants alleged a
number of securities laws violations, including making false
statements and employing a scheme to defraud the market. The
district court initially dismissed Appellants' scheme
liability claims against the physician-authors and dismissed
some of the false statement claims against Medtronic.
However, the district court did not dismiss one false
statement claim, the scheme liability claim, or the control
liability claim against Medtronic. The litigation proceeded,
and Medtronic eventually moved for summary judgment on all
claims. The district court granted the motion, holding that
the two-year statute of limitations barred all claims.
only appeal the grant of summary judgment on their scheme
liability claim. In addition to the statute of limitations,
Medtronic argues alternatively that Janus Capital Group,
Inc. v. First Derivative Traders, 564 U.S. 135 (2011),
and Stoneridge Investment Partners, LLC v.
Scientific-Atlanta, Inc., 552 U.S. 148 (2008), bar
Appellants' scheme liability claim as a matter of law
because it attempts to hold Medtronic secondarily liable for
the fraudulent statements of others.
Statute of Limitations
court reviews a grant of summary judgment de novo,
viewing the facts in the light most favorable to the
nonmovant. Harris v. Mortg. Prof'ls, Inc., 781
F.3d 946, 948 (8th Cir. 2015). Summary judgment is
appropriate when "the movant is entitled to judgment as
a matter of law." Id. (quoting Fed.R.Civ.P.
56(a)). "We review the district court's
determination of statute-of-limitations de novo." In
re ADC Telecomms., Inc. Sec. Litig., 409 F.3d 974, 976
(8th Cir. 2005).
10b of the Securities Exchange Act of 1934, 15 U.S.C. §
78j(b), makes illegal the use of a manipulative or deceptive
device in connection with the sale or purchase of a security
by any instrumentality of interstate commerce. 17 C.F.R.
§ 240.10b-5 implements § 10b, see Pub. Pension
Fund Grp. v. KV Pharm. Co., 679 F.3d 972, 980 (8th Cir.
2012), and establishes two kinds of liability: false
statement liability (17 C.F.R. § 240.10b-5(b)) and
scheme liability (17 C.F.R. § 240.10b-5(a), (c)). Scheme
liability concerns the use of "any device, scheme, or
artifice to defraud" and "any act, practice, or
course of business which operates or would operate as a fraud
or deceit upon any person, in connection with the purchase or
sale of any security." 17 C.F.R. § 240.10b-5(a),
(c). 28 U.S.C. § 1658(b) establishes the relevant
statute of limitations:
[A] private right of action that involves a claim of fraud,
deceit, manipulation, or contrivance in contravention of a
regulatory requirement concerning the securities laws, as
defined in section 3(a)(47) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)(47)), may be brought not later than
the earlier of-
(1) 2 years after the discovery of the facts constituting the
(2)5 years after such violation.
as used in this statute encompasses not only those facts the
plaintiff actually knew, but also those facts a reasonably
diligent plaintiff would have known." Merck &
Co., Inc. v. Reynolds, 559 U.S. 633, 648 (2010).
However, mere inquiry notice is not sufficient. See
id. at 651. The following elements comprise a scheme
liability claim under 17 C.F.R. § 240.10b-5(a) and (c):
"the defendant (1) committed a deceptive act (2) with
scienter, (3) that the act affected the market for
securities or was otherwise in connection with their purchase
or sale, and (4) that defendants' actions caused the
plaintiffs' injuries." In re Parmalat Sec.
Litig., 414 F.Supp.2d 428, 432 (S.D.N.Y. 2006). Although
the law is unsettled as to whether all of the scheme
liability elements are "facts constituting the
violation" within the meaning of § 1658(b)(1),
a minimum the commission of a deceptive act and scienter are
"facts constituting the violation." See
Merck, 559 U.S. at 648-49 (quoting 28 U.S.C. §
1658(b)(1)). Accordingly, if Appellants did not discover or
with reasonable diligence would not have discovered the
particular facts constituting the deceptive act and the facts
showing scienter prior to June 27, 2011, the statute of
limitations does not bar Appellants' claim.
