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.
Continue Reading Annual Securities Class Action Report Shows Life Sciences Firms Remain a Top Target for Claims
Year-End NERA Report Shows COVID-19-Related Federal Securities Litigation Disproportionately Targeting Life Sciences Firms
A recently-published report from NERA Economic Consulting provides a look back at securities class action litigation in 2020 and demonstrates the continued focus by the plaintiffs’ bar on life science firms, particularly those centered on the development and commercialization of drugs and devices.
The report found that excluding merger objections, the Health Technology and Services
S.D.N.Y. Rejects Proposed Amended Complaint Alleging Manufacturer Of Liver Disease Drug Intended To Commit Fraud By Not Disclosing Serious Adverse Events
Hou Liu v. Intercept Pharmaceuticals, Inc., 2020 WL 5441345 (S.D.N.Y. Sept. 9, 2020)
On September 9, 2020, Judge Lewis A. Kaplan of the Southern District of New York denied a motion to amend judgment and a request for leave to file a second amended complaint following the Court’s dismissal of an action against Intercept Pharmaceuticals, Inc. and certain of its executives. The Court ruled that plaintiffs failed to identify any facts the Court overlooked in dismissing the action on March 26, 2020, and had not offered any newly-discovered evidence justifying leave to amend the complaint.
Mid-Year NERA Report Shows COVID-19-Related Federal Securities Litigation Targeting Pharmaceutical Industry
A recently-published report from NERA Economic Consulting provides a mid-year look back at securities class actions and demonstrates the continued focus by the plaintiffs’ securities litigation bar on health care and life science firms, particularly those focused on the development and commercialization of drugs and devices.
The report found that approximately half of all COVID-19-related
S.D.N.Y. Preliminarily Approves $1.6 Million Settlement in Class Action Concerning Development of an OxyContin Alternative
Shanawaz v. Intellipharmaceutics Int’l Inc., No. 17-CV-5761 (JPO) (S.D.N.Y. July 30, 2020)
On July 30, 2020, Judge J. Paul Oetken of the Southern District of New York preliminarily approved a settlement in a putative shareholder class action concerning development of an OxyContin alternative, Rexista. The parties agreed to a settlement amount of $1.6 million.
S.D.N.Y. Partially Dismisses Claims Against Pharmaceutical Company, But Allows Claim Regarding Misleading Statements About Upcoming NDA for Rare Tissue Disorder To Proceed
Skiadas v. Acer Therapeutics Inc., 2020 WL 3268495 (S.D.N.Y. June 16, 2020)
On June 16, 2020, Judge Gregory Woods of the Southern District of New York granted in part and denied in part a motion to dismiss an action against Acer Therapeutics Inc. and certain of its executives regarding disclosures made in offering documents prior to the Company’s submission of a New Drug Application (“NDA”) for EDSIVO, a drug that treats Vascular Ehlers-Danlos Syndrome (“vEDS”). Plaintiff allege that when the FDA declined to approve the drug, Acer’s stock dropped.
District of New Jersey Dismisses Action Regarding Company’s Statements Concerning Drug Delivery System’s Safety
Smith v. Antares Pharma, Inc., 2020 WL 2041752 (D.N.J. Apr. 28, 2020)
Judge Michael A. Shipp of the District of New Jersey dismissed a putative class action complaint filed against Antares Pharma, Inc., and certain of its officers, holding that the plaintiff failed to adequately allege an actionable misrepresentation or omission concerning certain adverse events observed in two Phase 3 clinical studies of Antares’s lead product, QuickShot Testosterone (“QST”), an auto injector product for testosterone replacement therapy. Plaintiff alleged that Antares made eight materially false or misleading statements concerning the safety of the product and likelihood of FDA approval.
First Circuit Affirms Dismissal of Action Regarding Statements Concerning Manufacturing of Eye Drug
Mehta v. Ocular Therapeutix, Inc., 955 F.3d 194 (1st Cir. 2020)
On April 9, 2020, the First Circuit affirmed the dismissal of an action brought against a biopharmaceutical company, Ocular Therapeutix, Inc., and certain of its officers, regarding statements concerning the Company’s manufacturing processes. The Court held that plaintiffs failed to allege facts giving rise to a strong inference of scienter (i.e., fraudulent intent) and thus failed to adequately plead a securities law violation.
S.D.N.Y. Dismisses Action due to Plaintiffs’ Failure to Link Occurrences of Serious Adverse Events to Liver Disease Drug
Hou Liu v. Intercept Pharm., Inc., 2020 WL 1489831 (S.D.N.Y. Mar. 26, 2020)
On March 26, 2020, Judge Lewis A. Kaplan of the Southern District of New York granted a motion to dismiss an action against Intercept Pharmaceuticals, Inc. and certain of its executives regarding twenty-one statements made about safety, dosing, and effects of Ocaliva, a drug approved to treat patients with primary biliary cholangitis (“PBC”), a rare liver disease. The complaint alleged that Intercept’s stock dropped after it issued a Dear Healthcare Provider Letter (the “HCP Letter”) and again after the FDA issued a drug safety communication and a corresponding safety alert on Ocaliva.
Cornerstone Research Report Shows Continued Rate of Federal Securities Litigation Filings Targeting Pharmaceutical Industry
A recently-published annual report from Cornerstone Research demonstrates the continued focus by the plaintiffs’ securities litigation bar on pharmaceutical, healthcare, and biotechnology firms.
The report notes that 2019 federal securities filings (excluding merger objections), against Consumer Non-Cyclical companies, primarily composed of pharmaceutical, healthcare, and biotechnology firms, were at record levels. Specifically, federal filings in the biotechnology, pharmaceuticals, and healthcare sectors increased from 56 in 2018 to 63 in 2019.