Cassava Scis. v. Bredt

Full title: CASSAVA SCIENCES, INC., Plaintiff, v. DAVID BREDT, et al., Defendants.

Court: United States District Court, S.D. New York

Date published: Mar 28, 2024

1:22-cv-9409-GHW (S.D.N.Y. Mar. 28, 2024)

Opinion

1:22-cv-9409-GHW

03-28-2024

CASSAVA SCIENCES, INC., Plaintiff, v. DAVID BREDT, et al., Defendants.

GREGORY H. WOODS, United States District Judge:

MEMORANDUM OPINION & ORDER

GREGORY H. WOODS, United States District Judge:

I. INTRODUCTION

Cassava Sciences, Inc. (“Cassava”) is a biotechnology company that is conducting clinical trials for an Alzheimer's drug called simufilam. Following the second phase of the simufilam clinical trials, multiple short sellers, most of them scientists, published concerns about the integrity of the clinical trials and other studies related to simufilam. They sent letters to the Food and Drug Administration (the “FDA”) that painstakingly analyzed published results, data, and methodology, published presentations aimed at investors that summarized the letters and analyzed Cassava's public representations, and posted hundreds of tweets, which were, by their nature, much less rigorous.

Cassava vigorously disagreed with the concerns expressed by the short sellers. Members of the scientific community in Cassava's position have a variety of options. They can publish a thorough, factually supported rebuttal. They can facilitate replication of their results by a neutral, unaffiliated lab. They can invite the scientists expressing concerns to review their unpublished underlying data. Here, Cassava is pursuing another approach: a lawsuit against the people who have critiqued its scientific findings.

Three groups of defendants moved to dismiss the complaint. Magistrate Judge Ona Wang issued three report and recommendations recommending dismissal of all of Plaintiff's claims. Dkt. Nos. 104 (the “First R&R”), 105 (the “Second R&R”), 110 (the “Third R&R'). Because the Court finds that the majority of the defendants' statements were protected under the First Amendment as statements of opinion or scientific debate, and that the fraction of statements that were adequately alleged to be defamatory were not published with actual malice, it dismisses Plaintiff's claims against all of the defendants.

II. BACKGROUND

A. Cassava

The Court refers to the First, Second, and Third R&Rs for a comprehensive description of the facts of the case but will summarize the facts and procedural history relevant to this opinion. Plaintiff is a publicly traded biotechnology company with two “biopharmaceutical assets” in development. Dkt. No. 30 (“Complaint”) ¶¶ 2, 37. One is an Alzheimer's drug called simufilam, for which it is currently conducting clinical trials. Id. ¶ 2. Plaintiff claims that simufilam improves brain function by targeting a protein called filamin A. Id. ¶ 11. Plaintiff has been developing simufilam for “over a decade at a cost of over $100,000,000.” Id. ¶ 3. Some of Plaintiff's executives have made “material” investments in Plaintiff's stock. Id. ¶ 356. Plaintiff's other product is a diagnostic test called SavaDX, which Plaintiff claims can “detect the presence of Alzheimer's disease from a small sample of blood.” Id. ¶ 37.

For the past decade, Plaintiff has conducted “basic research, in vitro studies, and preclinical studies” supporting the safety and efficacy of simufilam, and an “industry poster” about simufilam. Id. ¶¶ 64, 149. That research was published in academic journals, and at least some of it was submitted to the FDA to gain approval to conduct clinical trials. Id. ¶ 64.

Plaintiff gained FDA approval for phase 1 clinical trials for simufilam in 2017. Id. ¶ 64.¹After completing the phase 1 trials, it proceeded with two independent phase 2 studies (the “Phase 2a Study” and “Phase 2b Study”). Plaintiff completed its Phase 2a Study in 2019 and commenced its Phase 2b Study the following year. Id. ¶¶ 68, 71.²

1 According to the Complaint, “[t]he primary purpose of [phase 1] clinical studies is to assess the metabolism, pharmacologic action, tolerability and safety of a drug candidate.” Id. ¶ 56.

2 Phase 2 trials “involve studies in disease-affected patients to determine the proper dose required to produce the desired benefits. At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and safety risks are identified, and a preliminary evaluation of efficacy may be observed.” Id. ¶ 57.

In May 2020, Plaintiff announced that an “outside lab” unaffiliated with Plaintiff had conducted an analysis of its Phase 2b Study data and discovered “unnaturally high variability and other problems.” Id. ¶ 73. Plaintiff “concluded that the data from this initial bioanalysis was anomalous and highly improbable.... [and] served no useful purpose.” Id. It sent those data to another lab-which it does not allege was “outside” or unaffiliated with Plaintiff-for reanalysis. Id. Plaintiff announced the results of the reanalysis in late 2020. Id. ¶ 74. According to Plaintiff, the reanalysis showed, among other things, that simufilam improved brain function in Alzheimer's patients. Id. In late 2021, Plaintiff progressed to the third stage of the clinical trials. Id. ¶ 74.³

3 Phase 3 trials “are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use, and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product approval.” Id. ¶ 58.

In parallel with the clinical trials, Plaintiff also conducted a “long-term, open label” study (the “Open Label Study”), with the objectives of monitoring safety and tolerability of simufilam over time, in addition to monitoring changes in patients' cognition and biomarkers associated with Alzheimer's. Id. ¶ 97. It published multiple sets of results for the Open Label Study throughout 2021. Id. ¶¶ 98-104. According to Plaintiff, the results showed, among other things, that simufilam improved cognition in Alzheimer's patients and was safe and well-tolerated. Id. ¶¶ 98-107.

B. Letters to the FDA

In August 2021, two neuroscientists named David Bredt and Geoffrey Pitt (the “Neuroscientist Defendants”) sent a letter and report (the “Citizen Petition”) to the FDA expressing “grave concerns about the quality and integrity of the laboratory-based studies” of simufilam, including the Phase 2b study reanalysis. Dkt. No. 30-5 (“Pet.”) at 3.⁴ According to Plaintiff, the Neuroscientist Defendants sent the Citizen Petition after securing short positions in Plaintiff's stock. Complaint ¶ 120. In the Citizen Petition, the Neuroscientist Defendants described “anomalies” in research published by Plaintiff, including its clinical trial results, as well as in research by Dr. Lindsay Burns and Dr. Hoau-Yan Wang, who they claimed to have authored many of the studies underlying Plaintiff's claims about the link between filamin A and Alzheimer's. Complaint ¶ 120; Pet. at 4.⁵Over a nearly 40-page report, the Neuroscientist Defendants provided detailed critiques of the methodologies and figures included in those studies. See Pet. They asserted that the alleged anomalies suggested possible data manipulation and challenged the suitability of methodologies employed in the studies and the validity of the inferences the authors drew from the studies. Id.

4 The Neuroscientist Defendants sent the letters anonymously through their attorney, Jordan Thomas. Mr. Thomas is not a party to this action.

5 Though the Complaint repeatedly accuses Defendants of making defamatory statements about Dr. Wang and Dr. Burns, it does not allege facts about either scientist's affiliation with Cassava or the connection between their research and the development of simufilam. Cassava's 2021 Form 10-k, which it attached to the Complaint as Exhibit 20, identifies Dr. Burns as Cassava's Senior Vice President of Neuroscience. Dkt. No. 30-22 at 14. In the Citizen Petition, the Neuroscientist Defendants identified Dr. Burns as Plaintiff's academic collaborator. Pet. at 4. The Court does not accept these facts as true for the purposes of this motion but includes them in this summary for context.

They concluded that the FDA should strongly consider halting Plaintiff's clinical trials and “complet[ing] a rigorous audit” of Plaintiff's research. Pet. at 5. Like all letters to FDA, the Citizen Petition was posted on a federal government webpage. Complaint ¶ 122. The Neuroscientist Defendants also authorized their lawyer to publish a press release hyperlinking to the letter. Id. ¶ 123.

In the following months, the Neuroscientist Defendants sent four supplemental letters and reports to the FDA expanding on their concerns and reasoning. Dkt. Nos. 30-6, 30-7, 30-11, 30-13 (together, with the Citizen Petition, the “Neuroscientist FDA Letters”). Those letters also contained critiques of the methodologies and figures included in published studies. See Dkt. Nos. 30-6, 30-7, 30-11, 30-13.⁶

6 Readers should refer to the First and Second R&Rs for a thorough description of the contents of the FDA Letters.

Plaintiff responded to the Neuroscientist FDA Letters with a series of press releases defending the integrity and validity of the challenged research and denouncing the claims in the letters. See, e.g., Dkt. No 35-3. Some of the subsequent Neuroscientist FDA Letters responded to the claims in Plaintiff's press releases and observed that since the publication of the Citizen Petition, other scientists had raised similar concerns about the research surrounding simufilam. See, e.g., Dkt. No. 30-13 at 2, 10. The letters also included hyperlinks to some of those critiques. See, e.g., Dkt. No. 30-11 at 4.

In October 2021, another group of scientists, Adrian Heilbut, Jesse Brodkin, Enea Milioris, and Patrick Markey⁷ (together, the “Dot Com Defendants”) registered the domain names cassavafraud.com and simuflimflam.com. Complaint ¶ 131-132. According to Plaintiff, the Dot Com Defendants also held short positions in Plaintiff's stock. Id ¶ 132. Shortly after registering the domain names, the Dot Com Defendants sent their own letter to the FDA (the “Dot Com FDA Letter”) (together, with the Neuroscientist FDA Letters, the “FDA Letters”). Id. ¶ 133; Dkt. No. 30-8. The Dot Com FDA Letter raised the same “grave concerns” as the Neuroscientist FDA Letters. See Dot Com FDA Letter at 1. Like the Neuroscientist FDA Letters, the Dot Com FDA Letter contained detailed analysis of published data, results, methodology, and figures in studies by Plaintiff, Dr. Wang, and Dr. Burns, and thoroughly described the reasoning for the scientists' concerns. See Dot Com FDA Letter. It also posed dozens of questions to Plaintiff arising from that analysis. See id. The Dot Com Defendants posted the letter to cassavafraud.com and simuflimflam.com. Complaint ¶¶ 133, 135.

7 As Judge Wang noted in the Second R&R, it does not appear that Dr. Markey ever responded to Plaintiff's amended complaint or entered a notice of appearance. Nonetheless, the other Dot Com Defendants' arguments apply equally to Dr. Markey, because Plaintiff alleges that he engaged in the same conduct. See Second R&R at 1 n. 3.

According to Plaintiff, the FDA Letters triggered scientific journals that had published the challenged research to conduct “independent investigations” of those studies. Complaint ¶ 371. Plaintiff alleges that “[e]ach journal, of course, concluded there was no evidence (or no compelling evidence) of the manipulation that Defendants claimed occurred.” Id. Plaintiff also alleges that other scientists disagreed with the FDA Letters in tweets and blog posts. Complaint ¶¶ 362-364.

C. Slide Decks

Days after publishing the Dot Com FDA Letter, the Dot Com Defendants posted a slide deck to their websites called “Cassava Sciences: A Shambolic Charade.” Id. ¶ 136; Dkt. No. 30-9 (the “Shambolic Charade Deck”). Drawing on publicly available information and analyses, including the FDA Letters, analyses on a website called PubPeer,⁸ news articles, and Plaintiff's public statements, the slide deck accused Plaintiff of data manipulation and fabrication with respect to simufilam and SavaDX and called on the FDA to halt the simufilam clinical trials. See Shambolic Charade Deck. Like the Dot Com FDA Letter, the Shambolic Charade Deck is replete with screenshots of and hyperlinks to its sources. See id.

8 Plaintiff does not allege any facts about PubPeer. The Court takes judicial notice that PubPeer is an online platform that allows users to critique published scientific research. See https://perma.cc/UEF4-FXBW.

Less than a month later, the Dot Com Defendants published another slide deck to their websites called “SavaDX Exposed.” Complaint ¶ 149; Dkt. No. 30-12 (the “SavaDX Deck”). Like the Shambolic Charade Deck, this presentation drew on publicly available information, including emails that the Dot Com Defendants obtained through the Freedom of Information Act (“FOIA”) and published online. See SavaDx Deck. It contained speculation about the mechanism by which SavaDX purported to diagnose Alzheimer's and expressed doubts about the test's accuracy. See Id. Also like the previous deck, the SavaDX deck included many screenshots and hyperlinks to its sources. See id.

Finally, weeks after publishing the SavaDX deck, the Dot Com Defendants published the final slide deck on their websites, called “Cassava and the Wang Lab: Seeing through the Blind.” Complaint ¶ 156; Dkt. No. 30-14 (the “Seeing through the Blind Deck”). This presentation had the same basic structure as the previous two, but focused on attacking Plaintiff's claims that its Open Label Study and Phase 2b Study were double-blind. See Seeing through the Blind Deck.

D. QCM Report and Interview

Shortly after the Dot Com Defendants published their first slide deck, a hedge fund called Quintessential Capital Management, LLC (“QCM”) published a report about Plaintiff. Complaint ¶ 16-17; Dkt. No. 30-10 (the “QCM Report”). Like the other defendants, QCM held a short position in Plaintiff's stock. Complaint ¶ 16. According to Plaintiff, QCM “publishes reports as part of its efforts to influence and/or manipulate the trading price for its investments.” Id.

The QCM Report contained disclaimers typical of many investment analysts, such as a disclosure that QCM held a short position in Plaintiff's stock and that the report represented QCM's opinions. See QCM Report. It began by describing QCM's investigation of Plaintiff. QCM represented that among other things, it had consulted with scientists, reviewed publicly available information, interviewed Plaintiff's former employees, and conducted surveillance of Plaintiff's research facilities. See QCM Report at 7-8. The report described accusations of misconduct against individuals involved in Plaintiff's business and scientific operations, including criminal convictions and fraud lawsuits, and analyzed the compensation structure for Plaintiff's executives. See id. at 7. It theorized that perverse incentives and untrustworthy actors made Plaintiff's claims about simufilam suspect. Id. at 8. Next, the report critiqued published simufilam research, describing alleged “red flags” and speculating about data manipulation. Id. at 22-29.

The QCM report then critiqued Plaintiff's clinical trial protocols based on publicly available documents and undercover surveillance of Plaintiff's research sites. Id. at 31. The report speculated that anomalous design and lack of certain safeguards might make the results of Plaintiff's clinical trials and Open Label study unreliable. Id. at 31-36. The report also hyperlinked to the Citizen Petition, analysis by a consulting scientist named Elizabeth Bik that was critical of Plaintiff's research, and a full report by the consultant who critiqued Plaintiff's clinical trial protocol. See QCM Report.