Appellants may have had reason to be suspicious of
Medtronic's conduct concerning INFUSE prior to June 27,
2011, we conclude that a reasonably diligent plaintiff would
not have discovered facts sufficient to plead scienter based
on public information existing prior to June 27,
2011. To plead scienter adequately,
"plaintiffs must 'state with particularity facts
giving rise to a strong inference that the defendant acted
with the required state of mind.'" Tellabs, Inc.
v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313
(2007) (quoting 15 U.S.C. § 78u-4(b)(2)). "To
qualify as 'strong' within the intendment of §
21D(b)(2) [of the PSLRA, 15 U.S.C. § 78u-4(b)(2)], . . .
an inference of scienter must be more than merely plausible
or reasonable-it must be cogent and at least as compelling as
any opposing inference of nonfraudulent intent."
Id. The Milwaukee Journal Sentinel articles
in late 2010 described in detail the significant financial
ties between Medtronic and the physician-authors. These
articles also explained that Medtronic-sponsored studies
produced test results twice as favorable as independent
studies and noted that independent doctors attributed
INFUSE's success largely to the positive findings of
Medtronic-affiliated surgeons. However, the December 26, 2010
article explained that "[t]here is no evidence any of
the surgeons who have published articles on BMP-2 received
royalties they did not deserve."
Dr. Kang's commentary on May 25, 2011 characterized the
problem as industry-wide, emphasizing that favorable reported
results are a natural consequence of corporate-sponsored
research generally. However, he emphasized that
corporate-sponsored research is "absolutely needed to
help advance innovation and patient care, " but
independent studies must check corporate-sponsored
research's tendency toward bias. Other articles in
The Spine Journal and the Milwaukee Journal
Sentinel also discussed the concerns with INFUSE as
exemplifying broader problems in the pharmaceutical industry
and the FDA approval process. As a result, on May 25, 2011,
one could reasonably infer that the problems with
Medtronic's studies were not due to fraud but due to the
nature of corporate-sponsored research. Thus, the available
information did not create the strong inference that
Medtronic intended to employ a scheme to defraud the market
by manipulating the clinical studies. That scienter did not
become apparent until October 2012 when the Senate Finance
Committee released its findings that Medtronic had
intentionally edited the studies to omit unfavorable results.
finding to the contrary, the district court emphasized three
conclusions: (1) Dr. Carragee's May 25, 2011 Spine
Journal article and the subsequent news reports were
sufficient to demonstrate scienter because they
"showcase[d] early revelations of Medtronic's drive
to dominate the marketplace with INFUSE;" (2) the
Minneapolis Firefighters litigation provided facts
sufficient to plead scienter; and (3) the October 2012
Committee report fell outside the class period and was not
tied to a drop in Medtronic stock, so it does not bear on the
statute of limitations. We disagree. First, a desire to
dominate the marketplace does not constitute scienter to
perpetrate fraud on the market. Rather, it is a mainstream
corporate goal companies regularly achieve by legitimate
means. That some companies may use fraudulent means to
accomplish that goal does not provide a strong inference that
Medtronic intended to defraud the market. Second, none of the
allegations in the Minneapolis Firefighters
litigation would provide sufficient information to plead
scienter in this case. Minneapolis Firefighters
concerned Medtronic's alleged promotion of off-label
INFUSE use. It did not provide relevant information that
would have allowed Appellants to assert a claim that
Medtronic intentionally perpetrated a scheme to defraud the
market by paying doctors to conceal INFUSE's on-label use
risks. See Minneapolis Firefighters' Relief
Ass'n, 278 F.R.D. at 456. Finally, whether the
Committee report caused any market reaction concerns the
element of loss causation, not scienter. Accordingly, the
content of the report remains relevant to establishing when
Appellants could have first pleaded scienter.
result, because Appellants could not have discovered with
reasonable diligence sufficient information to plead scienter
with the particularity necessary to survive a motion to
dismiss prior to June 27, 2011, Appellants brought their
complaint within the two-year statute of limitations. The
district court did not reach the five-year statute of repose,
and we decline to reach it now in the first instance.
alternative, Medtronic argues that Appellants' scheme
liability claim is barred as a matter of law by Janus
Capital Group, Inc., 564 U.S. 135 (2011), and
Stoneridge Investment Partners, LLC, 552 U.S. 148
(2008). Medtronic initially raised this question in a motion
to dismiss. The district court denied the motion as to this
issue and allowed the scheme liability claim to proceed. The
summary judgment proceedings did not address this argument.
