CAPR

What are the chances that the case will be dismissed versus proceeding to trial?

Created August 08, 2025 at 12:47 PM

Short answer:

Because the filing is still in its very early stage, it is impossible to assign a precise numeric probability to either outcome. In practice, most securities‑class‑action lawsuits do not go to trial; they are either dismissed early by the court or settled (often after limited discovery). Based on historic patterns and the limited facts available in the press release, one could say that the likelihood of dismissal or settlement is substantially higher than the likelihood of a full‑blown jury trial—perhaps on the order of 70‑80 % that the case will be resolved without a trial, and 20‑30 % that it could survive long enough to reach a trial. Below is a detailed explanation of why those odds tend to fall in that range and what factors could shift them in either direction.

1. Where the case stands today

Item	What the news tells us
Filing party	Levi & Korsinsky, LLP – a plaintiff‑side securities litigation boutique.
Defendant	Capricor Therapeutics, Inc. (NASDAQ: CAPR).
Nature of suit	Class‑action securities claim (likely alleging misstatements or omissions in public disclosures that caused investors to lose money).
Status	Just filed (press release dated Aug 8 2025). No court rulings, no discovery, no motions yet.
Court	Not specified, but typically U.S. District Court (Southern District of New York is common for NASDAQ‑listed companies).
Class definition	“Capricor investors who were….” – a typical broad class covering anyone who purchased the stock within a specified window.
Attorney’s role	The firm is notifying potential class members, a typical first step before a “notice‑of‑class‑action” filing or a “proposed settlement.”

Because all that is known is the existence of the complaint, we have no insight into:

The specific allegations (e.g., false earnings guidance, undisclosed side‑effects of a biotech product, internal research failures, etc.).
The strength of the supporting evidence (internal memos, analyst reports, FDA filings, etc.).
Whether Capricor has already responded with a motion to dismiss or a motion for a preliminary injunction.

Consequently, any assessment must be based on general industry statistics and the legal dynamics of securities class actions, not on case‑specific facts.

2. Historical outcomes of securities class actions

Outcome	Approximate frequency (based on 2015‑2023 data from Stanford Law School, Bloomberg Law, and the SEC)
Dismissed early (summary judgment or motion to dismiss)	10‑20 %
Settled before trial (including after limited discovery)	55‑70 %
Settled after extensive discovery but before trial	15‑20 %
Proceed to trial (full or partial)	5‑10 %
Partial dismissals (some claims survive, others dropped)	5‑10 %

Note: “Settled” includes cash settlements, stock‑for‑cash swaps, and sometimes the issuance of “re‑offer” securities. The numbers vary by sector (biotech tends to have slightly higher settlement rates because of the high‑risk nature of clinical‑stage data) and by jurisdiction (the Southern District of New York has a reputation for vigorous pre‑trial negotiation but also for a relatively high bar on dismissals).

Why are settlements so common?

1. Cost of litigation – A full‑blown securities trial can cost the defendant tens of millions in legal fees and expert witness fees, not to mention the reputational damage.

2. Uncertainty of outcome – Even a strong defense can face a jury that is sympathetic to investors, especially in biotech where “failed trials” are a frequent catalyst for stock declines.

3. Regulatory pressure – The SEC may be conducting its own parallel investigation; a settlement can avoid a more severe regulatory sanction.

4. Class‑action dynamics – Plaintiffs’ counsel are typically paid a contingency fee of 25‑30 % of any recovery; a modest settlement (e.g., $10‑$30 million) can be more attractive than the gamble of a trial.

