Thought Leadership

Securities Litigation: Life Sciences Annual Report

Client Updates

We are pleased to present Baker Botts’s 2023 Review of Securities Litigation in the Life Sciences Industry. To read the full Review, please click here.

Life sciences companies are particularly susceptible to the types of adverse, market-moving company events that generate securities class action litigation. For example, pharmaceutical companies may face setbacks in developing and obtaining FDA approval for new products or in manufacturing and selling their products under regulatory scrutiny. If these setbacks cause stock prices to fall, securities complaints soon follow. 

Given these risks—and a recent spike in COVID-related securities cases—it is no surprise life sciences companies are frequent targets of securities class action complaints. But they also successfully defend against those claims more frequently than other companies.

Our Review bears out these trends:

  • Life sciences companies are frequent targets of securities class action complaints. Life sciences companies were named in roughly 20% of new securities class action complaints in 2023, consistent with rates in recent years.
  • Securities claims frequently arise from setbacks in FDA applications. The preponderance of new life sciences securities class action complaints relates to pre-FDA-approval drugs and devices. 
  • Life sciences defendants have a strong track record defending against securities claims. Our review of securities class actions filed and resolved over the past decade finds that life sciences defendants prevailed more frequently than defendants in other industries. 
  • Strong results for life sciences defendants continued in 2023. Life sciences defendants prevailed in 18 of 27 district court decisions and four out of five court of appeals decisions on dispositive motions in 2023.
  • Our review identifies favorable new precedent for companies defending against claims in the future. For example, federal courts in 2023 held that:
    • FDA denial of a new drug application does not render the applicant’s earlier positive statements about clinical trial results false because “a mere dispute about the proper interpretation of data” cannot support a securities fraud claim;
    • A development-stage drug company can disclose encouraging top-line clinical trial results—and express positive views about those results—without disclosing full, subject-level data, even if some of the more detailed information might conflict with the positive top-line results; and 
    • A developmental drug company’s statements about the prospects for FDA approval of a new drug candidate “‘are classically forward-looking”—and, thus, entitled to safe harbor under the Reform Act—“because ‘they address what defendants expect to occur in the future.’”

We hope this Review will help management, in-house counsel, and other participants in the life sciences industries to better understand the securities litigation landscape, the business activities that most commonly generate shareholder litigation, steps they can take to reduce litigation risk, and the strongest defenses to securities claims.

If you have any questions about the content in the Review, please reach out to the authors listed below or any member of the Securities Litigation Practice Group.


Baker Botts is an international law firm whose lawyers practice throughout a network of offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit

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