Developments in Securities Fraud Class Actions Against U.S. Life Sciences Companies
March 12, 2026
Last year marked a decrease in federal securities class action filings, with plaintiffs filing 207 cases in 2025, down from 225 in 2024. However, life sciences companies remained popular targets, accounting for 47 of these filings.1 In this White Paper, we examine 2025’s filing and decision trends and provide insights to help life sciences companies navigate the litigation landscape prudently.
Life sciences companies have remained common targets for securities class actions. Plaintiffs filed a total of 47 securities class action lawsuits against life sciences companies in 2025, which represented over 22% of all securities class action lawsuits. Overall, filings against life sciences companies in 2025 slightly decreased but represented a slightly higher percentage of all securities class action complaints than in the prior year. Of these cases, the following trends emerged:
- The majority of suits were filed in the Second, Third and Ninth Circuits. The increase in filings in the Third Circuit restored filing levels to pre-2024 norms. The Ninth Circuit continues to be a popular circuit for these filings. For district courts within these circuits, the Southern District of New York had the most filings, with 10 total.
- A few plaintiff law firms were associated with about two-thirds of the first filed complaints against life sciences companies: Levi & Korsinsky (12 complaints), Pomerantz LLP (ten complaints), The Rosen Law Firm, P.A. (six complaints), and Glancy Prongay Wolke & Rotter2 (four complaints). This represents a decreased market concentration of firms from the prior year.3
- More claims were filed in the first half of 2025 than in the second half, with 29 complaints filed in the first and second quarters, and 18 complaints filed in the third and fourth quarters. This represents a change from past years’ trends where more complaints were filed in the second half of the year.
An examination of the types of cases filed in 2025 reveals continuing trends regarding the underlying claims from previous years.
- About 60% of the complaints, or 28 of 47 complaints, involved alleged misrepresentations regarding product efficacy and safety, with many of these cases involving alleged misrepresentations regarding certain negative side effects or the general ineffectiveness of leading product candidates, which could impact the likelihood of Food and Drug Administration (FDA) approval.
- About 28% of the complaints, or 13 of 47 complaints, arose from alleged misrepresentations involving regulatory hurdles, the timing of FDA approval, or the sufficiency of applications submitted to the FDA.
- About 19% of the complaints, or 9 of 47 complaints, were against non-U.S. issuers incorporated abroad.
- About 64% of the complaints, or 30 of 47 complaints, involved alleged misrepresentations related to the company’s financial reporting.
- About 11% of the complaints, or 5 of 47 complaints, involved alleged misrepresentations of material information made in connection with proposed mergers, sales, initial public offerings (IPOs) and other transactions.4
An examination of the decisions from 2025 reveals continuing trends from previous years, including the prevalence of claims involving product efficacy or safety and financial reporting or management.
The four categories are:
- About 42% of decisions, or 16 out of 38 decisions, involved alleged misrepresentations regarding product efficacy or safety. Motion to dismiss was granted in nine cases in their entirety, four were granted in part and denied in part, and three were denied in their entirety.
- About 37% of decisions, or 14 out of 38 decisions, involved alleged misrepresentations involving regulatory hurdles. Motion to dismiss was granted in ten cases in their entirety, two were granted in part and denied in part, and two were denied in their entirety.
- About 37% of decisions, or 14 out of 38 decisions, involved alleged misrepresentations related to the company’s financial reporting or management. Motion to dismiss was granted in six cases in their entirety, six were granted in part and denied in part, and two were denied in their entirety.
- About 18% of decisions, or 7 out of 38 decisions, involved alleged misrepresentations in connection with proposed mergers, sales, IPOs and other transactions. Motion to dismiss was granted in five cases in their entirety in favor of defendants, one case saw plaintiffs prevail on defendants’ motion to dismiss, and one case was denied in part.
Minimizing Securities Fraud Litigation Risks
Life sciences companies continue to be a popular target for securities fraud class action lawsuits. In 2025 alone, Dechert identified 38 judicial decisions in cases involving life sciences companies — double the 19 decisions issued in 2024. Nearly one in four securities fraud class actions filed in 2025 named a life sciences company as the defendant. While many of the companies discussed above prevailed on motions to dismiss, the financial, operational, and reputational costs of litigation underscore the importance of proactive risk management. Below is a list of practices that life sciences companies should consider in order to minimize securities fraud litigation risks.
- Ensure Statements Regarding Product Efficacy and Safety are Stated with Precision: Life sciences companies should ensure that public statements regarding clinical trial results and product safety and efficacy are accurate, complete and not more definitive than the underlying data supports. Language that characterizes preliminary or early-stage results in unqualified or absolute terms is particularly susceptible to challenge. Companies should also refrain from using specific, superlative or absolute language to discuss a product’s efficacy or safety profile unless that language is both accurate and demonstrably supported by available data. Lastly, life sciences companies should maintain detailed and consistent internal documentation of all known risks associated with a product at each stage of development, which could help reconcile public disclosure against the company’s actual knowledge.
