A recently-published report from Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse analyzes securities class action litigation in 2020 and demonstrates both a continued focus by the plaintiffs’ bar on life science firms (including those in the pharmaceutical and biotechnology spaces), as well as specific trends in securities litigation affecting companies in this sector.
The report notes that while 2020 federal securities filings (excluding merger objections) against the Consumer Non-Cyclical industry, primarily composed of pharmaceutical, healthcare, and biotechnology firms, were down slightly from 2019, filings against this sector vastly exceeded long-term averages. Specifically, there were 67 federal filings in 2020 against companies in the sector, representing a 31% increase over the average from 1997 to 2019. Filings against this industry were also more than double those of any other industry.
The report also identifies certain trends in securities litigation filings that directly impact life sciences firms. First, there were numerous cases filed in 2020 related to COVID-19, both with regard to the impact of the virus on companies’ performance, as well as directly relating to the development of vaccines, therapeutics, and diagnostics targeting the virus. Second, the report confirmed an uptick over the last few years in cases filed against companies in the cannabis space. Third, the report identified new filings related to the opioid crisis.
The entire report is available at: https://www.cornerstone.com/Publications/Reports/Securities-Class-Action-Filings-2020-Year-in-Review.pdf.