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Eastern District Of Pennsylvania Dismisses Putative Securities Class Action Against Pharmaceutical Company As Time-Barred
03/11/2026On March 4, 2026, Judge Chad F. Kenney of the United States District Court for the Eastern District of Pennsylvania dismissed with prejudice a putative class action asserting claims against a global pharmaceutical and biotechnology company and certain of its executives under the Securities Exchange Act of 1934. Roofers Local No. 149 Pension Fund v. GSK plc, 2026 WL 602784 (E.D. Pa. Mar. 4, 2026). Plaintiffs alleged that the company made misrepresentations in connection with the presence of an alleged carcinogen in the company’s widely used heartburn medication, which the FDA warned about in 2019 and ordered withdrawn from the market in 2020, and had also been the subject of “tens of thousands” of product liability and personal injury lawsuits. The Court held that plaintiffs’ claims were time-barred by the applicable statute of limitations because a reasonably diligent plaintiff would have discovered the facts underlying plaintiffs’ claims more than two years prior to the filing of the lawsuit.
Claims alleging misrepresentation under the Securities Exchange Act must be brought not later than two years after a plaintiff discovers the facts constituting the violation or five years after the violation. Plaintiffs argued that their action, commenced on February 4, 2025, was timely because they could not have discovered the facts underlying their claims, particularly with respect to scienter, until a news article was published in February 2023.
The Court explained that the cause of action accrues when either the plaintiff did discover, or when a reasonably diligent plaintiff would have discovered, the facts underlying the violation—whichever comes first. Id. at *4. The Court held that plaintiffs’ action was untimely because a reasonably diligent plaintiff would have discovered these facts prior to February 2023.
First, the Court examined plaintiffs’ complaint and determined that the allegations indicated that there were at least “storm warnings” such that a reasonably diligent plaintiff would have begun investigating by August 2022. In particular, the complaint pointed to public reporting and analyst reports about the company’s potential litigation exposure in product liability suits that had been pending since 2019, which the Court concluded “would have prompted a reasonably diligent plaintiff to investigate the [product liability] action and potential securities fraud claims prior to February 4, 2023.” Id. at *5.
In addition, the Court took judicial notice of publicly available records, including personal injury actions filed in 2021 and 2022 that alleged the company conducted studies in the 1980s that suggested the medication could be linked to an alleged carcinogen, but which the company allegedly concealed. Id. at *6. The Court also observed that, in the same time period, public news articles and expert reports publicly filed in the product liability actions similarly addressed allegations of concealed studies at the company. Id. at *7–8. The Court noted that, while the limitations period does not automatically begin to run as soon as a plaintiff is put on “inquiry notice,” in this case “there were ample ‘storm warnings’” such that a reasonably diligent plaintiff would have investigated and discovered the facts prior to February 2023. Id. at *8.
The Court then examined and rejected plaintiffs’ arguments to the contrary. While plaintiffs relied on a February 2023 news article, which they said revealed that current executives had been aware since 2019 of the allegedly concealed study from the 1980s, the Court observed that the article did not mention the individual defendants or suggest that an unnamed “senior executive” referenced in the article had any link to the individual defendants. The Court further concluded that the article was a “red herring” that had nothing to do with the theories of scienter alleged in plaintiffs’ complaint and did not show that the necessary facts were not available previously. Id. at *9.
The Court also rejected plaintiffs’ argument that the company’s denial of any knowledge of the 1980s study “dissipated any supposed ‘storm warnings.’” Id. at *10. The Court explained that this argument was “untenable,” because plaintiffs’ own allegations and publicly available documents undermined the company’s reassurances. Thus, plaintiffs could not “simply rely on reassurances by management particularly when there are direct contradictions between the [d]efendants’ representations and the other materials available to [p]laintiffs.” Id. The Court also emphasized that plaintiffs could not excuse their delay in bringing suit by arguing that “uncovering fraud is challenging” or by claiming that the public reporting lacked certain “details” or “narrow aspects” of the alleged fraud. Id. at *10–11.