We review the questions of law de novo, taking the
Appellants' pleadings as true for this purpose. See
Schmidt v. Des Moines Pub. Sch., 655 F.3d 811, 815 (8th
Cir. 2011); Frey v. City of Herculaneum, 44 F.3d
667, 671 (8th Cir. 1995).
threshold matter, Appellants contend that the law of the case
doctrine prevents this court from considering this argument.
Appellants' law of the case argument is incorrect. While
the district court rejected Medtronic's Janus
and Stoneridge arguments at the motion to dismiss
stage, this court is not bound by the district court's
determination. "The law of the case doctrine prevents
the relitigation of a settled issue in a case and requires
courts to adhere to decisions made in earlier proceedings . .
. ." United States v. Bartsh, 69 F.3d 864, 866
(8th Cir. 1995). However, the law of the case doctrine
provides that once an appellate court has decided an issue in
a case, the district court cannot revisit that determination
on remand. See In re Raynor, 617 F.3d 1065, 1068
(8th Cir. 2010). It does not stand for the reverse
proposition "that superior courts are bound by the
decisions of inferior courts." Id. It is well
established that this court may affirm on any basis the
record supports. Christiansen v. W. Branch Cmty. Sch.
Dist., 674 F.3d 927, 934 (8th Cir. 2012).
argument involves two related but distinct questions. The
first involves a line of precedent rejecting implied private
causes of action for aiding and abetting a violation of
§ 10b. In Central Bank of Denver, N.A. v. First
Interstate Bank of Denver, N.A., the Supreme Court
refused to extend the text of § 10b to encompass a
private cause of action against actors that aid and abet
other actors' violations of § 10b. 511 U.S. 164, 191
(1994). After Central Bank, Congress passed the
Private Securities Litigation Reform Act, which declined to
create a private cause of action for aiding and abetting and
instead placed the authority to prosecute claims against
aiders and abetters with the Securities and Exchange
Commission. Stoneridge, 552 U.S. at 158.
Janus followed, and the Supreme Court reinforced
Central Bank's rejection of aiding and abetting
liability by holding that a private claim brought under Rule
10b-5 for making false statements may only be brought against
the "person or entity with ultimate authority over the
statement, including its content and whether and how to
communicate it." 564 U.S. at 142. The Court explained:
"Such suits-against entities that contribute
'substantial assistance' to the making of a statement
but do not actually make it-may be brought by the SEC but not
by private parties." Id. at 143 (citation
broader scope of scheme liability under Rule 10b-5(a) and (c)
potentially offers plaintiffs a means to circumvent
Janus-a situation we encountered in Public
Pension Fund Group v. KV Pharmaceutical Co., 679 F.3d
972 (8th Cir. 2012). In that case, investors asserted false
statement claims against a pharmaceutical company for
misrepresenting its compliance with FDA regulations in its
SEC filings. The investors also attempted to assert a scheme
liability claim against two of the pharmaceutical
company's officers, alleging only that the officers had
knowledge of the company's misrepresentations. We
rejected the scheme liability claim, emphasizing that "a
scheme liability claim must be based on conduct beyond
misrepresentations or omissions actionable under Rule
10b-5(b)." Id. at 987. Otherwise, plaintiffs
could simply recast false statement claims barred under
Janus as scheme liability claims. See id.
Without alleging that the officers engaged in conduct beyond
misrepresentations, allegations that the officers simply knew
about the company's misrepresentations were insufficient
to support a scheme liability claim. Id.