The following year, QCM's Managing Partner Gabriel Grego discussed the QCM Report in an interview about QCM's activist investing activities. See Dkt. No. 30-16 (“Grego Interview”). In the interview, he encouraged readers to review the full QCM Report. Id.

E. Tweets

Concurrently with the letters, slide decks, and report, QCM and the Dot Com Defendants posted frequent tweets about Plaintiff on the platform X (formerly known as Twitter). The tweets expressed many of the same sentiments that appear in the other publications. Plaintiff compiled nearly one thousand of those tweets in an appendix to the Complaint but alleges little about the context in which they were published, such as whether they were posted in response to other tweets, which tweets appeared alongside them on the author's X profiles, or any other information about the X profiles on which they appeared. See Dkt. No. 30-2, Appendix A. The only contextual information Plaintiff provides is the author and the date on which the tweet was posted. Id. The first of the tweets are dated November 2021, and the most recent are dated late 2022. Id.

F. Procedural History

In 2022, Plaintiff brought defamation claims against all of the defendants. See Dkt. No. 1. Plaintiff claimed that Defendants conspired to defame Plaintiff for profit. Complaint ¶ 282. Plaintiff challenged hundreds of statements in the FDA Letters, Slide Deck, QCM Report, Grego Interview and hundreds of tweets by the defendants, many of which themselves consist of multiple statements. Plaintiff asserted that the challenged statements amounted to false accusations that Plaintiff engaged in fraud and that simufilam is not effective.

Each of the three sets of defendants filed motions to dismiss arguing, among other things, that the challenged statements constituted opinions or scientific debate protected by the First Amendment, and that none of the statements had been published with actual malice. Dkt. Nos. 74, 77, 86. Plaintiff filed oppositions to all three motions. Dkt. Nos. 80 (“First Opposition”), 88 (“Second Opposition”), and 95 (“Third Opposition”). All three sets of defendants replied. Dkt. Nos. 81, 92, 96.

On January 3, 2024, Magistrate Judge Ona Wang issued an R&R recommending dismissal of Plaintiff's claims against the Neuroscientist Defendants. The R&R concluded, among other things, that the Neuroscientist Defendants' statements were non-actionable under the standard set forth in ONY, Inc. v. Cornerstone Therapeutics, Inc, 720 F.3d 490 (2d Cir. 2013). First R&R at 17-19.

Judge Wang issued another R&R on January 5, 2024 recommending dismissal of Plaintiff's claims against the Dot Com Defendants, primarily because she concluded their statements were either non-actionable under ONY or non-actionable opinions. See Second R&R at 8-11. Finally, Judge Wang issued an R&R on January 23, 2024 recommending dismissal of Plaintiff's claims against QCM, concluding that the challenged statements were opinions. See Third R&R at 10-14. Plaintiff filed timely objections to all three R&Rs, arguing that ONY was inapplicable to any of the challenged statements and that the R&Rs applied incorrect legal standards in several other respects. Dkt. Nos. 108 (“First Objections”), 109 (“Second Objections”), 115 (“Third Objections”). Each set of Defendants timely responded. Dkt. Nos. 112, 113, 116.

III. LEGAL STANDARD

A. Report and Recommendation

A district court reviewing a magistrate judge's report and recommendation on a dispositive motion “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1). Parties may raise specific, written objections to the report and recommendation within fourteen days of receiving a copy of the report. Id.; see also Fed.R.Civ.P. 72(b)(2). When a party timely objects to a magistrate's report and recommendation, a district court reviews, de novo, “those portions of the report or specified proposed findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1)(C) . But where “the party makes only frivolous, conclusory or general objections, or simply reiterates her original arguments, the Court reviews the report and recommendation only for clear error.” Chen v. New Trend Apparel, Inc., 8 F.Supp.3d 406, 416 (S.D.N.Y. 2014) (quoting Silva v. Peninsula Hotel, 509 F.Supp.2d 364, 366 (S.D.N.Y. 2007)). “Further, the objections ‘must be specific and clearly aimed at particular findings in the magistrate judge's proposal.'” McDonaugh v. Astrue, 672 F.Supp.2d 542, 547 (S.D.N.Y. 2009) (quoting Molefe v. KLM Royal Dutch Airlines, 602 F.Supp.2d 485, 487 (S.D.N.Y. 2009)). The Court also reviews for clear error those parts of the report and recommendation to which no party has timely objected. 28 U.S.C. § 636(b)(1)(A); Lewis v. Zon, 573 F.Supp.2d 804, 811 (S.D.N.Y. 2008).

B. Rule 12(b)(6)

Under F.R.C.P. Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. DiFolco v. MSNBC Cable LLC, 622 F.3d 104, 110-11 (2d Cir. 2010). To avoid dismissal, a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A formulaic recitation of the elements of a cause of action, devoid of supporting facts, does not suffice. Id. To satisfy the “plausibility” requirement, the plaintiff must plead facts that permit the court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).

Determining whether a complaint states a plausible claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. The court must accept all facts alleged in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 124 (2d Cir. 2008) (per curiam). However,

“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” A complaint must therefore contain more than “naked assertion[s] devoid of further factual enhancement.” Pleadings that contain “no more than conclusions . . . are not entitled to the assumption of truth” otherwise applicable to complaints in the context of motions to dismiss.

DeJesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 87-88 (2d Cir. 2013) (alterations in original) (quoting Iqbal, 556 U.S. at 678-79). Thus, a complaint that offers “labels and conclusions” or “naked assertion[s]” without “further factual enhancement” will not survive a motion to dismiss. Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555, 557).

On a motion to dismiss, a court must generally “limit itself to the facts stated in the complaint.” Field Day, LLC v. Cnty. of Suffolk, 463 F.3d 167, 192 (2d Cir. 2006) (quoting Hayden v. Cnty. of Nassau, 180 F.3d 42, 54 (2d Cir. 1999)). A court may also consider “documents attached to the complaint as exhibits, . . . documents incorporated by reference in the complaint . . . [and] document[s] integral to the complaint.” DiFolco, 622 F.3d at 111 (internal quotation marks and citation omitted). A court may consider these documents “not to prove the truth of their contents but only to determine what the documents stated.” Glob. Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (quoting Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991)). In the Rule 12(b)(6) context, “[a] court's task is to assess the legal feasibility of the complaint; it is not to assess the weight of the evidence that might be offered on either side.” Lynch v. City of New York, 952 F.3d 67, 75 (2d Cir. 2020). “The purpose of Rule 12(b)(6) is to test, in a streamlined fashion, the formal sufficiency of the plaintiff's statement of a claim for relief without resolving a contest regarding its substantive merits. The Rule thus assesses the legal feasibility of the complaint but does not weigh the evidence that might be offered to support it.” Glob. Network Commc'ns, 458 F.3d at 155.

C. Defamation

“In New York, ‘[d]efamation is the making of a false statement which tends to expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society.'” Elias v. Rolling Stone LLC, 872 F.3d 97, 104 (2d Cir. 2017) (quoting Stepanov v. Dow Jones & Co., 987 N.Y.S.2d 37, 41 (1st Dep't 2014)). “To state a claim for defamation, a complaint must allege ‘(1) a false statement that is (2) published to a third party (3) without privilege or authorization, and that (4) causes harm, unless the statement is one of the types of publications actionable regardless of harm.'” Id. (citing Stepanov, 987 N.Y.S.2d at 41-42). “In addition . . . a defamation plaintiff must allege that the purportedly defamatory statement was ‘of and concerning' him or her, i.e., that ‘[t]he reading public acquainted with the parties and the subject' would recognize the plaintiff as a person to whom the statement refers.” Id. at 104-105 (quoting Carlucci v. Poughkeepsie Newspapers, Inc., 57 N.Y.2d 883, 885 (1982)). When a defamation claim is brought by a public figure, the First Amendment independently requires a showing that the defendant acted with “actual malice.” N.Y. Times Co. v. Sullivan, 376 U.S. 254, 279-280 (1964).

At the motion to dismiss stage, the court “must decide whether the statements, considered in the context of the entire publication, are reasonably susceptible of a defamatory connotation, such that the issue is worthy of submission to a jury.” Stepanov, 987 N.Y.S.2d at 42 (quotations omitted). That determination is “guided not only by the meaning of the words as they would be commonly understood . . . but by the words considered in the context of their publication.” Levin v. McPhee, 119 F.3d 189, 195 (2d Cir. 1997) (citing Armstrong v. Simon & Schuster, Inc., 85 N.Y.2d 373, 381 (1995)). Allegedly defamatory statements must not “be read in isolation, but must be perused as the average reader would against the ‘whole apparent scope and intent' of the writing.” Celle v. Filipino Rep. Enters. Inc., 209 F.3d 163, 177 (2d Cir. 2000) (quoting November v. Time Inc., 13 N.Y.2d 175, 178 (1963)). A court may not “strain” to interpret statements in their most mild or defamatory sense. Lan Sang v. Ming Hai, 951 F.Supp.2d 504, 518 (S.D.N.Y. 2013) (quoting November, 13 N.Y.2d at 178). Where the challenged statements are “susceptible of multiple meanings, some of which are not defamatory,” the court may not conclude, as a matter of law, that the statements are or are not defamatory. Celle, 209 F.3d at 178 (citing Davis v. Ross, 754 F.2d 80, 83 (2d Cir. 1985)).

Statements of opinion are not actionable as defamation, “however unreasonable the opinion or vituperous the expression of it may be.” Davis, 754 F.2d at 85 (quoting Hotchner v. Castillo-Puche, 551 F.2d 910, 913 (2d Cir. 1977)). Whether a challenged statement is an opinion is a question of law. See id. The New York Court of Appeals has identified three factors to provide guidance as to whether a statement is fact or opinion:

(1) whether the specific language in issue has a precise meaning which is readily understood; (2) whether the statements are capable of being proven true or false; and (3) whether either the full context of the communication in which the statement appears or the broader social context and surrounding circumstances are such as to signal readers or listeners that what is being read or heard is likely to be opinion, not fact.

Gross v. N.Y. Times Co., 82 N.Y.2d 146, 153 (1993) (alteration omitted) (citations and quotations omitted). “The dispositive inquiry, under either Federal or New York law, is whether a reasonable reader could have concluded that [the statements] were conveying facts about the plaintiff.” Id. at 152 (alterations and quotations omitted); see also Flamm v. Am. Ass'n of Univ. Women, 201 F.3d 144, 153 (2d Cir. 2000) (noting that the inquiry “should not consist of a mechanical enumeration of each factor”).

A determination that a statement is an opinion “does not necessarily end of the analysis: if a statement is found to contain opinion, the court must next determine whether the statement is ‘pure opinion' (and thus non-actionable) or ‘mixed opinion' (and therefore actionable).” Chau v. Lewis, 771 F.3d 118, 129 (2d Cir. 2014). “Pure opinion is a ‘statement of opinion which is accompanied by a recitation of the facts upon which it is based' or does not imply that it is based on undisclosed facts.” Id. (quoting Steinhilber v. Alphonse, 68 N.Y.2d 283, 289-290 (1986)). “Mixed opinion, on the other hand, is an opinion that does imply a basis in undisclosed facts, or facts known only to the author, and is actionable.” Id. (emphasis in the original). In addition, “opinions based on false facts are actionable against a defendant who had knowledge of the falsity or probable falsity of the underlying facts.” Restis v. Am. Coal. Against Nuclear Iran, Inc., 53 F.Supp.3d 705, 719 (S.D.N.Y. 2014) (citing Davis, 754 F.2d at 86).

IV. DISCUSSION

Plaintiff objected to Judge Wang's conclusions that none of the alleged defamatory statements were actionable, that Plaintiff failed to adequately plead actual malice, and that Plaintiff failed to adequately plead special damages. Because Plaintiff's objections are “specific and clearly aimed at particular findings in the magistrate judge's proposal,” the Court reviews all of those conclusions de novo. McDonaugh, 672 F.Supp.2d at 547 (quotations omitted). On de novo review, the Court finds that Plaintiff has not adequately pleaded a claim for defamation against any of the defendants.

A. FDA Letters

Defendants challenge approximately two hundred statements that the Neuroscientist and Dot Com Defendants made in the FDA Letters. The Court has analyzed each of these statements individually and has determined that none of them are actionable. While the Court has analyzed each statement individually, it addresses them in this opinion using the following categories: (1) scientific conclusions, (2) opinion statements, (3) unchallenged factual statements, and (4) summaries and headings.⁹ The Court addresses each category in turn.¹⁰

9 Plaintiff argues that the Court is required to perform a “statement-by-statement analysis” to evaluate Plaintiff's defamation claims. First Objections at 12. Plaintiff has challenged more than one thousand statements in this case- some of which are in fact multiple statements, containing several sentences and communicating more than one message-and has made no attempt to brief each statement individually. Plaintiff instead groups the statements into broad, thematic categories that fail to take into account crucial factors such as the context in which the statements appeared. Moreover, with respect to many of these statements, including hundreds of tweets that do not reference Cassava in any manner, Plaintiff has not raised even a colorable defamation claim. While the Court has analyzed each statement individually, it does not perform statement-by-statement analysis in this opinion. Because Plaintiff identifies more than one thousand statements as actionable, the Court demonstrates its analysis using representative example statements.

10 Some of the statements Plaintiff challenges contain multiple statements and therefore fall into multiple categories.

i. Scientific Conclusions

First, the Court finds most of the challenged statements are scientific conclusions that purport to be based on the data and analysis presented in the FDA Letters.¹¹ Therefore, the Court analyzes those statements under the framework articulated by the Second Circuit in ONY, Inc. v. Cornerstone Therapeutics, Inc, 720 F.3d 490 (2d Cir. 2013). In ONY, the Second Circuit acknowledged that “[s]cientific academic discourse poses several problems for the fact-opinion paradigm of First Amendment jurisprudence.” 720 F.3d at 496. While the “very premise of the scientific enterprise” is that it “engages with empirically verifiable facts about the universe,” it is also “the essence of the scientific method that the conclusions of empirical research are tentative and subject to revision, because they represent inferences about the nature of reality based on the results of experimentation and observation.” Id. Where “a statement is made as part of an ongoing scientific discourse about which there is considerable disagreement, the traditional dividing line between fact and opinion is not entirely helpful.” Id. at 497. Therefore, where a “speaker or author draws conclusions from non-fraudulent data, based on accurate descriptions of the data and methodology underlying those conclusions, on subjects about which there is legitimate ongoing scientific disagreement,” those statements are not actionable. Id.

