Securities Litigation Against Life Sciences Companies 2023 Year in Review

Our in-depth analysis of trends in securities class action filings in the life sciences industry, including highlights from important court decisions.

Welcome to our eighth annual report on US securities class actions filed against publicly traded life sciences companies, which include pharmaceutical, biotechnology, medical device, and healthcare companies.

In the following sections, we analyze data and trends in securities class actions across all industries and in the life sciences industry in particular. We then highlight important 2023 decisions issued by federal courts in securities cases against life sciences companies and their officers.

Please reach out to the contacts listed below if you have questions or feedback or want to discuss how trends in the industry may affect your business.

Executive Summary

In the context of securities class action litigation, 2023 held some bright spots for publicly traded life sciences companies. While stockholder plaintiffs filed slightly more securities cases overall in 2023 than in 2022, the number of cases filed against life sciences companies decreased by more than 10%. However, life sciences companies remain the biggest target for stockholders, and whether this decline is part of a larger trend or simply a reversion to the long-term average remains to be seen. Court rulings tended to be favorable to defendants throughout 2023, with courts dismissing the majority of observed cases. Several decisions this year examined stockholder complaints’ use of confidential witnesses (who often are former employees contacted by a plaintiffs firm’s “investigators” during or before litigation). When confidential witnesses have little connection to the named officer defendants or senior management, courts tend to discount them. But witnesses who speak about specific meetings or information provided to senior management can cause a court to deny a motion to dismiss.

ANALYSIS AND CASES