The Motley Fool website has an interesting, non-lawyer commentary on the large number of securities class actions that have been filed in the biotech industry over the past few years. The author engages in an informal survey of 100 mid-cap ($100 million to $2 billion) biotech companies and finds that 31, or nearly one-third, are currently facing suits. (The 10b-5 Daily has previously posted about the statistics for biotech cases filed in 2003.)
Quote of note: “Drug development is a high-risk business model, where investigational products frequently fail. Approximately 30% of drugs in phase 3 trials will never gain approval, and roughly 20% of drugs filed for approval with the FDA will get turned down. That’s a pretty high failure rate.”
Quote of note II: “This non-legal advice from a non-lawyer is to stick to the facts of the clinical data and avoid giving opinions on how good the drug is. Don’t say something like ‘potential to be best in class’ or ‘revolutionize the treatment of this disease.’ Such careless comments will be a nightmare if the drug hits a snag. You can bet that the lawyers will be looking for them, too.”
The 10b-5 Daily 