Global 50 law firm Goodwin announced today the release of its third annual 2018 Year In Review - Securities Litigation Against Life Sciences and Health Care Companies, a report drawing notable trends and insights from securities class action decisions issued in 2018 by courts that are among the most active in the country for such cases, including the First Circuit, the District of Massachusetts, the Ninth Circuit and the District Courts of California, that will impact life sciences and health care companies going forward.
Produced by the firm’s Securities Litigation and White Collar Defense Group, the report analyzes data concerning the near record number of securities class actions filed nationally against pharmaceutical, biotechnology, medical device and health care product and services companies in 2018. These cases typically follow stock price drops after disclosures concerning issues that life sciences and health care companies often face, including adverse events arising during clinical trials or after approval, negative clinical trial results, discussions with and requirements imposed by the FDA, manufacturing issues, and future growth prospects and revenue projections relating to approved drugs or other healthcare-related products.
While the number of securities class actions filed nationally against publicly traded life sciences and health care companies has significantly grown over the last few years, the number of such cases filed in 2018 declined slightly to 56 actions, down from 66 actions in 2017. However, filings against life sciences and health care companies remained well above the historical average and these companies continue to be the most frequent target of securities class actions as compared to other industry sectors.
“Life sciences and health care companies continue to be targets for securities class actions given their stock price volatility. While the decisions issued in these cases in 2018 generally favored defendants, the dismissal rate for such cases filed in 2018 dropped to approximately 16%, down from a 24% dismissal rate in 2017.” said Caroline Bullerjahn, a partner in Goodwin’s Securities Litigation and White Collar Defense Group and a co-author of the report. “In analyzing the decisions from 2018 and cases to watch in 2019, we’ve detailed some significant holdings that companies operating in these sectors should be mindful of in making disclosure decisions.”
To view the full analysis, download the report here.