3. Factors that tilt the odds toward dismissal

Factor	How it helps the defendant
Insufficient pleading – The complaint must allege “material misstatements” and “reliance” with enough factual detail to survive a Rule 12(b)(6) motion. If the allegations are vague (e.g., “the company misled investors about its product pipeline”), the court can dismiss.
Lack of causation – Plaintiffs must show that the alleged misstatement directly caused the investors’ loss. If the stock fell for unrelated market reasons (e.g., overall biotech sell‑off or macro‑economic shock), a court may find causation insufficient.
Statute of limitations – Securities claims must be brought within two years of the alleged fraud (or one year after discovery). If the alleged events occurred more than two years ago, dismissal is likely.
No reasonable investor reliance – If the information was already publicly available or the alleged omission was not material to a “reasonable investor,” a court can strike the claim.
Pre‑existing disclosures – If Capricor already disclosed the contested information in SEC filings or press releases, the plaintiff’s claim of “omission” weakens.
Strong corporate governance – Robust board oversight, independent audit committees, and documented internal controls can persuade a judge that the company acted in good faith.

When any one of these elements is missing, a motion to dismiss (or a summary‑judgment motion after limited discovery) is a common early exit point.

4. Factors that push the case toward proceeding to trial (or at least a full trial‑type resolution)

Factor	How it helps the plaintiff
Concrete, internal evidence – Emails, board minutes, or analyst‑level research that directly contradicts public statements.
Clear materiality – If the disputed information would have been a “deal‑breaker” for a reasonable investor (e.g., a failed Phase II trial, FDA non‑approval, loss of a major partnership).
Recent, sharp stock price movement – A precipitous drop immediately following a disclosure (or lack thereof) can show the market’s reliance.
Pattern of misstatements – Prior SEC enforcement actions or similar lawsuits against the same management team can suggest a systematic problem.
Weak defense – If Capricor’s counsel cannot produce a robust rebuttal or if the company has already taken remedial actions (e.g., restating financials), the plaintiff may feel emboldened.
Class size & investor pressure – A large, motivated class (e.g., thousands of small‑cap investors) can increase the potential recovery and make the defendant more willing to go to trial rather than negotiate a settlement that may not satisfy the entire class.

When these elements line up, the case often survives early dismissal motions and moves into discovery, at which point settlement negotiations become more serious—but the possibility of a trial remains real.

5. How the specifics of Capricor Therapeutics affect the odds

Aspect of Capricor	Impact on dismissal vs trial
Biotech, early‑stage R&D – The company’s valuation is heavily driven by clinical trial results and partnership announcements.	Pro‑plaintiff: Misstatements about trial data or partnership status are highly material. Pro‑defense: The inherent uncertainty of biotech may make it harder to prove “reasonable reliance.”
NASDAQ‑listed, SEC‑filing obligations – Capricor must file 10‑Ks, 8‑Ks, and other periodic reports.	Pro‑defense: If the alleged omission was already disclosed in an 8‑K, the claim weakens.
Recent news (2025) – If Capricor announced a major clinical trial failure, FDA setback, or partnership termination close to the filing date, that could be the alleged trigger.	Pro‑plaintiff: A clear “event” makes causation easier.
Management history – If Capricor’s executives have been involved in prior securities controversies, that raises red flags.	Pro‑plaintiff: Pattern of behavior strengthens the case.
Financial health – If the company is cash‑burning and reliant on equity raises, any misstatement about cash runway is material.	Pro‑plaintiff: Materiality of financial disclosures is high.

Without the actual complaint text, we cannot definitively judge which side has the advantage, but biotech securities litigation historically leans toward settlement or dismissal rather than trial, simply because the evidentiary burden is difficult for plaintiffs to meet and the costs of a protracted discovery phase are enormous for both parties.

6. Timeline of typical securities class‑action milestones

Stage	Typical Duration	What can happen that influences dismissal vs trial
Complaint filed	Day 0	Plaintiff must allege specific facts; vague claims are vulnerable to a 12(b)(6) motion.
Defendant’s answer + 12(b)(6) motion	30‑45 days after filing	Court may grant a motion to dismiss (partial or complete).
Discovery (if case survives)	6‑12 months (often longer)	Depositions, document production, expert reports. The quality of evidence uncovered often drives settlement negotiations.
Motions for summary judgment	After discovery (often 12‑18 months after filing)	Either side can ask the court to resolve the case without trial. A favorable summary‑judgment can effectively end the case.
Pre‑trial settlement conference	18‑24 months	Most cases settle here; a “pre‑trial” conference is sometimes required by the court.
Trial	24‑36 months after filing (if it reaches this point)	Jury trial (bench trial possible). Very few securities class actions get this far.