Accordingly, a plaintiff cannot support a scheme liability
claim by simply repackaging a fraudulent misrepresentation as
a scheme to defraud. Rather, a plaintiff must allege some
deceptive act other than the fraudulent misrepresentation.
coming to this conclusion, this court relied on two cases
from our sister circuits. KV Pharm. Co., 679 F.3d at
987. These cases provide good examples of the kinds of scheme
liability claims that do not allege separate deceptive
conduct. In WPP Luxembourg Gamma Three Sarl v. Spot
Runner, Inc., the Ninth Circuit explained that the
plaintiff had not alleged facts separate from those of its
Rule 10b-5(b) omission claim because "[t]he fraudulent
scheme allegedly involved the Defendant-Appellees planning
together to not disclose the Founders' sale of securities
in the secondary offering, and then not disclosing those
sales; fundamentally, this is an omission claim." 655
F.3d 1039, 1058 (9th Cir. 2011). The Ninth Circuit
distinguished a Massachusetts case where the defendant
allegedly worked to boost the company's market price
through activities other than omissions in investor reports.
Id. (citing Swack v. Credit Suisse First
Boston, 383 F.Supp.2d 223, 237 (D. Mass. 2004)).
Likewise, in Lentell v. Merrill Lynch & Co., the
Second Circuit rejected a scheme liability claim where the
only market-manipulating conduct alleged was making a number
of misrepresentations. 396 F.3d 161, 177 (2d Cir. 2005).
District courts relying on KV Pharmaceutical have
likewise adhered to this distinction in evaluating scheme
liability claims. See, e.g., Cotter v.
Gwyn, 2016 WL 4479510 at *7-8 (E.D. La. Aug. 25, 2016)
(sustaining a scheme liability claim where plaintiff alleged
that defendant company approved and facilitated
self-interested transactions in addition to failing to report
them); In re Smith Barney Transfer Agent Litig., 884
F.Supp.2d 152, 161 (S.D.N.Y. 2012) (sustaining a scheme
liability claim where plaintiff alleged that defendants not
only misleadingly disclosed fees but also channeled cost
savings away from the mutual fund to which they properly
belonged); William L. Thorp Revocable Trust v. Ameritas
Inv. Corp., 57 F.Supp.3d 508, 527 (E.D. N.C. 2014)
(rejecting a scheme liability claim where the only alleged
deceptive acts were the oral misrepresentations of an
investment agent to his client).
Appellants allege conduct beyond mere misrepresentations or
omissions actionable under Rule 10b-5(b). Appellants'
scheme liability claim alleges that Medtronic shaped the
content of medical journals by "pa[ying] physicians . .
. to induce their complicity in concealing adverse events and
side effects associated with the use of INFUSE and
overstating the disadvantages of alternative bone graft
procedures." Although the scheme liability claim also
includes allegations that Medtronic edited language in the
clinical studies that the physicians ultimately published,
the act of paying physicians to induce their complicity is
the allegation at the heart of the scheme liability claim.
Paying someone else to make a misrepresentation is not itself
a misrepresentation. Thus, Appellants do not merely repackage
allegations of misrepresentation as allegations of a
scheme. Janus and KV
Pharmaceuticals require some conduct other than a
misrepresentation to support a scheme liability claim. They
do not hold that the alleged scheme can never involve any
misrepresentation in order for the scheme liability claim to
survive. See, e.g., In re Smith Barney, 884
F.Supp.2d at 161 (sustaining scheme liability claim where
alleged conduct included but was not limited to misleadingly
disclosing fees). Accordingly, because Medtronic's
alleged deceptive conduct goes beyond mere misrepresentations
or omissions, Janus does not bar Appellants'
scheme liability claim.
second part of Medtronic's argument concerns whether
Appellants have sufficiently pleaded that the market relied
on Medtronic's conduct as a matter of law. In
Stoneridge, Charter Communications and its suppliers
engaged in sham transactions designed to enable Charter to
falsify its financial statements. 552 U.S. at 152-55.
