A federal appeals court has overturned a lower court ruling and reinstated securities fraud charges against a pharmaceutical company, stating its arguments as to why it changed its statements about a Federal Drug Administration meeting were unconvincing.

Ann Arbor, Michigan-based Esperion Therapeutics Inc. was formed in 2008 but has never sold any products nor generated any revenue, relying instead upon investor funding, according to Thursday’s ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in Kevin L Dougherty et al. v. Esperion Therapeutics Inc.; Tim M. Mayleben.

The company’s sole focus has been development of ETC-1002, a cholesterol-lowering drug, according to the ruling. After a meeting with the FDA, the company said in an August 2015 press release that it would not be required to complete a cardiovascular outcomes trial for the drug, which is a lengthy study conducted over several years.

However, after the FDA issued the final minutes of its meeting with the company, Esperion reported in September 2015 that the FDA had encouraged the company to conduct the study.

Esperion common stock investors then filed suit against the company and its CEO, Mr. Mayleben, in U.S. District Court in Detroit. The litigation charged the defendants had violated the Securities and Exchange Act of 1934 and a Securities & Exchange Commission rule by misleading investors in falsely stating the FDA would not require the cardiovascular study. This caused the stock to initially trade at an artificially inflated level then plummet after it reported it might have to conduct the test after all.

The District Court granted Esperion’s motion to dismiss the case, which a three-judge appeals court panel unanimously overturned on appeal.

“Esperion offers two possible explanations for the differences between its August and September statements,” said the rule. The company first says the September statements were made with “the benefit of information not available in August.”

“Second, Esperion suggests that it ‘might have left the meeting with a different impression than the FDA minutes ultimately reflected.’”

“Neither explanation, however, is more plausible than the knowing or reckless fraud alleged by Plaintiffs,” said the ruling. With regard to its first explanation, Esperion “provides no reason why the FDA would have changed its position” following its meeting.

“Esperion’s suggestion that its executives misapprehended the FDA’s position is also unavailing,” the ruling said. “If Esperion is conceding that it was told by the FDA” it must complete the study, “but then mistakenly told its investors the exact opposite, this supports Plaintiff’s inference of recklessness,” said the ruling in reversing the lower court and remanding the case for further proceedings.