11 Other examples in the FDA Letters include: “There are two red flags with these reported data. First, the observed mean ADAS-Cog 11 scores after 6 and 9 months are virtually the same (13.9 vs. 13.6, respectively), so the data do not appear to demonstrate a continued improvement. Second, the baseline data between the 6-month and 9-month analyses changes substantially, and to a degree that seems inconsistent with other information provided by the company, suggesting possible manipulation”; “Figure 11a: The five leftmost tau bans appear to be identical to each other, AND the 3 rightmost tau bands appear to be identical to each other. These degrees of similarity are unlikely to occur by chance”; “When compared to the reported baseline standard deviation of 7.7 points and the observed improvement of 3 points, a difference of 13.75 points between dropped-out and newly included patients is suspiciously large. Whereas in Ph2b Cassava was able to obscure the effect of [s]imufilam through imaginative use of outlier exclusion criteria, in the Open Label Study they appear to have swapped subjects from 6 to 9 months in order to include those with extremely high ADAS-Cog scores.” Complaint ¶¶ 179, 239.

Most of the challenged statements in the FDA Letters fall squarely within this framework. In the FDA Letters, Defendants state the scientific conclusions that Plaintiff's, Dr. Wang's, and Dr. Burns' results and methodologies display certain anomalies.¹² They then conclude that as a result of those alleged anomalies, Plaintiff's claims about simufilam may be unreliable.¹³ The “non-fraudulent data” that Defendants analyzed to arrive at these conclusions were published data, figures, methodologies, and results. Id. The “accurate descriptions of the data and methodology underlying those conclusions” are laid out in the letters to the FDA. Id. Defendants' methodology includes, among other things, visual comparisons of Western blots and critiques of methods used in foundational simufilam studies. And finally, there is “legitimate scientific disagreement” about whether simufilam data or research methodologies are anomalous and whether the alleged anomalies make Plaintiff's claims about simufilam unreliable. Id. That scientific disagreement is demonstrated by Plaintiff's allegations that “multiple science editors conducted independent investigations into journal articles they had published about Cassava's foundational science and testing of simufilam” in response to the FDA Letters. Complaint ¶ 371.

12 For instance, the Dot Com Defendants concluded, based on their biomarker analysis, that “[t]he above adds to an extended series of implausible and entirely unrealistic values reported for nearly every CSF biomarker analyzed by Cassava Sciences.” Complaint ¶ 215.

13 For instance, the Neuroscientist Defendants concluded, after outlining their concerns of data manipulation, that “[t]his seemingly irrefutable data manipulation is important both because it implies a pattern of reckless scientific misconduct and because it undercuts foundational science related to simufilam mechanism of action in Alzheimer's disease.” Complaint ¶ 179.

Plaintiff argues that this conclusion “improperly expands” the holding of ONY to “create new law.” First Objections at 17. To the contrary, as described above, the Neuroscientists Defendants' statements are clearly within the ONY's bounds. Plaintiff seeks to distinguish Defendants' statements from the type of statements contemplated by ONY on two grounds. First, Plaintiff complains that unlike the defendants in ONY, Defendants published their statements in anonymous whistleblower letters to the FDA instead of in peer-reviewed journals. But ONY's holding is not limited to scientific debate presented in peer-reviewed publications. Rather, ONY concerned statements made in “[s]cientific academic discourse” and observed that much of that discourse takes place in peer-reviewed journals. ONY, Inc., 720 F.3d at 496-497. While Defendants did not publish their scientific conclusions in peer-reviewed journals, their statements were “contested and contestable scientific hypotheses” made in communications directed to the “relevant scientific community.” Id. This is demonstrated by Plaintiff's allegation that as a result of the FDA Letters, other members of the scientific community, including Plaintiff, “respond[ed] by attempting to replicate the described experiments, conducting their own experiments, or analyzing or refuting the soundness of the experimental design or the validity of the inferences drawn from the results.” Id. at 497. This is exactly the type of “ongoing discourse” in scientific communities in which courts should avoid interfering. Id.¹⁴

14 Defendants cite three cases in which courts in this circuit and others rejected ONY's application: Eastman Chem. Co. v. Plastipure, Inc., 775 F.3d 230, 235 (5th Cir. 2014), Mimedx Grp., Inc. v. Osiris Therapeutics, Inc., No. 16 CIV. 3645 (KPF), 2017 WL 3129799, at *2 (S.D.N.Y. July 21, 2017), and Solys Med., LLC v.Organogensis, Inc., No. 4:18cv30, 2018 WL 10579659, at *5 (E.D. Va. Dec. 12, 2018). But all of them are distinguishable. The defendants in those cases repurposed scientific conclusions-originally published in other, protected mediums-as commercial speech directed at consumers. Those courts declined to apply ONY in those contexts not simply because the challenged speech did not appear in a peer-reviewed journal but because, as the court in Eastman Chem. Co. stated, the speech was made in an advertisement, directed at consumers, and “made without the necessary context presented by a full scientific study.... Advertisements do not become immune from Lanham Act scrutiny simply because their claims are open to scientific or public debate.” 775 F.3d at 236. Here, the FDA Letters were not advertisements. They did not repurpose conclusions from scientific analyses to sell products. Rather, the FDA Letters themselves contained robust scientific analysis, presented alongside the context required by ONY. In addition, they were directed at, and received a response from, the FDA and other members of the scientific community.

Second, Plaintiff argues that unlike the statements at issue in ONY, Defendants' statements were not “inferences about the scientific conclusions to be drawn from the analysis of experimental data” but rather statements that “impugn the motives and integrity of Cassava and accuse it of intentional wrongdoing.” First Objections at 19. But as described, many of Defendants' statements in the FDA Letters are precisely “inferences about the scientific conclusions to be drawn from the analysis of experimental data,” namely inferences about potential data manipulation or errors in studies surrounding simufilam, based on those studies' published data, figures, and methodologies. Id. Whether Plaintiff disagrees with Defendants' inferences, or whether they might reflect unfavorably on Plaintiff, does not determine whether they qualify as scientific inferences under ONY. Cf. Joseph v. Springer Nature, No. 20 CIV. 4672 (JPC), 2021 WL 1372952, at *7 (S.D.N.Y. Apr. 12, 2021) (noting that scientific journal's critiques of an analysis as “superficial and flawed” were not actionable under ONY), aff'd sub nom. Joseph v. Springer Nature Am. Inc., No. 21-959-CV, 2021 WL 6105369 (2d Cir. Dec. 21, 2021) (summary order).

Plaintiff also argues that even if the Court characterizes the statements in the FDA Letters as inferences, “Cassava alleges that the statements made by [the defendants] were not reasonable inferences from the facts and data presented by Cassava.” First Objections at 15 (emphasis in the original). But the Court need not find that Defendants' statements were “reasonable” scientific conclusions in order to conclude that they are not actionable. The Second Circuit opined in ONY that courts are “ill-equipped to undertake such controversies” as the “validity” of scientific inferences. ONY, Inc., 720 F.3d at 497. Caselaw on non-scientific opinions, which Plaintiff urges the Court to apply to the statements in the FDA Letters, also does not include any such “reasonableness” requirement. In fact, “expression of pure opinion is not actionable . . ., no matter how vituperative or unreasonable it may be.” Steinhilber, 68 N.Y.2d at 289.¹⁵

15 As discussed below, the Court also finds that Plaintiff has failed to adequately plead that Defendants' accusations were “inherently improbable.”

Finally, Plaintiff argues that an application of ONY to the FDA Letters sets a dangerous precedent of “carte blanche immunity for publishers who attack others engaged in scientific endeavor.” First Objections at 18. But it is at least arguable that Plaintiff's contention that the Court should find these scientific inferences actionable is dangerous. Plaintiff urges the Court to apply a pleading standard that would allow any drug developer to state a claim for defamation against any scientist who raised concerns about the integrity of a drug developer's research. A drug developer would be able to do so no matter how thorough and earnest the reasoning expressed by the scientist for her concerns, so long as the drug developer alleged that those concerns were unfounded and presented competing analyses in support of that claim. Such a result risks stifling scientific debate and undermining the vital role of whistleblowers in scientific discourse in both the academy and industry. ONY recognized the importance of permitting scientific debate in which “the scientific public sits as jury” rather than chilling it with litigation. ONY, Inc., 720 F.3d at 497. As ONY warned, “courts are ill-equipped to undertake to referee” such controversies. Id. The Court will not attempt to do so here.

ii. Other Opinion Statements

Applying the Gross framework, the Court finds that several of the remaining challenged statements in the FDA Letters-the Neuroscientist FDA Letters specifically-qualify as opinions, albeit not scientific opinions.¹⁶ For instance, the Court uses that framework to assess the statement that “[o]n September 3, 2021, Remi Barbier, Cassava's CEO, claimed in a public statement ‘we don't have the original films or images for the Western blots in question. Those were generated by our science collaborator at CUNY, who is Prof. Wang.' However, this representation is highly doubtful.” Complaint ¶ 231.

16 Other examples of opinion statements in the Neuroscientist FDA Letters include: “It is worth noting that Cassava's publication of these suspicious Phase 2a biomarker data occurred in a paper (JPAD 2020 4:256) that was accepted just 6 days after submission, which calls into question the credibility and rigor of that journal's peer review process”; “Suddenly pausing SavaDx is another major red flag, as Cassava has described it has fast and inexpensive.” Complaint ¶¶ 231, 252.

Applying the Gross factors, the Court finds that any “reasonable reader” would have understood this statement to be conveying an opinion. Gross, 82 N.Y.2d at 152. (noting that this is the “dispositive inquiry” under New York law). New York Courts have found that qualifying language-here, “highly doubtful”-cuts against a finding that a statement is “capable of being proven true or false.” Id. at 153; see, e.g., Small Bus. Bodyguard Inc. v. House of Moxie, Inc., 230 F.Supp.3d 290, 312 (S.D.N.Y. 2017) (finding that “[t]here is no way to verify the truth of [the defendant's] statement that ‘many people' ‘might'” view certain actions as fraud); Schmitt v. Artforum Int'l Magazine, Inc., 115 N.Y.S.3d 291, 301 (1st Dep't 2019) (finding that “hedged phrasing also does not present falsifiable statements of fact”); Bellavia Blatt & Crossett, P.C. v. Kel & Partners LLC, 151 F.Supp.3d 287, 293 (E.D.N.Y. 2015) (noting that qualifier words “signal presumptions and predictions rather than facts”) (collecting cases), aff'd, 670 Fed.Appx. 731 (2d Cir. 2016) (summary order).¹⁷

17 The other examples in footnote 19 similarly use qualifying or cautious language: “red flags” and “calls into question.” Complaint ¶¶ 231, 252.

The statement's context also indicates that it is an opinion. Gross, 82 N.Y.2d at 153. It appears in a report prefaced by a cover letter characterizing the report as expressing “concerns” rather than stating facts. Dkt. No. 30-7 at 3. It also calls on the FDA not to halt the clinical trials permanently, but to launch an investigation to determine whether the concerns raised in the report are founded. Id. at 8. The later FDA letters also respond to specific statements in Plaintiff's press releases. See Silvercorp Metals Inc. v Anthion Management LLC, No. 150374/2011, 959 N.Y.S.2d 92, 2012 WL 3569952, at *2 (N.Y. Sup Ct, Aug. 16, 2012) (finding that “the point-counterpoint nature” of the defendant's publication, which responded to the plaintiff's press release “is characteristic of opinionated debate”). Particularly coupled with the statement's qualifying language-in addition to qualifying and conditional language throughout the document-that context means that “a reasonable reader would understand the statement[] defendant made about plaintiff as mere allegations to be investigated rather than as facts.” Brian v. Richardson, 87 N.Y.2d 46, 53 (1995); see also Lavine v. Glavin, 194 N.Y.S.3d 403, 405 (4th Dep't 2023) (finding that qualifying language combined with the fact that the “[t]he purpose of the letter was to implore the Inspector General to commence an investigation” indicated that the letter contained statements of opinion).

Plaintiff argues that the allegations underlying the challenged statements-here, that Plaintiff lied about not having the original films or images-“either happened or not. It is not a matter of opinion. This alone suffices to render [Defendants'] accusations actionable.” First Opposition at 13.¹⁸ But under New York law,

18 Plaintiff makes these same arguments with respect to the statements the Court categorizes as scientific inferences. Though the Court has found that those statements are protected by ONY, it notes that its response to Plaintiff's arguments applies equally to those statements.

even . . . accusations of criminality could be regarded as mere hypothesis and therefore not actionable if the facts on which they are based are fully and accurately set forth and it is clear to the reasonable reader or listener that the accusation is merely a personal surmise built upon those facts. In all cases, whether the challenged remark concerns criminality or some other defamatory category, the courts are obliged to consider the communication as a whole, as well as its immediate and broader social contexts, to determine whether the reasonable listener or reader is likely to understand the remark as an assertion of provable fact.

Gross, 82 N.Y.2d at 155. Here, analyzing the challenged communications as a whole, the Court has determined that any reasonable reader would understand the statements in this category to be hypotheses based on the facts set forth in the FDA Letters.¹⁹

19 For the same reason, Plaintiff's argument that “Courts consider statements taking the form of accusations of criminal or unethical conduct as crossing the borderline between fact and opinion” is unpersuasive. First Opposition at 16 (quotations and alterations omitted).

Plaintiff also argues that if the Court finds that any of the challenged statements are statements of opinion, it should find that they are actionable mixed opinions. But Plaintiff has failed to adequately plead that any of the challenged statements are based on false facts or that any of the challenged statements “impl[ies] a basis in undisclosed facts, or facts known only to the author ....” Restis, 53 F.Supp.3d at 719; Chau, 771 F.3d at 129. First, Plaintiffs do not identify allegedly false factual statements on which the Neuroscientists purported to base their opinion statements or scientific inferences.²⁰ Plaintiff asserts that “the [Complaint] includes dozens of allegations establishing that . . . the underlying facts in the publications are false ....” First Opposition at 17. But the dozens of paragraphs of the Complaint Plaintiff references do not identify any factual assertions that Plaintiff alleges are false. Those sections instead contain only disagreements with the Defendants' scientific inferences and opinions. As discussed, those scientific inferences and opinions are not actionable even if Plaintiff disagrees with them.

20 While the Court analyzed all scientific statements under ONY, ONY's requirement that inferences be based on “non-fraudulent data” is analogous to the requirement that opinions not be based on false underlying facts. ONY, Inc., 720 F.3d at 497.