Investors sued the suppliers, asserting both a false
statement claim and a scheme liability claim. While the
investors argued that the suppliers' participation in the
sham transactions enabled Charter to falsify its statements,
the Supreme Court held that the investors could not
demonstrate that they relied on the suppliers' conduct.
Id. at 159. "Reliance by the plaintiff upon the
defendant's deceptive acts is an essential element of the
§ 10(b) private cause of action. It ensures that, for
liability to arise, the 'requisite causal connection
between a defendant's misrepresentation and a
plaintiff's injury' exists as a predicate for
liability." Id. (quoting Basic Inc. v.
Levinson, 485 U.S. 224, 243 (1988)). The Court rejected
the false statements claim, concluding that the causal
connection between the suppliers and the falsified financial
statements was too attenuated to support a finding of market
reliance where the suppliers' conduct did not satisfy any
presumption of reliance and the investing public did not have
knowledge of the suppliers' deceptive acts. Id.
Court also rejected the scheme liability claim, emphasizing
that "this [scheme liability] approach does not answer
the objection that petitioner did not in fact rely upon
respondents' own deceptive conduct." Id. at
160. Since Charter filed the fraudulent financial statements,
the suppliers did not make a misrepresentation that the
public relied on. The suppliers' participation in sham
transactions did not reach the public and "nothing
respondents did made it necessary or inevitable for Charter
to record the transactions as it did." Id. As a
result, the causal link between the false financial
statements and the suppliers' conduct was too remote to
demonstrate reliance. Id. at 161. Instead, the Court
determined that allowing the scheme liability claim against
the suppliers would "revive in substance the implied
cause of action against all aiders and abettors except those
who committed no deceptive act in the process of facilitating
the fraud." Id. at 162-63. As a result, under
Stoneridge, a plaintiff asserting a scheme liability
claim must demonstrate that the causal connection between the
defendants' alleged deceptive act and the information on
which the market relied is not too remote to support a
finding of reliance.
the conduct at issue in Stoneridge, the causal
connection between Medtronic's alleged deceptive conduct
and the information on which the market relied is not too
remote to support a finding of reliance. Medtronic's
alleged deceptive conduct consists of manipulating the
clinical trials by paying the physician-authors to conceal
adverse effects and to overstate the disadvantages of
alternative procedures. Appellants alleged in their complaint
that investors directly relied on the resulting favorable
clinical trials. Indeed, according to the
Appellants' amended complaint, in speaking with potential
investors, Medtronic's CEO specifically emphasized that
the company's products' strong clinical trial
performance undergirded Medtronic's competitiveness and
sustainability. As a result, taking the allegations as true,
Medtronic's deceptive conduct directly caused the
production of the information on which the market relied.
Unlike the suppliers' conduct in Stoneridge,
Medtronic's purported conduct would not merely assist or
enable the physician-authors to deceive the market. Rather,
Medtronic's alleged conduct would deceive the market with
the assistance of the physician-authors. A company cannot
instruct individuals to take a certain action, pay to induce
them to do it, and then claim any causal connection is too
remote when they follow through. In this way, Medtronic's
alleged manipulative conduct directly caused the biased
clinical trial results that the market relied upon. This
alleged causal connection is sufficient to support a finding
of reliance. Thus, Stoneridge's concern about
resurrecting private aiding and abetting claims does not
arise here. Accordingly, we decline to adopt Medtronic's
alternate ground for affirmance.
reasons discussed above, we vacate summary judgment and
remand for proceedings not inconsistent with this opinion.
In Merck & Co., Inc. v.
Reynolds, the Supreme Court specifically left unresolved
whether facts concerning a plaintiff's reliance, loss,
and loss causation are among the facts constituting the
violation that must be discovered in order for the statute of
limitations to begin to run. 559 U.S. at 649.
Accordingly, we need not resolve
whether any elements other than the commission of a deceptive
act and scienter are facts constituting the
Notably, the Appellants did not assert
a false statement claim based on the clinical trials.