Securities lawsuits against life sciences firms spike in 2014
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The number of securities class action lawsuits filed against life sciences companies increased dramatically in 2014, and they accounted for a larger percentage of the total number of class actions filed as well, says a law firm survey.
The number of class action lawsuits filed against publicly traded pharmaceutical, biotechnology and medical companies in 2014 increased to 39, or more than double the 19 filed in 2013, according to the survey released Monday by law firm Dechert L.L.P.
These life sciences firms accounted for 23% of the total of 170 securities fraud class action lawsuits filed last year, vs. 11% of the 167 securities fraud lawsuits filed in 2013, according to the survey.
“Notwithstanding the significant number of new lawsuits, however, in 2014 life sciences companies continued to enjoy relative success in obtaining dismissals of the securities fraud lawsuits brought prior years,” says “Dechert Survey of Securities Fraud Class Actions Brought Against U.S. Life Sciences Companies.”
A total of 57% of the complaints filed were for companies with market capitalizations of less than $500 million, according to the survey.
There was a continuing trend that began in 2011 of industry-specific allegations, according to the survey, rather than more generalized claims of financial improprieties.
A total of 56% of the 2014 claims charged misrepresentations or nondisclosures regarding product efficacy, or prospects and timing of U.S. Food and Drug Administration approval. Claims of inaccurate financial reports and accounting improprieties were in 44% of the complaints.
The number of lawsuits filed against life sciences companies is based on information reported by Boston-based Cornerstone Research.
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