Second, the Court does not find that any of the challenged opinion statements “imply a basis in undisclosed facts, or facts known only to the author ....” Chau, 771 F.3d at 129. The FDA Letters offered painstaking detailed explanations of the basis for every scientific inference and opinion expressed, often accompanied by visual aids.²¹ Plaintiff does not identify, and the Court has not found, any language in the FDA Letters that a reasonable reader could interpret as implying the existence of “undisclosed facts, or facts known only to the author” that would make the challenged statements actionable as mixed opinions. Chau, 771 F.3d at 129. “If the recitation purports to be all the facts on which the decision was based, then it affords the audience an opportunity to evaluate the opinion, including whether the recited facts were sufficient to warrant it.” Chandok v. Klessig, 648 F.Supp.2d 449, 458 (N.D.N.Y. 2009), aff'd, 632 F.3d 803 (2d Cir. 2011). Accordingly, none of the statements in this category is actionable.

21 Again, while the Court analyzed scientific inferences under ONY, it notes that this analysis applies equally to those statements and shows that the scientific inferences were accompanied by “accurate descriptions of the data and methodology underlying those conclusions,” as required by ONY. ONY, Inc., 720 F.3d at 497.

iii. Factual Statements

In addition to arguing that the challenged statements are mixed opinion statements, Plaintiff directly challenges a number of factual statements. The Court concludes that Plaintiff did not adequately plead that any of these statements were false, as it must to state a claim for defamation.²² Elias, 872 F.3d at 104. For instance, Plaintiff challenges the statement, “[i]n its September 14, 2020 press release and 2020 Form 10-K at page 12, Cassava stated that the redo was conducted by an ‘outside lab.' Contrary to these public statements and filings, the Research Square preprint [] documenting Cassava's redo analysis states that the experiments were done by Dr. Wang and associates at CUNY.” Complaint ¶ 227. But Plaintiff does not allege that Defendants misrepresented Plaintiff's press release and 10-K form. It also does not allege that the reanalysis was not conducted by Dr. Wang's lab or that Dr. Wang is not affiliated with Plaintiff.²³ Accordingly, Plaintiff has not adequately pleaded that this statement is false.²⁴

22 Barring a false statement, a plaintiff may also state a claim for defamation by pleading that a factually true statement has a false defamatory implication. The Court addresses this argument below.

23 The Complaint also does not plead that Dr. Wang's lab is an “outside lab.” It reserves that characterization for the lab that did the original analysis, which it describes as “an outside lab, with whom it had no prior work experience.” Complaint ¶ 73.

24 The same is true for the other challenged factual statements in the FDA Letters. Those include: “Note that the change from Day 1 in total errors (ClinicalTrials.gov) does not match the data in the CTAD presentation. Further, the 50 mg treatment group demonstrated a greater difference than the 100 mg treatment group;” “Each of these publications has been fla[gg]ed on [PubPeer] for possible image manipulation by, among others, intentional expert in scientific fraud detection Dr. Elisabeth Bik. The central author common to these papers is none other than Dr. Wang.” Complaint ¶¶ 174, 215.

iv. Summaries and Headings

Finally, the remaining challenged statements in the FDA Letters simply summarize the contents of the documents in which they appear or the contents of previous FDA Letters, or are descriptive headings.²⁵ For instance, Plaintiff challenges the heading, “[s]uspicious Claim #4: Novel Blood Diagnostic SavaDx Represents Plasma Filamin A Level.” Complaint ¶ 252. Plaintiff also challenges the summary, “[w]e are writing to express grave concerns regarding Cassava Sciences as a sponsor of clinical studies using [s]imufilam to treat Alzheimer's disease (AD). These concerns arise from an assessment of virtually every aspect of their program that has been made available for public scrutiny. We find serious deficiencies in the scientific integrity of the sponsor, Cassava

25 Other examples of headings and summaries in the FDA Letters include: “Suspicious Claim #2: Remarkably High Affinity Bonding Between Naloxone and Filamin A;” “We show, using publicly available evidence, that Cassava Sciences has not fulfilled the responsibilities that your agency requires of sponsors in the conduct of clinical studies and the monitoring of patient's safety.” Complaint ¶¶ 161, 197.

Sciences, who exhibits signs of misleading behavior.” Id. ¶ 161. But Plaintiff does not contend that these headings and summaries inaccurately or misleadingly describe the contents of the FDA Letters in which they appear. In other words, the alleged defamatory nature of these statements hinges on a determination that the underlying statements they summarize are defamatory. Instead, as described, the Court has found that the underlying statements are statements of scientific inference, opinion statements, or factual statements that Plaintiff does not allege are false, and are therefore non-actionable. Given that the statements in this category accurately summarize non-actionable statements, Plaintiff cannot seriously contend that they are defamatory themselves. See Schermerhorn v Rosenberg, 426 N.Y.S.2d 274, 287 (2d Dep't 1980) (“[I]f headline is a fair index of an accurate article, it is not actionable.”).

B. QCM Report

Next, Plaintiff challenges dozens of statements in the QCM Report. The Court has reviewed each of those statements individually and determined that none of them are actionable. A minority of the challenged statements are factual assertions that Plaintiff has not alleged are false.²⁶Applying the Gross factors, the Court finds that the remaining challenged statements qualify as opinions. Most of those opinions express doubt about Plaintiffs' scientific claims or speculate about potential conflicts of interest or allegedly untrustworthy people involved in Plaintiff's operations.

26 For instance, Plaintiff challenges the statement that “IMIC is co-led by a Boris Nikolov, a 51-year-old-immigrant from Bulgaria. Mr. Nikolov has a medical license in Bulgaria, but not in the U.S. (though “MD” occasionally appears next to his name). Our background checks on Mr. Nikolov in Bulgaria revealed a close business association with a Kirstin Valentinova Zaharieva, a real estate investor with 2 criminal records for fraud.” Complaint ¶ 258. Plaintiff does not allege that any of the factual assertions in this statement are false. Plaintiff also challenges that statement that “[m]oreover, Cassava's management has somehow managed to approve what looks to us like an outrageous compensation system, literally rewarding short-term stock price fluctuations regardless of more traditional metrics [] such as profitability or drug approval milestones.” Complaint ¶ 273. Plaintiff claims this statement is false because “Cassava's management has not received cash payments tied to the Company's stock price, and may or may never receive any such cash payments, depending on final test results for simufilam and other variables.” Id. But the statement that Plaintiff's executives have not yet received such payments does not contradict QCM's description of Plaintiff's compensation structure.

The Court determines that no “reasonable reader could have concluded that [those statements] were conveying facts about the plaintiff.” Gross, 82 N.Y.2d at 153. As an illustrative example, the Court used this framework to analyze the challenged statement, “[s]imufilam, Cassava's only prospective drug, appears [to be] based on allegedly forged scientific research. Phase II trials have been conducted with numerous and serious irregularities which appear to have allowed management to deceive investors about the effectiveness of the drug.”²⁷ Complaint ¶ 161. First, this statement signals it is an opinion by using three different qualifiers: “appears to be,” “allegedly,” and “appear to be.” See, e.g., Small Bus. Bodyguard Inc., 230 F.Supp.3d at 312; Bellavia Blatt, 151 F.Supp.3d at 296 (collecting cases).²⁸

27 Other examples of opinions statements in the QCM Report include: “[i]nterestingly, only a few years later, about when IMIC starts collaborating with Cassava, the financial situation for the couple improves dramatically . . . We find the sudden change in fortune remarkable and wonder whether it might be related to IMIC's relationship with Cassava and the noted anomalies in the study;” “In Cassava, there are a number of red flags: in some cases role of monitor has been assigned to Nadav Friedman, the Company's Chief Medical Officer and Chief Operating Officer. That a company's executive be placed in such a position is both unusual (it's a very tedious job for a senior figure) and worrying (it creates a conflict of interest as Cassava is unlikely to blow the whistle on itself) . . . This is even more disturbing considering that Mr. Friedman has been sued for securities fraud for making allegedly fraudulent statements regarding Cassava's former drug Remoxy.” Complaint ¶¶ 258, 266.

28 The other example statements in footnote 30 similarly employ speculative language, such as “we find,” and “red flags.” In fact, every challenged statement in the QCM Report-excluding the factual assertions that Plaintiff has not alleged are false-uses at least one qualifier, conditional phrase, or other word or phrase indicating speculation.

Second, the full context of the statement also strongly signals to a reasonable reader that the statement is an opinion. Gross, 82 N.Y.2d at 153. The statement appears in an investor report that is clearly identified as such. Cf. MiMedx Grp., Inc. v. Sparrow Fund Mgmt. LP, No. 17CV07568PGGKHP, 2018 WL 847014, at *7 (S.D.N.Y. Jan. 12, 2018) (finding that the context of an exchange between a “two sophisticated investors,” including a short seller, demonstrated that a statement was an opinion) report and recommendation adopted, No. 17 CIV. 7568 (PGG), 2018 WL 4735717 (S.D.N.Y. Sept. 29, 2018); see also Yangtze River Port and Logistics Ltd. v. Research, No. 150721/2019, 2020 WL 905770, at *7 (N.Y. Sup. Ct., Feb. 25, 2020) (noting that “courts frequently determine that investment analysis . . . constitutes the author's opinion” in part on the basis of the publication medium) (collecting cases). The report begins with a disclaimer that it “reflects the opinions and projections” of QCM, and it includes more than 100 uses of qualifying or conditional language throughout. QCM Report at 3. It also discloses QCM's short position in Plaintiff's stock. Id; see Silvercorp Metals Inc., 2012 WL 3569952, at *2 (finding that a defendant's disclosure of his short position “indicates to the reader that the author is expressing his opinion”). In addition, the report provides examples of other activist investing campaigns by QCM and touts their success rate. See QCM Report at 6. This context, particularly the transparency about QCM's motives for creating the report, strongly signal that the author is expressing an opinion.

As another example, the Court used the same framework to assess the challenged statement, “[t]here are powerful incentives for Cassava's management to possibly commit misconduct in clinical trials, deceiving investors about the real prospects of [s]imufilam.” Complaint ¶ 273. In this context, whether there exist “powerful incentives” for Plaintiff's management to commit scientific misconduct is a matter of opinion that cannot be proven true or false. Cf. Chau v. Lewis, 935 F.Supp.2d 644, 655 (S.D.N.Y. 2013) (finding that the statement that “[t]he bond market had created what amounted to a double agent-a character who seemed to represent the interests of investors when he better represented the interests of Wall Street bond trading desks” could not be proven true or false), aff'd, 771 F.3d 118 (2d Cir. 2014); 61 Crown St., LLC v. Kingston Uptown Bus. Men's Ass'n, Inc., 2020 NY Slip Op 33347(U), ¶ 15 (N.Y. Sup. Ct. 2020) (finding that “plaintiffs' motivations . . . are not capable of being proven true or false”). The use of the qualifier “possibly” and modifier “powerful” also signals that the statement represents an opinion. See Bellavia Blatt, 151 F.Supp.3d at 296; Wexler v. Dorsey & Whitney, LLP, No. 18-CV-3066-SJB, 2019 WL 5485265, at *7 (E.D.N.Y. Oct. 25, 2019) (finding that “the addition of ‘major,' an adjective, is an attempt to ascribe a measure of significance to the scheme. What is major to one is minor to another; it is a term that adds relativity, and therefore uncertainty, to the meaning” of a statement, indicating it may be a statement of opinion), aff'd, 815 Fed.Appx. 618 (2d Cir. 2020) (summary order). Coupled with the context of this statement described in the previous paragraph, no reasonable reader would interpret this statement as a factual assertion.²⁹

29 Plaintiff's argument that QCM's description of its extensive investigation and its past successful activist investing campaigns transforms its statements into statements of fact is unpersuasive. Plaintiff cites no authority to suggest that an author's conviction in and support for its opinions renders its opinions statements of fact. A rule that privileges shallowly researched or capricious opinions but not thoroughly researched or steadfast opinions would also make little sense.

The Court also finds that, contrary to Plaintiff's contention, none of the challenged statements qualify as actionable mixed opinion because Plaintiff has failed to adequately plead that any of them “imply a basis in undisclosed facts, or facts known only to the author” or are based on false facts. Chau, 771 F.3d 118 at 129; Restis, 53 F.Supp.3d at 719. First, Plaintiff identifies several portions of the QCM Report that it unpersuasively argues imply a basis in undisclosed facts. Plaintiff complains that “in its Report QCM claims to rely on ‘multiple expert opinions' it obtained from ‘industry leaders' and ‘consultants hired by QCM,' but only discloses two.” Second Opposition at 17. However, as QCM points out, “two” is “multiple.” Dkt. No. 92 at 7. Plaintiff also takes issue with QCM's reliance on an anonymous message board post, a reference to conversations with unnamed former employees of Cassava, and a reference to unnamed studies that utilized a particular sample population criterion that Plaintiff's studies lacked. Second Opposition 17-18. But Gross and its progeny do not require that an author disclose the identities of her sources in order for her opinion to qualify as a non-actionable, pure opinion. They require only that she disclose the facts on which her opinion is based and that she does not imply a basis in other, undisclosed facts. Chau, 771 F.3d at 129; see also Biro v. Conde Nast, 883 F.Supp.2d 441, 461 n.8 (S.D.N.Y. 2012) (“Although reliance on an ‘unverified, anonymous source' has bearing on whether a statement was made with actual malice, it has no bearing on whether a statement is reasonably susceptible of a defamatory meaning or is privileged as opinion.”) (quoting Stern v. Cosby, 645 F.Supp.2d 258, 278 (S.D.N.Y. 2009)).³⁰

30 In support of this argument, Plaintiff cites Public Relations Socy. of Am., Inc. v. Road Runner High Speed Online, 8 Misc.3d 820, 799 N.Y.S.2d 847 (N.Y. Sup. Ct., 2005), in which the court found a statement was an actionable mixed opinion because “[t]he writer of the e-mail implie[d] that his opinion, as a whole, [was] shared by other persons in the organization, who [were] not named.” First, with respect to QCM's references to unnamed other studies and former Cassava employees, QCM did not assert that these sources endorsed its opinions. Rather, it relied on these sources for specific facts that supported its opinions. Second, with respect to the anonymous online comment, QCM did “not imply that [its] opinion is shared by other anonymous individuals to give the implication that there are more unstated facts supporting [its] position ....” Nanoviricides, Inc. v. Seeking Alpha, Inc., No. 151908/2014, 2014 WL 2930753, at *5 (N.Y. Sup. Ct. June 26, 2014). To the contrary, QCM linked to the full anonymous opinion so that readers could evaluate it and its purported factual basis for themselves.

