Global law firm Goodwin today announced the release of its seventh annual Year in Review: Securities Litigation Against Life Sciences Companies. Produced by the firm’s Securities & Shareholder Litigation practice, the in-depth report analyzes data concerning securities class actions filed nationally against publicly traded pharmaceutical, biotechnology, medical device, and healthcare product and services companies (together, “life sciences companies”) and summarizes the most impactful decisions issued by courts within life sciences epicenters in 2022.
“While the overall number of securities class action cases filed in 2022 declined, the life sciences and biotechnology sector remained, once again, the most frequent target of the plaintiffs’ bar as compared to other sectors,” said Caroline Bullerjahn, Goodwin partner and co-author of the report. “In 2022, federal courts in key jurisdictions have issued several important, detailed decisions in securities class actions against life sciences companies involving challenges that these companies most often face, which should be considered by officers and directors in making disclosure decisions going forward.”
The report’s key findings include:
- Continued Decline in Overall Filings. For the second year in a row, the number of new securities class action filings in federal and state courts declined, falling from 218 filings in 2021 to 208 filings in 2022—a 5% drop from 2021 and 43% lower than the previous five-year average of 362 filings. Filings related to SPAC transactions, cryptocurrency, and COVID-19 represented more than a third of all non-M&A federal class action flings in 2022.
- Continued Targeting of Life Sciences Companies. Partly due to the inherently volatile nature of the stock prices of life sciences companies and the many event-driven disclosures made by such companies, the consumer non-cyclical sector has once again the greatest number of federal filings in 2022, driven this year primarily by an increase in class actions against healthcare companies.
- Decisions issued by Courts in 2022 Mixed Bag. In the key jurisdictions that the report focuses on, the majority of the decisions issued by courts in 2022 resolving motions to dismiss were favorable to life sciences defendants. That said, in nearly a quarter of those dismissal decisions, the court allowed plaintiffs the opportunity to replead their dismissed claims and nearly a third of all decisions issued in 2022 denied motions to dismiss in whole or in part.
Goodwin’s Securities + Shareholder Litigation practice handles high stakes securities class actions, shareholder derivative litigation, M&A litigation, and private equity and portfolio company litigation. The practice is highly ranked in leading industry publications including The Legal 500, Chambers, and US News — Best Lawyers®. Chambers Global 2023 recognized Goodwin lawyers and practices for excellence in geographies around the world. Goodwin received 42 lawyer rankings and 26 practice rankings in this year’s edition of the annual guide, representing the highest totals in firm history. The firm also recently expanded and opened a new office in Philadelphia, including 14 new partners in the Life Sciences, Healthcare, Private Equity and Complex Litigation and Dispute Resolution practices.