In re Biogen Inc. Securities Litigation
Updated: March 01, 2016
Status: Ongoing Case
Status: Ongoing Case
Biogen, a biotech leader in developing treatment for serious neurological and autoimmune diseases, fails to disclose crucial information on leading drug, following patient death
On November 18, 2015, Labaton Sucharow was appointed co-lead counsel in this securities fraud class action against Biogen Inc., a biopharmaceutical company that develops therapies for neurological, autoimmune, and hematological disorders, and three of its current and former senior executives.
Lead plaintiff alleges that the defendants made false and misleading statements that, among other things, downplayed the negative impact that a patient death had on the sales of Biogen’s leading multiple-sclerosis drug, Tecfidera, and misled the market regarding the death’s impact on physicians’ and patients’ perception of the drug’s safety profile.
Lead plaintiff filed the amended class action complaint on January 19, 2016. The defendants are due to file their responsive pleading by March 1,2016 and a hearing is currently scheduled for April 8.
The case is In re Biogen Inc. Securities Litigation, No. 15-cv-13189 (D. Mass.). Lead plaintiff is the GBR Group, Ltd. The defendants are Biogen Inc., Chief Executive Officer George Scangos, Executive Vice President and Chief Financial Officer Paul Clancy, and former Executive Vice President of Global Commercial Operations Stuart Kingsley.
Tecfidera was the main driver of the Biogen’s revenues during the class period, comprising nearly a third of the company’s total revenue.
On October 22, 2014, Biogen announced that an MS patient who had taken Tecfidera for four and a half years as part of a clinical study died of progressive multifocal leukoencephalopathy (PML). PML is an infection caused by a virus that is dangerous for individuals with a weakened immune system. This was the first time that Tecfidera, which works by suppressing the immune system, had been associated with PML.
After Biogen announced the PML death and throughout the class period, the company repeatedly and misleadingly reassured the market that the overall risk profile of Tecfidera was unchanged, that they were seeing doctors continue to prescribe it, that the number of patients as “new starts” on the drug continued to indicate sustained growth momentum, and that Tecfidera would continue to drive strong revenue growth. Biogen did not provide any indication that the PML death had materially impacted Tecfidera sales, or caused physicians to stop prescribing Tecfidera or switch patients onto other therapies out of safety concerns.
On July 24, 2015, Biogen disclosed the truth about the impact of the PML death on Tecfidera’s performance. The company announced that it was cutting its revenue guidance in half, “based largely on revised expectations for the growth of Tecfidera.”
On this news, Biogen’s common stock plummeted 22 percent in a single day.