Here, the QCM Report disclosed those facts by linking to the anonymous online comment, describing the relevant content of the conversations with anonymous former employees, and describing a difference between certain unnamed studies and Plaintiff's studies that QCM found important to its analysis. See Shader v. Overby, No. 907245-20, 2022 WL 3567123, at *6 (N.Y. Sup. Ct. Jan. 25, 2022) (“There is no implication in the initial post that defendant has some other, hidden information on which this conclusion was premised ....”); Sandals Resorts Int'l Ltd. v. Google, Inc., 925 N.Y.S.2d 407, 416 (1st Dep't 2011) (“Far from suggesting that the writer knows certain facts that his or her audience does not know, the e-mail is supported by links to the writer's sources.”). Accordingly, Plaintiff has not adequately pleaded that this statement is an actionable mixed opinion due to an implied basis in undisclosed facts.

Second, Plaintiff claims that “the QCM Report is full of false statements regarding Cassava and its research.” Third Objections at 18. Plaintiff's Second Opposition sets forth the “facts” in the QCM Report it alleges are false. See Second Opposition at 5-7. But the Second Opposition fails to identify a single false factual statement in the QCM Report. Instead, it reiterates Plaintiff's disagreements with the opinions expressed by QCM, such as the opinion that Plaintiff may have manipulated its data. Accordingly, Plaintiff has failed to adequately plead that any of the statements in the QCM Report constitute actionable mixed opinion.

C. QCM Grego Interview

Plaintiff also briefly challenges four statements made in a print interview by QCM's Managing Partner Gabriel Grego. Interpreted in context, these statements share many characteristics with the QCM Report and would be clearly understood as opinions. Mr. Grego made the challenged statements during an interview about QCM's activist investing activities. Cf. MiMedx Grp., 2018 WL 847014, at *7. He summarized the contents and conclusions of QCM's Report, which he also encouraged readers to review for themselves. The interview contains a hyperlink to the report. Additionally, Mr. Grego echoes the qualified, cautious tone of the report, using phrases like “we believe” and “may” and referring to “evidence” of wrongdoing. See Bellavia Blatt, 151 F.Supp.3d at 296. Accordingly, the Court finds that Mr. Grego's statements in the interview would be understood by any reasonable reader as expressions of opinions. Furthermore, they do not qualify as actionable mixed opinions because he sets forth their basis by referencing and linking to the QCM Report.

D. Dot Com Defendants' Slide Decks

Plaintiff challenges additional statements made by the Dot Com Defendants in the three slide deck presentations posted to their websites cassavafraud.com and simuflimflam.com. The Court addresses the statements in each slide deck in turn.

i. Shambolic Charade Deck

The Court has reviewed each of the challenged statements in the Shambolic Charade presentation individually and determines that none of them are actionable. The presentation consists of: (1) non-actionable republications of scientific conclusions, (2) non-actionable opinions, and (3) factual assertions Plaintiff does not allege are false. The Court will address each category in turn.

First, the Shambolic Charade presentation repeats a number of scientific conclusions stated in the Dot Com FDA Letter or in analyses by users, including the Dot Com Defendants, on an online platform called PubPeer.³¹ As a representative example, the presentation includes a slide cataloguing what it refers to as “Cassava's Unrealistic Claims,” which ends with an instruction to the reader to “[r]efer to our report for the complete investigation of the company's claims and published data on biomarkers.” Shambolic Charade Deck at 24. This section of the presentation is prefaced by the statement, “we present highlights from our full [Dot Com FDA Letter] of the egregious data anomalies and manipulation of both the biomarker and cognitive measurements from Cassava's Phase 2 trials.” Shambolic Charade Deck at 6. The first page also hyperlinks to the Dot Com FDA Letter. Id. at 2.

31 Plaintiff does not allege that any of the PubPeer posts referenced in Defendants' presentation are themselves defamatory. However, Plaintiff challenges the statement “[t]here is now no serious question that the majority of Dr. Wang's work-including that with Cassava-contains fabrications.” Complaint ¶ 179. In support of this accusation, the presentation hyperlinks to and screenshots PubPeer analyses of Dr. Wang's studies that accuse him of data manipulation. Some of the PubPeer analyses list one of the Dot Com Defendants as the author and include substantially the same content as the Dot Com FDA Letter. The linked statements on Pubpeer are incorporated by reference, and the Court finds that they are protected scientific debate under ONY, for the same reasons as the challenged statements in the FDA Letters.

Such republications of scientific conclusions are protected under ONY. In ONY, in addition to finding that scientific conclusions in a journal article were non-actionable as scientific debate, the Second Circuit affirmed that a press release that “accurate[ly]” presented those scientific inferences was also not actionable as tortious interference.³² ONY, Inc., 720 F.3d at 490. The court based its affirmance on the findings that “(a) the article itself was not actionable and (b) [plaintiff] did not separately allege any additional misleading statements.” ONY, Inc., 720 F.3d at 490. Here, Plaintiff does not allege that the Shambolic Charade Deck misrepresented anything in the FDA Letters or in the PubPeer sources to which it cited. Defendants' more colorful, inflammatory republications of those conclusions, such as its reference to Cassava as a “charade,” do not rescue Plaintiff's claim.

32 While the plaintiff claimed tortious interference, its claim was based on the dissemination of alleged injurious falsehoods contained the press release. The district court held that as a result, the claim “sound[ed] in defamation.” ONY, Inc. v. Cornerstone Therapeutics, Inc., No. 11-CV-1027S, 2012 WL 1835671, at *6 (W.D.N.Y. May 18, 2012), aff'd, 720 F.3d 490 (2d Cir. 2013) (citing Cantor Fitzgerald, L.P. v. Peaslee, 88 F.3d 152, 157 (2d Cir. 1996)).

The Dot Com FDA Letter and PubPeer posts, which are clearly identified as the bases for this statement, concluded that Plaintiff fabricated or manipulated data and made false claims about simufilam. Characterizing Plaintiff's activities as a “charade” is an accurate representation of those conclusions. Accordingly, none of the statements in this category are actionable.

Second, Plaintiff challenges statements that would be understood by any reasonable reader to be statements of opinion. Gross, 82 N.Y.2d at 152. As an illustrative example, Plaintiff challenges the statement that “Cassava claims [s]imufilam is safe, but data suggests a cavalier attitude towards safety, a calculated avoidance of critical studies, and dependence on unreliable investigators.”³³Complaint ¶ 168. The qualifying language “suggests,” as well as the statement's inclusion of Plaintiff's contrary position that simufilam is safe, indicate that this statement is a statement of opinion. See Bellavia Blatt, 151 F.Supp.3d at 296. Context also indicates that it is an opinion. The statement appears in a presentation containing a disclosure of the authors' short positions in Plaintiff's stock and a disclaimer that “[o]ur analysis is entirely based on publicly available information and visible for everyone to see and challenge,” further indicating that the statement is an opinion. Shambolic Charade Deck at 4. See Silvercorp Metals Inc, 2012 WL 3569952, at *2.³⁴

33 Other examples of opinions in the Shambolic Charade Deck include statements that “[i]n our view, the failure of the original analysis was choregraphed [sic] to justify the analysis of samples by Dr. Wang's lab who could produce desirable outcomes,” and that various circumstances “call[] into question whether the investigators leading the [s]imufilam program are qualified to conduct the trial.” Complaint ¶¶ 210, 222.

34 The same characteristics also apply to the examples in footnote 33, which contain the phrases “in our view” and “call into question.” Id.

Third, Plaintiff challenges factual assertions that it does not allege are false. As an illustrative example, Plaintiff asserts that the statement “Cassava created exclusion criteria AFTER the data was analyzed .... Each assay had a customized mix of exclusion criteria applied .... As much as 40% of data was creatively removed” is defamatory. Complaint ¶ 222. But it does not allege, as it must to state a claim for defamation, that any of these three factual assertions is false.³⁵ To the extent that Plaintiff takes issue with the modifier “creatively,” a reasonable reader would clearly understand this statement to be the author's opinion of Plaintiff's exclusion criteria. As used here, the word “creatively” has no “precise meaning,” and is not capable of being “proven true or false.” Gross, 82 N.Y.2d at 153. Additionally, the context of this statement as described in the previous paragraph indicates that it is an opinion. Finally, Defendants describe the exclusion criteria that they characterize as “creative[],” allowing reader “an opportunity to evaluate the opinion, including whether the recited facts were sufficient to warrant it.” Chandok, 648 F.Supp.2d at 458.

35 Barring a false statement, a plaintiff may also state a claim for defamation by pleading that a factually true statement has a false defamatory implication. The Court addresses that argument below.

Accordingly, this statement is not actionable.³⁶

36 The presentation contains several other characterizations, which, like “creative,” cannot be proven true or false. For instance, the presentation states that Cassava has “Shady Players and Shady History,” “A Tormented Corporate History,” and an “Impotent, Conflicted Scientific Advisory Board,” and “inadequate and unreliable safety studies.” Complaint ¶¶ 161, 168. Like “creatively,” these descriptors have no precise meaning and are not capable of being proven true or false. Cf. Carey v. Carey, 160 N.Y.S.3d 854 (N.Y. Sup. Ct.) (“Words like ‘sketchy' and ‘questionable' lack precise meanings and express [the defendant's] opinion of plaintiff's acquaintances.”). In the context of the presentation, a reasonable reader would understand these descriptors as the authors' opinions. The presentation sets forth the facts on which those opinions are based, including why it considers Plaintiff's safety studies inadequate and unreliable.

ii. SavaDX Deck

Plaintiff also challenges three statements in the SavaDX Deck: “We find the implied MOA and scientific rationale . . . Laughably unsubstantiated . . . Inconsistent with Cassava claims so far . . . Contrary to FlnA functions in literature”; “Discovered emails suggest numbers totally fabricated = Fraud?”; and “SavaDX Exposed: A revolutionary diagnostic for Alzheimer's Disease or a scam of scientifically illiterate investors?” Complaint ¶¶ 161, 252.

Each of these statements constitutes a non-actionable opinion. The first signals it is an opinion by beginning with the phrase “we find.” See Bellavia Blatt, 151 F.Supp.3d at 296. The second is phrased as a question rather than an assertion, and it appears in a bulleted list alongside factual assertions that are conspicuously not phrased as questions. See SavaDX Deck at 16. See, e.g., Sandals Resorts International Ltd., 925 N.Y.S.2d at 414-415 (finding that a communication “replete with rhetorical questions . . . indicate[d] that the writer is expressing his or her personal views.”). The third, also phrased as a question, is the title of the presentation, setting a conjectural tone for the entire presentation. See, e.g., Brimelow v. New York Times Co., No. 20 CIV. 222 (KPF), 2020 WL 7405261, at *11 (S.D.N.Y. Dec. 16, 2020) (considering that “the overall tone of the article is one of commentary rather than neutral” factual reporting in finding that a statement therein would be understood as an opinion), aff'd, No. 21-66-CV, 2021 WL 4901969 (2d Cir. Oct. 21, 2021) (summary order). The broader context of the slide deck also indicates that these statements are opinions. The SavaDX Deck is posted on the Dot Com Defendants' websites along with the Dot Com FDA Letter and containing opinions and scientific inference. Accordingly, none of the statements are actionable.³⁷

37 Plaintiff also argues that the Dot Com Slide Decks are actionable mixed opinion because they are based on false underlying facts. Third Opposition at 14-15. However, once again, Plaintiff points only to scientific inferences and opinions with which it disagrees, rather than factual assertions. Therefore, Plaintiff has failed to adequately plead that any of the statements in the Dot Com Slide Decks are actionable mixed opinion.

iii. Seeing through the Blind Deck

Finally, Plaintiff challenges four statements in the Seeing Through the Blind Deck. Two of the statements posit that the Open Label study, in spite of Plaintiff's public representations, was not double-blind. The other statements speculate that Plaintiff's Phase 2b Study may have also not been double-blind. The Court finds that the statements regarding the Phase 2b Study would have been understood as opinions by any reasonable reader and are therefore non-actionable. However, the statements regarding the Open Label Study are more ambiguous and are therefore actionable. Nevertheless, because Plaintiff has failed to adequately plead actual malice, Plaintiff has still failed to state a claim for defamation with respect to those statements.

1. Open Label Study Statements

The Seeing Through the Blind presentation states that “[e]mails show both Cassava & Wang were NOT BLINDED during the open-label study .... Emails retrieved from a FOIL request to CUNY expose Cassava and the Wang Lab as being unblinded during sample analysis, prior to data presentation and while study is ongoing.” Seeing through the Blind Deck at 5. It also states that “Hence, whether a patient is ON or OFF the drug is known to the person analyzing samples.” Seeing Through the Blind Deck at 6. It accompanies this claim with graphics and two screenshots of the FOIL material. See id. Applying the Gross framework, the Court finds that a reasonable reader might interpret these statements as factual assertions. The statements contains no qualifying language, nor do any of the other statements in this deck that posit that the study was not doubleblind. The assertion that Dr. Wang was “reveal[ed]” to be unblinded during the Open Label Study is juxtaposed against other statements, both in this slide deck and others on the Dot Com Defendants' websites, that are posed as questions or couched in qualifying and conditional language. Accordingly, a reasonable reader could interpret this statement as a factual assertion.

Plaintiff has adequately pleaded that this statement is defamatory under New York Law. Elias, 872 F.3d at 104. As to the first factor, Plaintiff alleged that the statement is false by alleging that contrary to Defendants' assertion, “[t]he testing results published by Cassava were done by individuals who were ‘blind' to whether they were analyzing samples from a patient who took a placebo or simufilam.” Complaint ¶ 157. As to the second, Plaintiff alleged that the statement was “published to a third party” by alleging that the Seeing through the Blind Deck was posted to the Dot Com Defendants' public websites. Elias, 872 F.3d at 104. As to the third, Plaintiff has adequately pleaded that the statement is not “privilege[ed]” as an opinion or otherwise. Id. Finally, Plaintiff has adequately pleaded that the statement is “one of the types of publications actionable regardless of harm.” Id.

