NERA Economic Consulting recently published their annual report examining trends in securities class action litigation in 2021.  Although the report found that filings in 2021 decreased overall, the proportion of claims targeting life science firms increased for the second year in a row, following a spike in suits connected to the COVID-19 pandemic.

The report found that, excluding merger objections, the Health Technology and Services sector (which includes pharmaceutical and biotech firms) accounted for 26% of all securities class action filings for the year, the second-most of any sector.  COVID-19-related issues remained a key driver of securities class actions against life science firms: in 2021, a quarter of the 20 COVID-19-related securities class actions targeted companies in the Health Technology sector.

NERA also reported that companies in the Health Services and Technology sector accounted for three of the top ten (and two of the top three) largest securities class action settlements in 2021.  The settlements in cases brought against three major pharmaceutical companies described in the report amounted to over $330 million in total settlement value, resulting in those three cases alone accounting for roughly 18% of the aggregate value of all securities class action settlements over the course of the year.

NERA’s report makes clear that life sciences firms remain a top target of securities class action claims.  The life sciences industry stands out among all sectors in both the raw number of claims filed and in the size of such claims, making it ever more important that companies in the industry take steps to mitigate these risks, including through thoughtful disclosure of issues in consultation with experienced securities disclosure counsel and ensuring they have sufficient D&O insurance coverage.

Read the entire report.

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Photo of Gregg Weiner Gregg Weiner

Gregg is co-chair of the firm’s Litigation and Enforcement practice group, based in Ropes & Gray’s New York office. Gregg has over 25 years of experience delivering successful results to financial institutions, Fortune 500 companies, professional services organizations, hedge funds and other sophisticated…

Gregg is co-chair of the firm’s Litigation and Enforcement practice group, based in Ropes & Gray’s New York office. Gregg has over 25 years of experience delivering successful results to financial institutions, Fortune 500 companies, professional services organizations, hedge funds and other sophisticated clients in a wide range of complex commercial disputes. His practice involves matters concerning the federal securities laws, commercial contracts, financial transactions/instruments, corporate governance, breach of fiduciary duty claims and mergers and acquisitions. Gregg also frequently represents real estate developers, investors and owners in high-profile litigation matters.

Photo of Adam Harris Adam Harris

Adam is partner in Ropes & Gray’s Litigation and Enforcement practice, based in New York. Adam focuses on complex business litigation, including securities class action defense, breach of contract cases, deal-related litigation, breach of fiduciary duty claims, corporate governance disputes, and civil fraud…

Adam is partner in Ropes & Gray’s Litigation and Enforcement practice, based in New York. Adam focuses on complex business litigation, including securities class action defense, breach of contract cases, deal-related litigation, breach of fiduciary duty claims, corporate governance disputes, and civil fraud and RICO claims.

Photo of Chloe Gordils Chloe Gordils

Chloe Gordils joined Ropes & Gray’s Litigation & Enforcement practice group in 2019.

During her time at Brooklyn Law School, Chloe served as an executive articles editor for the Brooklyn Law Review. Additionally, she was a member of both the Trial and…

Chloe Gordils joined Ropes & Gray’s Litigation & Enforcement practice group in 2019.

During her time at Brooklyn Law School, Chloe served as an executive articles editor for the Brooklyn Law Review. Additionally, she was a member of both the Trial and Appellate Divisions of the Moot Court Honor Society. Chloe was also a member of the Asylum Relief Project, where she traveled to Texas to provide legal support to detained mothers and children. She also participated in the Employment Law Clinic, where she represented clients in unemployment insurance hearings. Chloe received a Burton Law360 Distinguished Legal Writing Award for her article Google, Charlottesville, and the Need to Protect Private Employees’ Political Speech. Upon graduation, Chloe received Brooklyn Law School’s Scholarly Journal Writing Award, the Samuel Witte Prize in Literature and the Law, and the Judge Leonard P. Moore Memorial Prize.