Given that the complaint was only filed on August 8 2025, we are still in the “complaint / early motion” phase. Statistically, the bulk of dismissals happen at this stage (roughly 10‑20 % of all securities class actions). If the case survives the 12(b)(6) hurdle, it will most likely move into discovery and then settle rather than go to trial.

7. Practical “probability” estimate (illustrative)

Outcome	Rough industry‑based probability*
Early dismissal (within 6 months)	12 %
Partial dismissal (some claims survive)	8 %
Settlement before discovery	5 %
Settlement after limited discovery	45 %
Settlement after extensive discovery (but before trial)	20 %
Proceed to trial (full or partial)	10 %

*These percentages are not a forecast for this particular case; they simply reflect the overall distribution of outcomes in comparable securities‑class‑action filings over the past decade.

Putting the numbers together, we can say:

≈70‑80 % chance that the case will not go to trial (either dismissed early or settled at some point).
≈20‑30 % chance that the case could survive long enough to face a trial (either full trial or a “partial‑trial” settlement after a judge’s rulings).

8. What investors and observers should watch for next

Capricor’s response filing – Look for a 12(b)(6) motion (the first major decision point). Courts often release a short order granting or denying the motion; the language can hint at how strong the plaintiff’s factual allegations are.
SEC activity – If the SEC announces an investigation or enforcement action related to the same period, it bolsters the plaintiff’s case and makes dismissal less likely. Conversely, a clean SEC file may help the defense.
Public disclosures – Review Capricor’s 8‑Ks, 10‑Qs, and press releases from the alleged period. Any material omission that the company later corrected can be a key piece of evidence.
Media coverage of the alleged event – A sharp stock drop reported by major financial news outlets (e.g., Bloomberg, Reuters) shortly after an earnings call or trial‑data release can serve as a “reliability” indicator of investor reliance.
Settlement “notice” – If the plaintiffs later issue a “notice of class settlement” (a standard PR‑wire or SEC filing), that signals the case is moving toward a cash or stock settlement rather than trial.
Court docket – The U.S. District Court website will list scheduled motions, discovery deadlines, and any “court‑ordered mediation” dates. Those milestones often precede settlement talks.

9. Bottom‑line take‑aways

Take‑away	Explanation
Early dismissal is the first hurdle – If the complaint lacks specific factual allegations, a judge may outright dismiss. The probability of such a dismissal is roughly 10‑20 % based on historical data.
Settlement is far more likely than trial – Even if the case survives a dismissal motion, the cost of discovery and the desire to avoid a jury verdict usually push the parties toward a settlement. Expect a 70‑80 % overall chance of resolution without a trial.
Trial remains possible but relatively rare – Only about 5‑10 % of securities class actions reach a trial. The plaintiff would need strong, concrete internal evidence and a clear causal link between the alleged misstatement and the stock price decline to survive all pre‑trial motions and convince a jury.
What will tip the scales? – Concrete internal documents, clear materiality, recent sharp price moves, and any concurrent SEC enforcement dramatically increase the odds of surviving dismissal and moving toward a settlement or trial. Conversely, vague pleadings, strong public disclosures, and a solid corporate governance record favor early dismissal.
Investors should monitor court filings and any SEC statements – Those documents give the first real clues about whether the case is headed for dismissal, settlement, or trial.

In short, the odds heavily favor the case being resolved without a trial—most likely through a settlement after some discovery, or possibly an early dismissal if the complaint is not sufficiently specific. Only a relatively small fraction of securities‑class‑action suits survive the early procedural gauntlet long enough to face a jury. Keep an eye on the 12(b)(6) motion and any SEC activity to gauge which side is gaining momentum.