b'public offerings increased by 47% from 2019 to 2020.8This year, we have continued to focus our Year in Plaintiffs largely have shifted away from filing theseReview on jurisdictions that are epicenters for life sci-actions in state courts only, resulting in a 68% drop inences and healthcare companies and, thus, have been the number of 1933 Act cases filed in state courts withamong the most active jurisdictions in the country for no parallel federal action) from 2019 to 2020 and ansecurities class actions filed against such companies: increase in 1933 Act filings in federal courts only.9 Thisthe U.S. Court of Appeals for the First Circuit and U.S. shift back to federal courts is primarily due to a deci- District Court for the District of Massachusetts; the U.S. sion issued by the Delaware Supreme Court in MarchCourt of appeals for the Second Circuit and New York 2020 in Salzberg v. Sciabacucchi, in which the CourtDistrict Courts; and the U.S. Court of Appeals for the upheld the validity and enforceability of federal forumNinth Circuit and California District Courts. The Second selection provisions in corporate charters or bylawsand Ninth Circuits was were particularly active in 2020, that many Delaware corporations have implementedcomprising 70% of all core federal class action filings post-Cyan requiring 1933 Act claims against them to be(across all industries) in 2020; filings in the Ninthfiled in federal courts.10 It is also perhaps due to the factCircuit alone increased by 52% to 79 filings, the highest that market declines and disruption in early 2020 werenumber on record for that circuit.12 The perceiveddue to the unanticipated COVID-19 pandemic, followeddefendant-friendly First Circuit, by contrast, experi-by overall favorable market conditions beginning inenced a decrease of 67% in core class action filings.13April 2020.11 In 2020, federal courts in these jurisdictions have once Unfortunately, the percentage of cases filed in 2020again issued several significant, detailed decisions in that were dismissed by year-end dropped fairlysecurities class actions against life sciences and health-substantially from 2019 to a de minimus number.care companies in various growth stages and their Specifically, as detailed in Figure 2 below, a mere 1.9%directors and officers. As in prior years, these cases of federal core filings in 2020 against life sciences andinvolve disclosures concerning issues that life sciences healthcare companies were dismissed by December 31,and healthcare companies most often face, including 2020, as compared to a 9.5% year-end dismissal rate innegative clinical trial results, enrollment issues, and 2019 and a 16.1% year-end dismissal rate in 2018. Thus,clinical trial delays, including due to COVID-19, discus-there is virtually no chance of obtaining dismissal of asions with and requirements imposed by FDA, supply class action against a life sciences company within theand manufacturing issues, adverse events and other first 12 months after filing. In all likelihood, the slowersafety issues, and future growth prospects and revenue speed of obtaining a dismissal is due to a slowing ofprojections concerning approved drugs or other health-court dockets in 2020 due to the COVID-19 pandem- care-related products. As noted above, several actions ic. Courts were either shut down to civil cases for awere filed in 2020 relating to COVID-19, and we discuss significant amount of time, or civil cases progressedsome of these cases filed against life sciences and more slowly in light of a need to attend to criminalhealthcare companies as key cases to watch in 2021. dockets. The percentage may increase as courts workThe First Circuit and District of Massachusetts feder-through the substantial backlog of cases and jury trials.al courts, with deep understanding of the industry, However, while we of course expect that the percent- dismissed all six of the securities class actions decid-age of dismissals of cases filed in 2020 will increase byed in 2020. These federal class actions were largely the end of 2021, as Figure 2 demonstrates, dismissaldismissed on the basis that plaintiffs failed adequately rates for cases filed in 2019 as of the end of 2020 areto allege that the defendants statements were false or relatively low at 22.6% as compared to year-end dis- misleading and/or that plaintiffs failed to allege particu-missal rates for prior years. larized factsas required under Federal Rule of Civil Procedure 9(b) and the Private Securities Litigation Reform Act (PSLRA)that the defendants made false 8 See Cornerstone Report, at 4, 19, 21; see also id. at 23 (165 operating company IPOs in 2020, a 47% increase from 2019). The number of SPAC IPOs dramatically increased in 2020 as well, from 59 in 2019 to 248 in 2020. Id.9I d. at 4, 21. New York remained the preferred venue for 1933 Act cases filed in state courts, with seven of the 19 filings that were only filed in state court (i.e., with no parallel federal action). Id. at 4, 19.10227 A.3d 102 (Del. 2020). Since the Sciabacucchi decision, four California state courts likewise have enforced these federal forum selection provisions. See Wong v. Restoration Robotics, Inc., No. 18-CIV-02609 (Cal. Super. Ct. Sept. 1, 2020); In re Uber Technologies, Inc. Securities Litigation, No. CGC-19-579544 (Cal. Super. Ct. Nov. 16, 2020); In re Dropbox, Inc. Securities Litigation, No. 19-CIV-05089 (Cal. Super. Ct. Dec. 4, 2020); In re Sonim Technologies Inc. Securities Litigation, No. 19-CIV-05564 (Cal. Super. Ct. Dec. 7, 2020).11Cornerstone Report, at 23.12 Cornerstone Report, at 33.13 Id.6'