Global law firm Goodwin today announced the release of its fourth annual 2019 Year In Review - Securities Litigation Against Life Sciences and Healthcare Companies. Produced by the firm’s Securities + Shareholder Litigation practice, the report analyzes the securities class action decisions issued in 2019 that will impact life sciences and healthcare companies in the year ahead.
This year’s Year in Review takes a deep dive into the most significant decisions issued by state and federal courts in 2019 in securities class actions filed against publicly traded pharmaceutical, biotechnology, medical device and healthcare product and services companies. Such companies are targeted more than companies in any other industry and faced 63 class actions in 2019 – an increase from 56 in 2018. These cases were filed in both state and federal courts under the Securities Act of 1933 and/or the Securities Exchange Act of 1934 by shareholders seeking to recover investment losses after a company’s stock price drops following the disclosure of a setback or problem experienced by the company with respect to its drugs or products. These cases and decisions issued in 2019 involved disclosures concerning issues that life sciences and healthcare companies most often face, including:
- Negative clinical trial results
- Enrollment issues and clinical trial delays
- Discussions with and requirements imposed by FDA
- Supply and manufacturing issues
- Adverse events and other safety issues
- Future growth prospects and revenue projections concerning approved drugs or other healthcare-related products
- Alleged anticompetitive conduct
With an expanded focus on the courts in the main epicenters for life sciences and healthcare companies — the First Circuit and District of Massachusetts; the Second Circuit and New York District Courts; and the Ninth Circuit and California District Courts — the report identifies significant patterns and trends emerging in each of these jurisdictions.
“Stock price volatility within the life sciences and healthcare sectors continues to make these companies target for securities class actions,” said Caroline Bullerjahn, a partner in Goodwin’s Securities + Shareholder Litigation practice and co-author of the report. “Our detailed analysis of 2019 decisions and cases in the pipeline in 2020 provides critical insight for companies operating in these sectors to consider in making disclosure decisions going forward.”
The report also analyzes data published by Cornerstone Research of class action filings in 2019, and identifies key trends such as a significant increase in 2019 class action filings (40% over 2018) in state courts alleging claims under the Securities Act of 1933, and a decrease in the dismissal rate of class actions filed in 2019 by year-end as compared to prior years.
View the full analysis here.
As the leading law firm focused on the intersection of capital and innovation, Goodwin’s litigation practices have developed a reputation as the go-to counsel for matters involving M&A litigation and post-closing disputes; advising established and emerging life sciences, technology, private equity, real estate, financial services and real estate companies; securities class action litigation and SEC investigations; advising clients in trade secret disputes; while collar defense; and government investigations. The firm’s Securities + Shareholder Litigation practice is highly ranked in leading industry publications including The Legal 500 and Chambers.
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