“New York recognizes a limited category of statements to be libelous per se which do not require pleading and proof of special damages.” Davis v. Ross, 754 F.2d 80, 82 (2d Cir. 1985). “If a statement is defamatory per se, injury is assumed” and no special damages need be alleged. Celle v. Filipino Rep. Enterprises Inc., 209 F.3d 163, 179 (2d Cir. 2000). “The line between statements that are defamatory per se and those that require proof of special damages remains fuzzy.” Id. However, “[o]ne useful general rule is that ‘a writing which tends to disparage a person in the way of his office, profession or trade' is defamatory per se and does not require proof of special damages.” Id. A related rule is that ‘[w]here a statement impugns the basic integrity or creditworthiness of a business, an action for defamation lies and injury is conclusively presumed.'” Id. (quoting Ruder & Finn Inc. v. Seaboard Surety Co., 52 N.Y.2d 663, 439 (1981)).

For a statement to qualify as one that tends to injure another in his or her “trade, business, or profession”-in other words, per se defamation-the statement “must be made with reference to a matter of significance and importance for [the operation of the business], rather than a mere general reflection upon the plaintiff's character or qualities.” Liberman v. Gelstein, 80 N.Y.2d, 429, at 436 (1992). The allegedly defamatory statement must be targeted at the specific standards of performance relevant to the plaintiff's business and must impute conduct that is “of a kind incompatible with the proper conduct of the business, trade, profession or office itself.” Id.; see also Van-Go Transp. Co. Inc. v. New York City Bd. of Educ., 971 F.Supp. 90, 98 (E.D.N.Y. 1997) (“Reputational injury to a person's business, or to a company, consists of a statement that either imputes some form of fraud or misconduct or a general unfitness, incapacity, or inability to perform one's duties.”).

Here, the defamatory statements accused Plaintiff of lying to the public and to regulators about the parameters of a clinical trial for its lead drug candidate. Such behavior would amount to scientific fraud, which is plainly “incompatible with the proper conduct” of a biotechnology company. Liberman, 80 N.Y.2d at 436. Accordingly, Defendants' statements about the Open Label Study are defamatory. However, as discussed below, Defendants have not stated a claim for defamation because they have failed to adequately plead that the statements were published with actual malice.

2. Phase 2b Study Statements

Particularly juxtaposed against the statements about the Open Label Study, any reasonable reader would interpret the statements speculating that the Phase 2b Study was not double-blind as statements of opinion. After asserting that the Dr. Wang was not blinded during the Open Label Study, the presentation asks, “[w]as he unblinded for the entire [Phase 2b Study]? .... If Cassava is lying about blinded analysis now, were they lying about it the whole time?” Seeing through the Blind Deck at 15. It concludes based on the FOIL email evidence not that the Phase 2b Study was unblinded, but that there is a “risk” of data manipulation. Id. at 9; see, e.g., Sandals Resorts International Ltd., 925 N.Y.S.2d at 414-15; Frascatore v. Blake, 344 F.Supp.3d 481, 498 (S.D.N.Y. 2018) (“|T]he language of speculation-that [the author] ‘wonder[s]” whether there are more complaints-is conjectural and not susceptible to an interpretation that it is a statement conveying facts.”).

Nor do these statements qualify as actionable mixed opinion. The presentation made clear that the authors based their opinions on emails obtained via FOIL. Seeing through the Blind Deck at 5. The presentation contained screenshots of these emails and hyperlinks to the others. Plaintiff does not allege that the emails are falsified or that any of the other asserted facts on which these opinions are based are false. Accordingly, the statements in this category are non-actionable.

E. Defamation by Implication

Plaintiff argues that even if none of the scientific inferences, opinions, factual statements, or summaries in the FDA Letters, QCM Report, Dot Com Slide Decks, or Grego Interview explicitly communicated defamatory messages, they had “defamatory implication|s].” See, e.g., First Objections at 13. Specifically, Plaintiff claims that the challenged statements “imply” that Plaintiff “is a fraud,” that Plaintiff made false scientific claims, that Plaintiff engaged in data manipulation or fabrication, that Plaintiff has not tested simufilam for safety, that Plaintiff is untrustworthy due to its involvement with people who have been accused or convicted of criminal activity, and that Plaintiff's executives engage in insider trading. Complaint ¶¶ 161, 168, 174, 258, 266, 273. The Court finds that Plaintiff has not stated a claim for defamation under the theory of defamation by implication either.

“Neither the New York Court of Appeals nor the Court of Appeals for the Second Circuit has addressed the proper standard for defamation by implication, let alone its finer contours.” Cohen v. Walcott, No. 13-CV-9181 (JGK), 2017 WL 2729091, at *5 (S.D.N.Y. June 23, 2017) (citing Biro v. Conde Nast, 883 F.Supp.2d 441, 466 (S.D.N.Y. 2012)). The prevailing pleading standard requires an “especially rigorous showing that (1) the language may be reasonably read to impart the false innuendo, and (2) the author intends or endorses the inference.” Biro, 883 F.Supp.2d at 466. “The alleged innuendo may not enlarge upon the meaning of words so as to convey a meaning that is not expressed.” Id. (citations and quotations omitted). However, where the author is expressing an opinion, “[s]imply looking to whether the author intended or endorsed the inference is limited in its helpfulness.” Id. at 467. Because “the Constitution protects an author's right to draw an explicit conclusion from fully disclosed facts, then an unstated inference that may arise in a reader's mind after reading such facts is also protected as an implicit expression of the author's opinion.” Id. at 468. Therefore, where “the implication is simply reflective of the author's opinion based on the facts set forth,” a plaintiff cannot state a claim for defamation by implication. Id.

With respect to the claimed implications that Plaintiff did not test simufilam for safety, Plaintiff has failed to make the “rigorous showing” that any of the challenged statements could be reasonably read to imply that innuendo, let alone that the Neuroscientist Defendants intended to imply it. Biro, 883 F.Supp.2d at 466. The communications that Plaintiff claims contain the implication that Cassava did not test for simufilam for safety in fact acknowledge that it did. For instance, Plaintiff complains about a statement referencing “inadequate and unreliable safety studies.” Complaint ¶ 168. Implicit in that statement is that Cassava did conduct safety studies. Whether those studies were “inadequate and unreliable” is a matter of opinion, and as discussed above, the Court has determined that any reasonable reader would interpret the challenged statements in this communication as statements of opinion.

The other claimed implications are “simply reflective of the author's opinion based on the facts set forth” and therefore are not actionable. Biro, 883 F.Supp.2d at 468 . As described, the FDA Letters, QCM Report, Dot Com Slides Decks, and Grego Interview contained various opinions and scientific conclusions. Many of those opinions and scientific conclusions are more nuanced than the messages that Plaintiff claims they imply.³⁸ For instance, Defendants expressed that the limitations of methodologies employed in certain simufilam studies “raise[d] troubling questions” about Plaintiff's claims about simufilam. Complaint ¶ 174. They described anomalies in Western blots and posited that the images “appear[ed] to” show indications of manipulation. Id. ¶ 179. They hypothesized that the criminal histories of some of Plaintiff's associates “does not bode well for the legitimacy of the Simufilam trials and may explain the irregularities that we have identified earlier.” Id. ¶ 265. As signaled by their conditional language (“questions,” “appears,” “may”), and their context, discussed previously, some of these statements are protected statements of opinion. The others, as discussed previously, appear in the FDA Letters and are protected scientific conclusions. Additionally, as described previously, these opinions and scientific conclusions are accompanied by a recitation of the facts or data on which they purport to be based. To the extent that Plaintiff challenges those factual recitations as carrying defamatory implications, those implications are also “protected as an implicit expression of the author's opinion.” Biro, 883 F.Supp.2d at 468.

38 The Court notes that Plaintiff asserts that several of the challenged statements imply that Plaintiff's executives engaged in insider trading. See Complaint ¶ 273. Because those statements could not conceivably be read to imply that Plaintiff's executives engaged in insider trading or even sold Plaintiff's stock at all, the Court infers that Plaintiff means instead to claim that those statements implied that Plaintiff's executives misled investors. This implication is “simply reflective of the author's opinion based on the facts set forth” and therefore the statements are not actionable. Biro, 883 F.Supp.2d at 468.

A. Tweets

Plaintiff also challenges nearly one thousand tweets made on X by QCM and the Dot Com Defendants. The Court concludes that Plaintiff has adequately pleaded that some of the tweets were defamatory. However, because Plaintiff has failed to plead that Defendants published those tweets with actual malice, it has failed to state a claim for defamation.

i. Defamatory Connotation

The Court has analyzed each of the tweets individually. As an initial matter, while the context of each challenged tweet is crucial to the Court's analysis, Plaintiff has alleged almost no facts regarding their context. See Gross, 82 N.Y.2d at 153 (discussing the importance of context to an analysis of an allegedly defamatory statement); Levin, 119 F.3d at 195 (same). With respect to all but a few dozen of the challenged tweets, Plaintiff alleges only the posting date, author, and the text of the tweet.³⁹ Had any party provided exhibits showing the context in which each tweet appeared- for instance, the other posts the tweet appeared alongside on the author's X page, the tweet that a challenged tweet responded to, or the thread in which a challenged tweet appeared-the Court would have evaluated each statement in its full context. See Ganske v. Mensch, 480 F.Supp.3d 542, 545 (S.D.N.Y. 2020) (finding it proper for the court to consider defendant's exhibit displaying the context of an allegedly defamatory tweet) (“[T]o look only at the Tweet-rather than all three tweets posted during this twenty-minute span-would not provide the necessary or proper context for understanding Defendant's statements that morning.”). Because neither party provided this information, the Court is tasked with considering each challenged tweet in isolation, rather than in the full context of the particular thread or X profile in which it appeared.

39 Plaintiff alleges additional facts about a small fraction of the tweets, in footnotes to Appendix A, and the Court has considered that context.

Analyzing each tweet individually, the Court finds that Plaintiff has failed to adequately plead defamation with respect to the majority of the challenged tweets. Hundreds of the tweets do not mention Cassava, simufilam, or SavaDX. On their face, lacking context, many of these tweets are not pleaded to be “of and concerning” Plaintiff. Elias, 872 F.3d at 104. For instance, Plaintiff challenges a QCM tweet that reads simply “[t]his looks damning to us” and a tweet by one of the Dot Com Defendants that reads “very well, from now on I shall call it a scientific fraud, that I think I have proven. All good now.” Dkt. No. 30-2 (“Appendix A”) at 9, 11. These tweets may relate to Plaintiff, but Plaintiff does not plead that fact. The Court is required to construe Plaintiff's pleading generously, but it cannot create facts that Plaintiff has chosen not to present.

Other tweets could not reasonably be subject to a defamatory meaning because they have no clear meaning lacking additional context. For instance, Plaintiff challenges a tweet by Enea Milioris that says only “$SAVA mental gymnastics.” Id. at 15; see Lan Sang, 951 F.Supp.2d at 518 (holding that a court may not “strain” to interpret statements in their most defamatory sense). Still other tweets are non-actionable because any reasonable reader would understand them as opinion statements that set forth the facts on which they are based, either in the tweet or via a link. For instance, Plaintiff challenges a tweet that “[n]o, the short thesis is that nearly everything Cassava has ever done is largely faked” and links to Cassavafraud.com, which contains the Dot Com FDA Letter and slide decks. Appendix A at 3.

However, the Court finds that QCM and each of the Dot Com Defendants published defamatory tweets (the “Defamatory Tweets”). Those include,

• “$SAVA remains a complete scientific fraud that is going to have its rug pulled any day, and Mr. Market knows it.” - Adrian Heilbut;

• “How is it legal for $SAVA to spinal tap folks and then just make up their biomarker values?” - Eneas Milioris;⁴⁰

• “Either $sava has been lying to us for months about having the blots or they submitted faked evidence to the Journal of Neuroscience.” - Jesse Brodkin;

• “It is precisely FOR those humans taking [s]imufilam that we are fighting! I believe it is unethical and counterproductive to give false hope and profit from that!!! Placebo can be had otherwhere and just as effectively. We should be exploring REAL treatments!” - Patrick Markey;⁴¹

• “$SAVA you have been caught red handed! Stop the trials and spare the patients your useless treatment! #Savastoptheuselesstrials #savastopthetrials” - QCM.

Appendix A at 9, 22, 42, 60.⁴²

40 While this tweet is phrased as a question, it is not a question of whether Plaintiff “spinal tap[ped] folks and then just ma[d]e up their biomarker values” but how it was legal for Plaintiff to do so.

41 While this statement contains qualifying and imprecise language, which can indicate an expression of opinion, none of that language is applied to the defamatory statement that simufilam is no more effective than a placebo.

42 A full list of the tweets that the Court holds are actionable, based on the limited allegations before it and construing the tweets in the light most favorable to Plaintiff, is appended to this opinion as Exhibit A. That list includes mixed opinions that imply a basis in facts not disclosed to the reader, as well as factual assertions that Plaintiff has alleged are false. The Court emphasizes that contextual allegations, such as allegations about the thread in which a challenged tweet was posted, allegations about other tweets that the author posted in close proximity to a challenged tweet, or allegations about the author's X profile might impact each of those determinations. Lacking those contextual allegations, the Court examined each tweet in isolation. In the few cases that Plaintiff alleged additional facts about a tweet in a footnote to its Appendix A, the Court considered those allegations.

The Defamatory Tweets either directly accused Plaintiff of scientific misconduct, stated that simufilam was not effective, or heavily intimated that Plaintiff was engaged in fraudulent behavior. See Biro, 883 F.Supp.2d at 466 (holding that a plaintiff can adequately plead that a statement is defamatory if “(1) the language may be reasonably read to impart the false innuendo, and (2) the author intends or endorses the inference”). Many of the Defamatory Tweets were not hedged with qualifying or conditional language, and Plaintiff did not allege any contextual facts about them, other than the fact that they were posted on X, that would indicate that they were opinions.

Defendants argue that statements on X are readily understood as statements of opinion, and it is true that courts often find tweets non-actionable. See, e.g., Ganske v. Mensch, 480 F.Supp.3d 542, 552-553 (S.D.N.Y. Aug. 20, 2020) (finding that tweets were not actionable in part because X is a forum “equally-if not more-informal and freewheeling” than many other locations on the internet, and tweets were “generally informal and unedited” and given less credence by readers) (internal quotations omitted). But “[w]eb content, like all content, must be assessed on a case by case basis.” Eros Intern. PLC v. Mangrove Partners, 2019 WL 1129196 at *9 (N.Y. Sup. Ct. 2019), aff'd, 140 N.Y.S.3d 518 (1st Dep't 2021). “Although several years ago it was suggested that ‘readers give less credence to allegedly defamatory remarks published on the Internet than to similar remarks made in other contexts,' this observation, even if it is assumed to be true, should not be read to ‘immunize [content] the focus and purpose of which are to disseminate injurious falsehoods about their subjects ....'” Id. (quoting Silvercorp Metals Inc., 2012 WL 3569952 at *2 and Sandals Resorts International, 925 N.Y.S.2d at 416).

