NOT FOR PUBLICATION                      FILED
                        UNITED STATES COURT OF APPEALS                     FEB 15 2018
                                                                       MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS
                                 FOR THE NINTH CIRCUIT

In re: ARROWHEAD RESEARCH                         No.   16-56499
CORPORATION SECURITIES
LITIGATION,                                       D.C. No.
                                                  2:14-cv-07890-CBM-AS

------------------------------
                                                  MEMORANDUM *
NOELLE M. STROGOFF, Lead Plaintiff,
individually and on behalf of all other
persons similarly situated and on behalf of
Strogoff Family Trust U/D/T; CHRISTIAN
STOUT; JULIA STOUT,

                   Plaintiffs-Appellants,

  v.

ARROWHEAD RESEARCH
CORPORATION; CHRISTOPHER R.
ANZALONE; BRUCE D. GIVEN;
KENNETH A. MYSZKOWSKI; CHARLES
P. MCKENNEY; DAVID L. LEWIS,

                   Defendants-Appellees.

                      Appeal from the United States District Court
                          for the Central District of California
                     Consuelo B. Marshall, District Judge, Presiding



       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                           Submitted February 13, 2018**
                             San Francisco, California

Before: HAWKINS and TALLMAN, Circuit Judges, and JACK,*** District Judge.

      Plaintiffs appeal the district court’s dismissal of their securities fraud claims

under Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b),

and Securities and Exchange Commission Rule 10b–5, 17 C.F.R. § 240.10b–5,

against Arrowhead Pharmaceuticals, Inc. and other named defendants (collectively

“Arrowhead”). We have jurisdiction under 28 U.S.C. § 1291. We review de novo

dismissals for failure to state a claim, In re Rigel Pharm., Inc. Sec. Litig., 

, 875 (9th Cir. 2012) (citing Zucco Partners, LLC v. Digimarc Corp., 

, 989 (9th Cir. 2009)), and the denial of a motion for reconsideration for abuse

of discretion, Kerr v. Jewell, 

, 1053 (9th Cir. 2016) (citing

McQuillion v. Duncan, 

, 1014 (9th Cir. 2003)).

      In 2014, Arrowhead was in the process of developing a cure for hepatitis B,

which involved multiple rounds of animal and human testing. Plaintiffs allege that

Arrowhead’s management made misleading statements in an August 12, 2014,

financial results conference call that caused stock prices to rise and then fall. The



      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
            The Honorable Janis Graham Jack, United States District Judge for
the Southern District of Texas, sitting by designation.

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district court dismissed the Section 10(b) and Rule 10b–5 claims on the grounds

that the complaint failed to sufficiently allege a false or misleading statement or

omission and scienter. It also denied Plaintiffs’ motion for reconsideration. We

affirm.

      1. To state a claim for securities fraud, Plaintiffs must plead with

particularity that Arrowhead’s statements (a) were “untrue” or (b) included a

material omission that made the statements affirmatively misleading. 

. Here, Arrowhead’s statements regarding the preliminary results of its

human testing were cabined by cautionary language, included accurate

comparisons to past studies, were qualified, and often were made as forward-

looking statements about future knockdown goals. See 

; see

also In re Cutera Sec. Litig., 

, 1108 (9th Cir. 2010) (“Forward-

looking statements . . . are further insulated from liability.”). Accordingly, we

affirm the district court’s dismissal because Plaintiffs failed to adequately plead

any untrue or misleading statements and because Arrowhead’s forward-looking

statements are otherwise protected.

      2. To adequately plead scienter, a securities fraud “complaint must ‘state

with particularity facts giving rise to a strong inference that the defendant acted

with the required state of mind.’” 

(quoting 15 U.S.C. § 78u-

4(b)(2)). “A complaint will survive a motion to dismiss ‘only if a reasonable


                                           3
person would deem the inference of scienter cogent and at least as compelling as

any opposing inference one could draw from the facts alleged.’” 

(quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 

, 324 (2007)).

Here, Arrowhead made factually true statements and Plaintiffs allege no additional

facts, such as a stock selloff or resignation, supporting an inference of scienter.

Therefore, Plaintiffs failed to articulate an inference of scienter that is “at least as

compelling as any opposing inference of nonfraudulent intent.” 

.

      3. “[A] motion for reconsideration should not be granted, absent highly

unusual circumstances, unless the district court is presented with newly discovered

evidence, committed clear error, or if there is an intervening change in the

controlling law.” Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 

, 880 (9th Cir. 2009) (quoting 389 Orange St. Partners v. Arnold, 

, 665 (9th Cir. 1999)). Plaintiffs allege that the district court “failed to

consider material facts” because they believe that Arrowhead’s statements “were

inconsistent, ambiguous and confusing.” We hold that the district court did not

abuse its discretion because Arrowhead’s statements, which the district court

adequately considered, were consistent and not misleading.

      Costs are awarded to Appellees.

      AFFIRMED.


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