- Disclose Regulatory Feedback Accurately and Completely: Life sciences companies should refrain from characterizing regulatory progress in positive terms when the company is simultaneously aware of undisclosed regulatory concerns, conditions or objections. When a company elects to speak about regulatory interactions, the duty to speak extends to negative as well as positive information. Therefore, when discussing cGMP compliance, manufacturing remediation efforts or inspection outcomes, among other disclosures, life sciences companies should confirm that public statements accurately characterize the current state of compliance and progress. Lastly, companies should maintain consistently documented internal disclosure processes for tracking and escalating regulatory feedback from all stages of the FDA review process, including preclinical, clinical and post-approval phases.
- Guard Against Financial Reporting and Operational Misstatements: Life sciences companies should distinguish forward-looking statements — which can receive PSLRA safe harbor protection when properly identified and accompanied by meaningful cautionary language — and present-tense characterizations of business performance and operating trends which are generally not protected and must be accurate as of the time they are made. They should also avoid affirmatively characterizing business momentum, revenue growth, or demand trends in positive terms while being aware of material countervailing operational information — such as sales force disruptions, customer acquisition challenges, or inventory issues — that contradicts those characterizations.
- Exercise Particular Diligence Around Transactions, IPOs and Offerings: Life sciences companies should ensure that all offering documents, proxy statements, registration statements, and transaction-related SEC filings contain detailed, accurate, and complete disclosures regarding the history of the transaction, alternatives considered, reasons for the recommendation, fairness opinions, and conflicts of interest. Companies should also implement rigorous pre-transaction disclosure review processes, particularly when the company is simultaneously in discussions with potential acquirers, investors or partners, or when insiders or controlling shareholders participate in secondary offerings or other liquidity events in proximity to material corporate developments.
- Address the Distinct Exposure as Non-U.S. Issuers: Non-U.S. issuers that are listed in the United States or otherwise access U.S. capital markets should treat themselves as fully subject to U.S. securities disclosure obligations and apply the same disclosure standards and review processes as U.S.-incorporated public companies. They should also ensure that communications about clinical results, regulatory interactions and competitive positioning — even those occurring in non-U.S. contexts — are reviewed for compliance with U.S. securities law prior to dissemination to investors.
- Implement Structural Compliance Practices Across All Disclosure Channels: Beyond the substantive disclosure obligations tied to specific claims categories, the 2025 filing and decision trends highlight the importance of structural compliance practices that cut across all claims. Life sciences companies should therefore work with counsel to adopt a comprehensive disclosure plan covering not only press releases and SEC filings, but also executive statements made during analyst calls and shared on company websites, among other places. Companies should ensure that disclosure decisions are properly documented, particularly involving decisions on whether to disclose feedback from the FDA that the company may believe is immaterial.
- Consider Proactive AI-Driven Disclosure Monitoring: Life sciences companies should recognize that plaintiffs’ firms are increasingly deploying artificial intelligence and advanced data analytics tools to monitor life sciences companies in near real time. These tools scrape and cross-reference public disclosures, earnings calls, FDA databases, insider trading filings and social media to identify inconsistencies and rapidly build theories of liability. In light of these developments, companies should consider proactively utilizing similar AI-powered monitoring tools to: (1) audit the consistency and accuracy of their own public statements across all channels, including SEC filings, press releases, earnings calls, investor presentations and executive interviews; (2) conduct real-time internal compliance reviews to identify potential disclosure gaps or inconsistencies before they become the basis for a complaint; and (3) operate under the assumption that any publicly available data point will be identified and cross-referenced by sophisticated analytics tools. Given the increasing sophistication of these tools, it is critical that all disclosures are accurate, complete and internally consistent.
Footnotes
1 Throughout this survey, data from prior years is derived from Dechert LLP’s 2024 survey on the same topic. See Joni Jacobsen, Angela Liu, Dechert Survey: Developments in U.S. Securities Fraud Class Actions Against U.S. Life Sciences Companies, Dechert LLP (March 2025). The number of securities fraud class actions filed generally is based on information reported by CORNERSTONE RESEARCH, SECURITIES CLASS ACTION FILINGS: 2025 YEAR IN REVIEW (last visited Feb. 12, 2026). This year, to determine the proportion of these filings that involved life sciences companies, Dechert LLP relied on Bloomberg Law’s coding of securities class actions, referencing those categorized under Bloomberg Law’s “Biotech & Pharma” or “Life Science & Diagnostics” industry categories. Figures referenced throughout are based on the first complaint filed. Amended complaints and consolidated related actions have been counted only once. When applicable, references to specific allegations cite to the amended complaint. The set of referenced decisions were determined by referencing prior complaints from 2023-2025 and identifying any dispositive orders that were issued in 2025 or early 2026.
2This firm was previously known as Glancy Prongay & Murray LLP.
3In 2024, four firms were associated with three-quarters of securities class actions filed against life sciences companies.
4As with prior years, it should be noted that the majority of all 2025 filings against life sciences companies could be classified under more than one category.
