Abstract
• Life sciences companies of all sizes remain firmly in the crosshairs of the plaintiffs' securities bar.
• 38 different life sciences companies, their directors, officers, and even key medical personnel, were sued for securities fraud in ’14, representing 23% of all securities fraud class actions. This represents a sharp increase from 2013, where only 11% of securities fraud class action suits were filed against life sciences companies.
• Although the trend in recent years continues to focus on securities fraud class action suits against life sciences companies with relatively small market capitalizations, life sciences companies of all sizes remain a target of the plaintiffs' securities bar.
• Continuing the trend of previous years, 2014 securities fraud lawsuits focused on industry-specific issues (e.g., alleged misrepresentations regarding product efficacy), as compared to generalized claims of financial improprieties.
• Multiple complaints filed in 2014 were claims filed after the defendant had received a warning letter from the Food & Drug Administration.
• Life sciences companies continue to obtain success in obtaining dismissals of the securities fraud complaints—and the U.S. Supreme Court's recent decision in Halliburton Co. v. Erica P. John Fund, Inc. may impart life sciences companies with significant protections in defending against securities fraud class action suits.
• Life sciences companies should remain vigilant in their efforts to minimize the risk of, or adverse impact from, a securities fraud class action lawsuit.