Other Defamatory Tweets were phrased in a way that a reasonable reader would interpret as opinion or speculation, but lacked a recitation of the facts on which they were based. For instance, Jesse Brodkin tweeted, “[i]t looks like $sava may be doing some sketchy patient selection in their OL clinical trial... I know, it's shocking.” Appendix A at 63. A reasonable reader would understand this statement as an opinion because it uses conditional phrasing (“may,” “looks like”) and is posted on X. But on its face, lacking context, the tweet implies that it is based on undisclosed facts. Accordingly, it is actionable as a mixed opinion. See Chau, 771 F.3d at 129.

Plaintiff adequately pleads the remaining elements of defamation by alleging that the Defamatory Tweets are false because Plaintiff has not committed scientific misconduct and simufilam is effective, and by alleging that the tweets were published on X. Elias, 872 F.3d at 104. In addition, because all of the Defamatory Tweets accused Plaintiff of lying, scientific fraud, or criminal conduct, or asserted that its technology lacked scientific support, they are defamatory per se and do not require proof of special damages. Celle, 209 F.3d at 179.

Therefore, Plaintiff has adequately pleaded that the Defamatory Tweets, a subset of the challenged tweets published by QCM and the Dot Com Defendants, are defamatory. However, Plaintiff has nonetheless failed to state a claim for defamation against any of these defendants because it has failed to adequately plead actual malice.

ii. Actual Malice

Though Plaintiff adequately pleaded that the Dot Com Defendants published a number of defamatory tweets, it failed to adequately plead that they did so with actual malice. As an initial matter, the Court finds that Plaintiff is a limited purpose public figure with respect to simufilam research and therefore is required to plead actual malice. A plaintiff's “status as [a] public or private figure[] determines the standard of fault that [he] must establish to succeed on [his] claims.” Contemporary Mission v. N.Y. Times Co., 842 F.2d 612, 617 (2d Cir. 1988). “[A] state cannot award damages to a [public figure] for defamatory statements . . . absent a showing that the statements were published with ‘actual malice.'” Id. In its ruling in Gertz v. Robert Welch, 418 U.S. 323, 352 (1974), “the Court indicated that parties who are not public figures for all purposes may still be public figures with respect to a particular controversy.” Contemporary Mission, 842 F.2d at 617. To establish that a plaintiff is a limited purpose public figure, “[a] defendant must show the plaintiff has: (1) successfully invited public attention to his views in an effort to influence others prior to the incident that is the subject of litigation; (2) voluntarily injected himself into a public controversy related to the subject of the litigation; (3) assumed a position of prominence in the public controversy; and (4) maintained regular and continuing access to the media.” Id. (quoting Lerman v. Flynt Distrib. Co., 745 F.2d 123, 136-137 (2d Cir. 1984)); see also Prince v. Intercept, 634 F.Supp.3d 114, 138 (S.D.N.Y. 2022) (finding that it was clear on the face of the pleadings that the plaintiff was a limited-purpose public figure).

Here, Plaintiff's allegations and exhibits demonstrate that it satisfies all four factors of this test. First, Plaintiff has invited public attention to its views in attempt to influence others for years before Defendants made any allegedly defamatory statements. Plaintiff alleges that it published journal articles and press releases and presented at industry conferences about simufilam and Alzheimer's research. See, e.g., Biro, 963 F.Supp.2d 255, 271 (S.D.N.Y. 2013) (finding the first factor of the test met) (“The very purpose of writing articles in scientific journals, lecturing at universities, and opining in news shows and documentaries is to influence public discourse.”) (collecting cases).

Second, Alzheimer's research and the efficacy of drug candidates, and Plaintiff's promotion of novel research on simufilam and its foundations in particular, qualify as “public controvers[ies]” in which Plaintiff voluntarily took part by publishing journal articles and promoting simufilam. See Chandok v. Klessig, 648 F.Supp.2d 449, 458-459 (N.D.N.Y. 2009) (finding that a scientist created a public controversy by publishing articles with novel science in peer-reviewed journals) (“Scientific articles are inherently subject to robust criticism, and for good reason....The controversy, with regard to a published article, extends not only to its direct subject matter and conclusion, but necessarily to the competence and integrity of the author.”); Park v. Capital Cities Commc'ns, Inc., 585 N.Y.S.2d 902, 905 (4th Dep't 1992) (finding that a doctor who described himself as a “champion” of novel eye surgery techniques was a public figure for the purposes of a broadcasted surgery); Winklevoss v. Steinberg, 96 N.Y.S.3d 561, 562 (1st Dep't 2019) (finding that the plaintiffs were limited purpose public figure because they “voluntarily injected themselves into the world of investing”).

Third, Plaintiff assumed a position of prominence in the public controversy about simufilam, as its developer, and in the field of Alzheimer's drug research in general, as a company with a widely known drug candidate, many published studies, and presentations at conferences. C.f. Biro, 963 F.Supp.2d at 275 (finding that the plaintiff assumed a prominent role in the controversy by positioning himself as a leading expert in the field) (collecting cases). Fourth, Plaintiff maintained regular and continuing access to the media. It alleges that it published journal articles, issued SEC filings, and participated in industry conferences. Its exhibits also demonstrate that it issued a flurry of press releases in response to the allegedly defamatory statements in this case. Accordingly, the pleadings establish that Plaintiff was a limited purpose public figure with respect to simufilam research and is required to plead actual malice in order to survive a motion to dismiss.

Because Plaintiff is a limited purpose public figure, it must plead that each allegedly defamatory statement “was made with actual malice, that is, made ‘with knowledge that it was false or with reckless disregard of whether it was false or not.'” Church of Scientology Int'l v. Behar, 238 F.3d 168, 173-174 (2d Cir. 2001) (quoting Sullivan, 376 U.S. at 280). “Despite its name, the actual malice standard does not measure malice in the sense of ill will or animosity, but instead the speaker's subjective doubts about the truth of the publication.” Id. at 174. “If it cannot be shown that the defendant knew that the statements were false, a plaintiff must demonstrate that the defendant made the statements with reckless disregard of whether they were true or false.” Id. “The reckless conduct needed to show actual malice ‘is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing,' but by whether there is sufficient evidence ‘to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication.'” Id. (quoting St. Amant v. Thompson, 390 U.S. 727, 731 (1968)) (citation omitted).

“Although actual malice is subjective, a court typically will infer actual malice from objective facts.'” Celle v. Filipino Reporter Enters., 209 F.3d 163, 183 (2d Cir. 2000) (quoting Bose Corp. v. Consumers Union of United States, Inc., 692 F.2d 189, 196 (1st Cir. 1982), aff'd, 466 U.S. 485 (1984)). “These facts should provide evidence of ‘negligence, motive and intent such that an accumulation of the evidence and appropriate inferences supports the existence of actual malice.'” Id. (quoting Bose Corp., 692 F.2d at 196) (emphasis in the original).

The Supreme Court found the following factors to be relevant to a showing that the defendant harbored actual malice: (1) whether a story is fabricated or is based wholly on an unverified, anonymous source, (2) whether the defendant's allegations are so inherently improbable that only a reckless person would have put them in circulation, or (3) whether there are obvious reasons to doubt the veracity of the informant or the accuracy of his reports.

Id. (citing St. Amant, 390 U.S. at 732).

Plaintiff has failed to adequately plead that the Dot Com Defendants or QCM Defendants published their defamatory tweets with actual malice. Plaintiff makes various assertions in support of either the second or third Amant factors: (1) that Defendants and their sources⁴³ were biased against Plaintiff or had a motive to defame Plaintiff, (2) that Defendants did not meet with Plaintiff or certain other knowledgeable people to investigate their concerns before publishing their statements, (3) that Defendants had access to “contradictory information” when they published their statements, (4) that “common knowledge in the scientific community” contradicted Defendants' beliefs, and (5) that other circumstances, including Plaintiffs' receipt of grants, publications of its research in peer-reviewed journals, and approval from regulators made Defendants' statements “inherently improbable.”⁴⁴ Complaint ¶ 347. But the Court finds these assertions unpersuasive. Taken together, Plaintiff's copious allegations fail to rise to the “accumulation of the evidence and appropriate inferences” necessary to adequately plead actual malice. Celle, 209 F.3d at 183.

43 Here, Defendants' sources for their tweets include the FDA Letters, Dot Com Slides, QCM Report, and the sources on which those publications were based.

44 Plaintiff makes several other unpersuasive arguments in support of a finding of actual malice. It asserts that Defendants had “no support” for their accusations, which courts have found may contribute to a plausible inference of actual malice. Third Opposition at 17 (citing Sharon v. Time, Inc., 599 F.Supp. 538, 584 (S.D.N.Y. 1984)). But this assertion is plainly contradicted by the facts alleged in the Complaint. The support for the allegedly defamatory tweets was the exhaustive research and analysis in the FDA Letters, Dot Com Slide Decks, and QCM Report. Plaintiff also points to Defendants' repetition and republication of their claims. It is true that under “certain circumstances evidence of a refusal by a publisher to retract a statement after it has been demonstrated to him to be both false and defamatory . . . might be relevant in showing recklessness at the time the statement was published. Celle, 209 F.3d at 187 (cleaned up). But here, Plaintiff has not adequately pleaded that Defendants had reason to entertain “serious doubts as to the truth of [their] publication[s],” Defendants' repetition and republication has limited relevance to the Court's analysis of actual malice. Church of Scientology Int'l, 238 F.3d at 174.

1. Motive and Bias

Plaintiff's allegations of motive and bias provide little if any support for an inference of actual malice. While “it cannot be said that evidence concerning motive . . . never bears any relation to the actual malice inquiry . . . courts must be careful not to place too much reliance on such factors.” Harte-Hanks Commc'ns v. Connaughton, 491 U.S. 657, 668 (1989) (holding that evidence of a profit motive for the defendant's defamatory statements was insufficient, standing alone, to support a finding of actual malice); see also Sharon v. Time, Inc., 599 F.Supp. 538, 583 (S.D.N.Y. 1984) (“[B]ias on the part of sources does not necessarily create an issue of actual malice.”).

Plaintiff claims that Defendants' short positions in Plaintiff's stock gave them an improper motive to make defamatory statements about Plaintiff. But the short positions on their own do not support a showing of actual malice. The short positions could be viewed to support the contrary inference of Defendants' genuine conviction that Plaintiff's stock was overvalued rather than undermine it. While the short position plausibly created a profit motive to publicize the short seller's critiques, that does not lead the Court to infer that they did not subjectively believe those critiques. See Biro v. Conde Nast, 963 F.Supp.2d 255, 278 (S.D.N.Y. 2013) (“[T]he operative question is whether a defendant failed to investigate in the face of actual, subjective doubts.”) (emphasis added). After all, by shorting the stock, Defendants put their money behind their belief that the stock is overvalued.

Plaintiff also asserts a variety of reasons why Defendants' sources, including Dr. Bredt and various consultants hired by Defendants, may have been biased. Plaintiff asserts that “Dr. Bredt is the named inventor on a neurobiology patent that may compete with Cassava ....” and that “Dr.

Bredt has also been affiliated with companies . . . that directly compete with Cassava.” Complaint ¶ 385 (emphasis added). Such tenuous allegations are insufficient to raise an inference that at the time he published his statements, Defendant Bredt stood to personally benefit from the depreciation of Plaintiff's stock or that he harbored bias against Plaintiff, and therefore they have little bearing on the Court's analysis of actual malice. For the same reason, Plaintiff's allegations that some of Defendants' sources acted as consultants for “competitor” drug pharmaceutical companies at unspecified times also does not raise an inference that they had a bias against Plaintiff when they provided their critiques of Plaintiff's research. Id. Plaintiff also alleges that “one or more” of the donors to a website run by one consultant, Dr. Bik, that is funded by reader donations and that investigates scientific fraud “is a Defendant, affiliated with a Defendant, and/or affiliated with other short sellers of Cassava stock.” Id. Plaintiff does not plead that Dr. Bik was aware of the donation or the donor's identity, and this allegation is too vague to raise an inference of bias. Moreover, “biases do not establish actual malice without additional facts to suggest the speaker acted pursuant to that bias.” McDougal v. Fox News Network, LLC, 489 F.Supp.3d 174, 185 (S.D.N.Y. 2020) (citing Palin v. N.Y. Times Co., 940 F.3d 804, 814 (2d Cir. 2019)). Plaintiff does not allege such facts here. Accordingly, Plaintiff's allegations do not suffice to support an inference of actual malice.

2. Failure to Investigate

Plaintiff's allegations that Defendants did not raise their concerns with Plaintiff's board, executives, scientists, or employees before airing their concerns publicly also provide scant support for an inference of actual malice.⁴⁵ “[P]urposeful avoidance of the truth” can support a finding of actual malice. Harte-Hanks, 491 U.S. 657, 692 (1989). But “failure to investigate before publishing, even when a reasonably prudent person would have done so, is not sufficient to establish reckless disregard.” Id. Accordingly, courts have found that a plaintiff “cannot establish actual malice on the basis that . . . [a] defendant[] declined to consider plaintiff['s] account of the events.” Hodges v. Lutwin, No. 22-974, 2023 WL 3362836, at *4 (2d Cir. May 11, 2023) (collecting cases).

45 Plaintiff also alleges that Defendants failed to consult with an “independent researcher” at Yale University who “published test results showing biological activity for simufilam.” Complaint ¶ 350. The Court infers that researcher authored the study titled “Filamin A Inhibition Reduces Seizure Activity In a Mouse Model of Focal Cortical Malformations.” Complaint ¶¶ 311, 350. That study is also attached to the Complaint as an exhibit. Dkt. No. 37-10. While the Court has reviewed the study-without the benefit of any guidance from Plaintiff about which particular portions or conclusions of the study are relevant to its claims-the Court could not determine that any of the conclusions of the study contradicted Defendants' claims. The study found that inhibiting filamin A reduced seizure activity in mice, not that simufilam or inhibition of filamin A was effective at treating Alzheimer's in humans. The Court also notes that Dr. Burns is listed as an author on the allegedly “independent” study. It is unclear precisely what Plaintiff means by “showing biological activity for simufilam,” or why that finding would have conflicted with Defendants' beliefs such that Defendant might have seen any benefit in consulting with the researcher.

