Cornerstone Research has analyzed securities class actions filed against publicly traded companies in the pharmaceuticals industry (pharmaceutical filings). From 2002 to 2011, there were 120 pharmaceutical filings. The majority of pharmaceutical filings result from factors unique to the pharmaceutical industry, including stock price movements resulting from negative clinical trial results, regulatory nonapproval or delay of approval of new drug applications, or issues with the efficacy and safety of drugs already on the market. Of the 120 pharmaceutical filings from 2002 to 2011, forty-two involved allegations related to clinical trial results, twenty-two involved allegations related to regulatory approval, and eighteen involved allegations related to drugs already on the market (Figure 1). Only a small fraction of pharmaceutical filings resulted from non-industry-specific factors.
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Pharmaceutical filings typically involve larger dollar disclosure losses (DDL) than other types of securities class actions. The median DDL for pharmaceutical filings ranged from $127 million to more than $1 billion each year between 2002 and 2011. In contrast, for filings against non-pharmaceutical companies, the DDL ranged from $77 million to $181 million (Figure 2). For a broader discussion of DDL in securities class action filings, please see Securities Class Action Filings—2011 Year in Review.
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