Developments in Securities Fraud Class Actions Against U.S. Life Sciences Companies

In 2022, the total number of securities class action complaints filed remained below the more elevated levels we saw during 2017-2020, but life sciences companies were nonetheless still popular targets among these filings. [1] In this post, we analyze and discuss trends identified in filings and decisions from 2022 so that prudent life sciences companies can continue to take heed of the results.

Plaintiffs filed a total of 43 securities class action lawsuits against life sciences companies in 2022, which represented almost one in four securities class action lawsuits. Filings against life sciences companies in 2022 represented a 27.1% decrease from the previous year, and a 51.1% decrease from five years prior. Of these cases, the following trends emerged:

• Consistent with historic trends, the majority of suits were filed in the Second, Third and Ninth Circuits, with a 54.5% decrease in suits filed in the Ninth Circuit – 22 in 2021 and 10 in 2022. The Third Circuit saw a 44.4% decrease in filings from the previous year – from nine in 2021 to five in 2022. For district courts within these circuits, the Southern District of New York had the most filings, with 10 overall
• A few plaintiff law firms were associated with about three-fourths of the first filed complaints against life sciences companies: Pomerantz LLP (18 complaints), Glancy Prongay & Murray LLP (five complaints) and Bronstein, Gewirtz & Grossman, LLC and Kessler Topaz Meltzer & Check LLP (tied with four complaints each). [2]
• Slightly more claims were filed in the first half of 2022 than in the second half, with 24 complaints filed in the first and second quarters, and 19 complaints filed in the third and fourth quarters.
• About a quarter of the securities fraud cases brought against life sciences companies (11 cases) were filed against companies with COVID-19-related products and services.

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