By the time Defendants published the Defamatory Tweets, Defendants had already had the opportunity to consider Plaintiff's account. The tweets began in November of 2021. See Appendix A at 2. By that time, Plaintiff had issued multiple press releases denying wrongdoing or data errors in response to the FDA Letters. In its FDA Letter, the Dot Com Defendants also explicitly invited Plaintiff to respond to dozens of questions to allay their concerns, and Plaintiff does not allege that it did. Finally, Plaintiff's pleadings and the documents incorporated into their pleadings describe the intensive investigations that Defendants undertook to develop the QCM Report, Dot Com Slide Decks, and FDA Letters, which describe the bases for the beliefs expressed in the challenged tweets. Plaintiff alleges that QCM consulted with multiple scientists to create the QCM Report, and the QCM Report, Dot Com Defendants' Slide Decks, and FDA Letters, incorporated into the Complaint, themselves contain extensive research. See Church of Scientology Int'l v. Behar, 238 F.3d 168, 174 (2d Cir. 2001) (finding that a defendant's extensive investigation cut against a finding of actual malice). Therefore, Plaintiff has failed to raise a plausible inference of an insufficient investigation, let alone purposeful avoidance of the truth.

3. Contradictory Information

Plaintiff's allegations that Defendants had access to information that “contradicted” the challenged tweets or the sources on which those challenged tweets were based similarly do not support an inference of actual malice. Plaintiff claims that its SEC filings and press releases “contain information contradicting Defendants' false and defamatory statements.” Complaint ¶¶ 303-305. But a finding of actual malice “cannot be predicated on mere denials, however vehement; such denials are so commonplace in the world of polemical charge and countercharge that, in themselves, they hardly alert the conscientious reporter to the likelihood of error.” Edwards v. Nat'l Audubon Soc'y, 556 F.2d 113, 121 (2d Cir. 1977); see also Baiul v. Disson, 607 Fed.Appx. 18, 21 (2d Cir. 2015) (finding that such denials provide “limited” circumstantial evidence of actual malice). Denials are of especially limited value in this case, given that Defendants expressed concerns that Plaintiff may be engaging in a years-long pattern of coordinated dishonesty.

Plaintiff's allegations that other members of the scientific community published statements disagreeing with Defendants' sources for the Defamatory Tweets also do little to support an inference of actual malice on these facts. That is because nearly all of the contrary statements referenced in the Complaint were published after Defendants articulated their critiques of Plaintiff's work.⁴⁶ Plaintiff alleges that the Dot Com Defendants registered the domain names cassavafraud.com and simuflimflam.com in late October 2021 and that QCM published the QCM Report in November 2021. Plaintiff points only to one statement before late October 2021, a blog post by a researcher who voiced disagreement with the Neuroscientist Defendants' first FDA Letter. Even assuming that Defendants were aware of that statement before they first expressed the claims underlying the defamatory tweets, one or two contrary opinions would have been insufficient to cause Defendants to “serious[ly] doubt,” or doubt at all, their beliefs. St. Amant, 390 U.S. at 731. This is particularly true given the number of Defendants in this case, in addition to multiple consultants, who claimed to have come to the same conclusions. That Defendants continued to express those same beliefs, including in the Defamatory Tweets, after the other contrary opinions referenced in the Complaint were published, is insufficient to support an inference of actual malice.

46 Some of the alleged statements are undated. See Complaint ¶ 364.

Plaintiff also claims that Defendants had knowledge of published articles by other scientists “containing accurate information regarding the foundational science for the role of filamin protein in disease.” Complaint ¶ 311. But Plaintiff does not allege that the conclusions of those articles directly conflicted with any of the inferences or opinions contained in tweets or in the FDA Letters, Dot Com Slide Decks, QCM Report. Plaintiff alleges only that those studies “demonstrate[] a link between filamin A links and neurodegeneration, such as Alzheimer's disease” or “contain[ed] accurate information regarding the foundational science for the role of filamin protein in disease.” Complaint ¶¶ 178, 311. The Court observes that only one of the studies listed and attached as an exhibit to the Complaint tested simufilam,⁴⁷ and many did not draw conclusions about Alzheimer's, filamin A, or either one. Defendants' statements focused specifically on what they claimed were anomalous methodologies and results in Plaintiff's, Dr. Wang's, and Dr. Burns' studies. Defendants then posited that as a result of these alleged anomalies, Plaintiff's claims about simufilam, as well as the link between Alzheimer's and filamin A, were unreliable. Therefore, Plaintiff has failed to raise a plausible inference that the other studies it references conflicted with Defendants' beliefs.

47 The Court infers that the study titled “Filamin A Inhibition Reduces Seizure Activity In a Mouse Model of Focal Cortical Malformations” is the study Plaintiff refers to elsewhere in the Complaint as having been conducted by an “independent researcher” at Yale University and which “show[s] biological activity for simufilam” Complaint ¶¶ 311, 350. That study is also attached to the Complaint as an exhibit. Dkt. No. 37-10. While the Court has reviewed the study-without the benefit of any guidance from Plaintiff about which particular portions or conclusions of the study are relevant to its claims-the Court could not determine that any of the conclusions of the study contradicted Defendants' claims. The study found that inhibiting filamin A reduced seizure activity in mice, not that simufilam or inhibition of filamin A was effective at treating Alzheimer's in humans. The Court also notes that Dr. Burns is listed as an author on the allegedly “independent” study.

Plaintiff's allegations that Defendants had knowledge of articles published by other scientists that “followed a method similar to that used to test simufilam, including the use of post-mortem brain tissue,” similarly are afforded little weight. Complaint ¶ 314. Defendants did not state that the use of post-mortem brain tissue was an inherently unreliable methodology. They stated that the particular results that Plaintiff, Dr. Wang, and Dr. Burns claimed to obtain from the particular postmortem brain tissue methodologies they used in their studies were suspect. Plaintiff does not allege that the scientists who conducted those other studies claimed to obtain the same type of results, or even that they used the precisely the methods that Defendants questioned.⁴⁸ Accordingly, the Court affords little weight to Plaintiff's allegations regarding allegedly contradictory information.

48 Again, Plaintiff alleges only that the method was “similar.” Complaint ¶ 192. To the extent that Plaintiff attached dozens of studies to the Complaint with the expectation that the Court would compare the methodologies used by Dr. Burns, Dr. Wang, and Plaintiff to the methodologies used by other scientists and determine whether the latter conflicted with Defendants' critiques-particularly when the Complaint does not direct the Court to any specific sections of the articles-the Court agrees with Judge Wang's conclusion that Plaintiff's pleadings violate Fed.R.Civ.P. Rule 8(a). See First R&R at 22-23. Hundreds of pages of attachments, many of which are written in highly technical, specialized language rather than for a lay audience, fail to meet the standard of either “short” or “plain.” Fed.R.Civ.P. 8(a).

4. Common Knowledge in the Scientific Community

Plaintiff's allegations of common knowledge in the scientific community does not support an inference of actual malice analysis in this case. The crux of most of Plaintiff's allegations related to common knowledge is that Defendants knew that many of the alleged anomalies that they observed did not necessarily indicate data manipulation or errors. But an allegation that Defendants were aware of alternative explanations for some of their observations does not make the explanation at which they arrived “inherently improbable,” nor would it cause “serious doubt.” St. Amant, 390 U.S. at 731-732. This is particularly true given that Defendants purported to base their conclusions not on a single isolated anomaly, but on an alleged constellation of irregularities in results and suspect methodologies across many studies.

Plaintiff's remaining allegations of “common knowledge” relate to the widely accepted use of certain post-mortem brain tissue methodologies in neurology experiments. For instance, Plaintiff assert that “it was (and is) common knowledge in the scientific community that conducting tests on post-mortem human brain tissue that has been frozen and thawed is a well-published, accepted form of scientific inquiry.” Complaint ¶ 324. But as previously described, Defendants did not claim that the use of post-mortem, frozen, or matched pairs of brain tissue are inherently unreliable methodologies. Their claims were more nuanced. They asserted that the particular results that Plaintiff, Dr. Wang, and Dr. Burns claimed to obtain from the particular brain tissue methodologies they used in their studies were suspect. For instance, the FDA Letters stated that “[t]he complex, multi-step cellular processes the authors claim to observe in tissue that has been dead for a decade are contrary to a basic understanding of neurobiology” and that “[i]t is unlikely that the enzyme responsible for phosphorylation would survive the initial -80°C freezing step.” Complaint ¶ 189. Because the common knowledge Plaintiff alleges does not directly contradict Defendants' purported beliefs, it does not raise a plausible inference that Defendants' statements were “inherently improbable.” St. Amant, 390 U.S. at 732.

5. Other Circumstances

Finally, Plaintiff claims that a number of other circumstances made Defendants' beliefs “inherently improbable.” Complaint ¶ 347. Plaintiff alleges that Cassava raised hundreds of millions of dollars, won research grants, survived scrutiny by regulatory agencies, and published its studies in peer-reviewed journals. It asserts that none of this would have been possible had it manipulated data or made false claims about simufilam.⁴⁹ It also asserts that “Cassava's foundational science and testing results would have been called out as fabricated, manipulated, and doctored a long time ago and prior to Defendants initiating their disinformation campaign if they had been fabricated, manipulated, and doctored.” Complaint ¶ 353. But scientific fraud that dupes funders, regulatory agencies, and academic journals is, sadly, not unheard of. That other organizations and individuals may have failed to raise Defendants' concerns earlier-particularly given that Defendants' scrutiny of Plaintiff came shortly after Plaintiff announced clinical trial results that Plaintiff itself labeled as aberrant and a subsequent reanalysis-does not raise a plausible inference that Defendants' accusations were “inherently improbable.” St. Amant, 390 U.S. at 732; Cf. Kesner v. Dow Jones & Co., Inc., No. 22-875, 2023 WL 4072929, at *3 (2d Cir. June 20, 2023) (finding that accusations were not inherently improbable “merely because others, including the SEC, had not directly accused [the plaintiff].”).

49 Plaintiff also alleges that an independent researcher “published test results showing biological activity for simufilam” and that “Cassava's foundational science and testing results could not have shown biological activity at an outside independent lab at Yale University if Cassava was a fraud relying on fabricated research and testing results.” Complaint ¶ 350. It is unclear precisely what Plaintiff means by “showing biological activity for simufilam.” In any event, Defendants did not state that simufilam did not “show[] biological activity.” They stated that Plaintiff had manipulated its data and that its claims about simufilam's efficacy in treating Alzheimer's were unreliable.

Plaintiff also claims that the actions taken by Plaintiff and its executives are inconsistent with a fraudulent scheme. Plaintiff alleges that “Cassava opened its testing results to scrutiny and review in good times and bad,” that Cassava's executives made “personal investments in Cassava,” and that “Cassava's executives could have but did not sell any of their shares in Cassava for over a decade.” Complaint ¶¶ 352, 355-356. But these allegations also fail to raise a plausible inference that Defendants' beliefs were “inherently improbable.” St. Amant, 390 U.S. at 732. Plaintiff's publication of press releases and articles about results does not make Defendants' assertions inherently improbable. Nor does the fact that executives held onto their company stock as the price rose.

Plaintiff has failed to adequately plead either that Defendants' statements were “so inherently improbable that only a reckless person would have put them in circulation” or that there were “obvious reasons to doubt the veracity” of Defendants' sources. St. Amant, 390 U.S. at 731-732. Each of Plaintiff's allegations in support of actual malice either contributes only marginally to a plausible inference of actual malice or does not contribute to such an inference at all. Therefore, the Court cannot plausibly infer that Defendants published their tweets with actual malice.

6. Open Label Study Statements

In contrast to its response to the allegedly false statements accusing Plaintiff of data fabrication and false claims about simufilam, Plaintiff devotes scant briefing to the Dot Com Defendants' allegedly false statements that the Open Label study was not double-blind. Plaintiff has also failed to adequately plead actual malice with respect to those statements.

Plaintiff makes several allegations relevant to this analysis: first, that the Dot Com Defendants held short positions in Plaintiff's stock, second, that Plaintiff publicly claimed that its Open Label Study was double-blind, and third, that the Dot Com Defendants did not interview Plaintiff, Plaintiff's executives, or Plaintiff's scientists about Defendants' suspicions. But as discussed above, Defendants' alleged short positions do not by themselves raise a plausible inference of actual malice. Also as discussed, allegations of failing to heed Plaintiff's public denials or seek out Plaintiff's side of the story are insufficient to adequately plead actual malice. See Edwards, 556 F.2d at 121. Therefore, Plaintiff has failed to plead actual malice with respect to the statements about the Open Label Study and has failed to state a claim for defamation.

V. LEAVE TO AMEND

Judge Wang did not make a recommendation regarding whether Plaintiff should be granted leave to amend the Complaint, but the Court holds that it should be granted leave to amend in part. “It is the usual practice upon granting a motion to dismiss to allow leave to replead.” Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991); see also Fed.R.Civ.P. 15(a)(2) (“The court should freely give leave [to amend] when justice so requires.”). It is true that leave to amend may be denied “for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party.” TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d Cir. 2014) (quoting McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007)).

The Court concludes that any amendment of Plaintiff's claims regarding the FDA Letters, QCM Report, and Dot Com Slide Decks would be futile. The Court has already had the opportunity to examine those challenged statements in their full contexts and has determined that they are not actionable, with the exception of the statements in the Seeing through the Blind Deck regarding the Open Label study. Therefore, the Court does not grant Plaintiffs leave to amend with respect to those claims.

However, the Court cannot conclude that amendment of the Complaint to replead Plaintiff's claims with respect to the challenged tweets would be futile. Plaintiff challenged hundreds of tweets but provided few individualized allegations regarding the context of each tweet. Additionally, the Court cannot conclude that it would be futile for Plaintiff to replead its allegations of actual malice with respect to the challenged tweets and the challenged statements in the Seeing through the Blind Deck regarding the Open Label Study.

Plaintiff has not yet had the opportunity to amend the Complaint with the benefit of a ruling from the Court on those issues. “Without the benefit of a ruling, many a plaintiff will not see the necessity of amendment or be in a position to weigh the practicality and possible means of curing specific deficiencies.” Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 190 (2d Cir. 2015). Plaintiff is therefore granted leave to file an amended complaint with respect to these deficiencies. Any amended complaint must be filed and served no later than 30 days from the date of this order.

VI. CONCLUSION

For the foregoing reasons, Defendants' motions to dismiss the claims against them are GRANTED. Plaintiffs' claims against all of the defendants are dismissed without prejudice. The Clerk of Court is directed to terminate the motions pending at Dkt Nos. 74, 77, and 86.

SO ORDERED.

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