Cooley Wins Securities Litigation Appeal for Talphera

San Francisco – August 20, 2025 – Cooley secured a key appellate win on behalf of Talphera (formerly known as AcelRx Pharmaceuticals), a Silicon Valley-based specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in the medically supervised setting, in affirming the 2024 dismissal of a securities class action brought by investors, who alleged that the company committed securities fraud in the run-up to a February 2021 US Food and Drug Administration (FDA) warning letter concerning some marketing materials for its pain drug Dsuvia. 

In an opinion authored by Judge Kenneth K. Lee, the US Court of Appeals for the Ninth Circuit unanimously agreed that the plaintiffs had failed to show a strong inference of scienter, and further held that the plaintiffs had failed to adequately plead falsity. The Ninth Circuit held that “a snappy slogan for a potent pharmaceutical” – in this case, the marketing phrase “Tongue and Done” – is no basis for liability under the securities laws when accompanied by additional disclosures intended for investors. The panel emphasized that reasonable investors would not “blindly accept” an advertising slogan regarding a new drug without considering other information and the context in which it was provided. The panel also held that allegations from former employees that demonstrate no more than “a difference of opinion” within the company are not sufficient to plead scienter. 

The case is Sneed v. Talphera, Inc. before the US Court of Appeals for the Ninth Circuit (Case No. 24-3560).

The appeal was argued by Cooley special counsel Patrick Hayden. The Talphera securities litigation team was led by Cooley partners Tijana Brien, Patrick Gibbs and Shannon Eagan, with associates Janelle Fernandes, Allison O’Neill and Greg Merchant.

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