Background
Eldad Levy sought certification of a securities class action against Epitomee Medical Ltd. and several of its officers. Epitomee had agreed with Nestlé Health Science that, if its weight-loss capsule satisfied the FDA clinical-trial protocol and additional contractual conditions, Epitomee would receive a grant of $10 million to $25 million and Nestlé would distribute the product globally. Levy alleged that Epitomee’s prospectus and September and November 2023 exchange disclosures emphasized compliance with the FDA protocol without adequately disclosing the additional conditions. After Epitomee disclosed on November 29, 2023 that the trial results had not fully satisfied those conditions, its share price fell 72%. Levy alleged approximately NIS 201.3 million in investor losses.
Epitomee argued that the additional conditions were not material before Nestlé analyzed the trial results, that it had no reason to anticipate Nestlé’s termination of the agreement, and that its disclosures were not misleading. During the certification proceedings, Epitomee sought to add a statistical expert opinion addressing what its officers could infer from the trial data and when. The Haifa District Court denied the request because it was filed very late, after the pretrial stage, without earlier notice, and concerned an issue outside the core of the certification dispute. Epitomee sought leave to appeal.
The Court’s Holding
Justice Ofer Grosskopf denied leave to appeal without requesting a response. The Supreme Court emphasized that trial courts have broad discretion over procedural matters, including whether to admit additional evidence, particularly in class-action proceedings, and that appellate intervention is reserved for exceptional cases. The District Court had properly considered the timing and nature of the evidence, the explanation for the delay, the applicant’s conduct, and the evidence’s contribution to determining the truth.
The statistical opinion was requested roughly eighteen months after Epitomee filed its certification response and about ten months after an earlier, successful request to add evidence. Even accepting that Levy’s reply created the need for statistical evidence, Epitomee could have requested it with that earlier application or at least disclosed its intention to do so. Given this substantial delay, admission required an especially strong showing that the opinion would materially aid the certification decision.
The opinion did not meet that threshold. It addressed whether Epitomee possessed final data and whether the available data indicated compliance with the additional conditions. The central certification issue, however, was whether describing the trial as successful under the FDA protocol—without simultaneously disclosing the additional contractual conditions and Nestlé’s termination right—omitted material information. The statistical issues could still affect matters such as investor damages, but they were not sufficiently central to justify late admission. Any prejudice was also limited because, if the class is certified, Epitomee may offer expert evidence during the merits phase. The Court ordered Epitomee to pay NIS 10,000 in costs because its appeal had prompted postponement of the July 2026 evidentiary hearings.
Key Takeaways
- Appellate courts will rarely disturb a trial court’s discretionary ruling on whether to admit late evidence in class-certification proceedings.
- A party seeking to add substantially delayed evidence must show an especially strong contribution to resolving the certification application.
- Whether a company believed it satisfied undisclosed contractual conditions is distinct from whether the existence and significance of those conditions were themselves material to investors.
- Excluding expert evidence at certification does not necessarily bar the party from presenting it later if the class action proceeds to the merits.
Why It Matters
The decision reinforces strict case-management expectations in Israeli class actions: parties should submit supporting expert evidence with their principal certification filings or promptly disclose the need for additional evidence. Delay may not be cured merely by offering to pay costs, especially after pretrial proceedings have concluded.
For securities issuers, the ruling also highlights that reporting regulatory success may not adequately inform investors when separate contractual benchmarks determine commercialization, payment, or termination rights. Although the Supreme Court did not decide the underlying disclosure claim or certify the class, it treated that omission question as the central issue at the certification stage.