Press Release February 18, 2021

Goodwin Report Reveals Decline In Securities Class Actions Filed Against Life Sciences And Healthcare Companies For First Time In Years

Global law firm Goodwin today announced the release of its fifth annual Year in Review: Securities Litigation Against Life Sciences and Healthcare 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 and healthcare companies”) and summarizes the most interesting decisions issued by courts in 2020 and cases to watch in 2021.

“While securities filings decreased across all sectors in 2020, the life sciences and healthcare sectors once again had by far the greatest number of securities class action filings compared to other sectors, likely due to the inherently volatile stock prices and number of event-driven disclosures required of these companies,” said Caroline Bullerjahn, Goodwin partner and co-author of the report. “The number of securities class actions filed in 2020 against life sciences and healthcare companies also dropped 16% from 2019, which was likely attributable at least in part to favorable market performance in these sectors.”

“Despite the disruption resulting from the events of 2020, courts continued to issue important decisions in class actions that life sciences and healthcare companies should consider when making disclosure decisions going forward,” said Michael Jones, partner and co-author of the report. “We anticipate these sectors will continue to be impacted significantly in the year ahead with several critical cases still in play, including many unprecedented actions related to COVID-19.”

The report’s key findings include:

  • Years-Long Increase in Filings Reversed: The number of filings against life sciences and healthcare companies decreased for the first time in several years from 62 securities class actions in 2019 to 52 actions in 2020. The decrease was primarily driven by a drop (from 33 to 19 actions) in class actions against pharmaceutical companies. Biotechnology companies bucked this trend, with the number of class actions increasing from 13 actions in 2019 to 19 in 2020.
  • Case Dismissal Rate Drops Significantly: A mere 1.9% of 2020 federal core filings against life sciences and healthcare companies were dismissed by December 31, 2020, as compared to a 9.5% year-end dismissal rate in 2019 and a 16.1% year-end dismissal rate in 2018, likely as a result of slowing court dockets due to the COVID-19 pandemic.

View the full report here.

Goodwin’s Securities + Shareholder Litigation practice handles 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®. Goodwin was named the 2021 Biotechnology Law Firm of the Year by US News — Best Lawyers®, the 2020 Corporate and Intellectual Property firm of the year by LMG Life Sciences Awards, and 2020 Life Sciences Firm of the Year by The British Legal Awards.