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
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.
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
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.
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.
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.
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.
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.
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.
In re Celgene Corp. Sec. Litig., 2019 WL 6909463 (D.N.J. Dec. 19, 2019)
On December 19, 2019, Judge John Michael Vazquez of the District of New Jersey partially denied a motion to dismiss a putative securities class action complaint filed against biopharmaceutical company Celgene and certain of its executives.
Plaintiff’s allegations relied heavily on purported information from former Celgene employees, consultants, and scientists, and arose out of Celgene’s statements concerning three drugs that Celgene was developing as revenue replacements for its blockbuster multiple myeloma drug, Revlimid, which has a patent set to expire in 2022. Judge Vazquez analyzed allegations relating to each drug in turn.