A class action lawsuit was filed against Biogen Inc. (NASDAQ:BIIB) on May 22, 2024. The plaintiffs (shareholders) alleged that they bought BIIB stock at artificially inflated prices between February 3, 2022 and February 13, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Biogen stock during that period can click here to learn about joining the lawsuit.
Biogen is a biotechnology company that focuses on developing treatments for neurology, neuropsychiatry, specialized immunology, and rare diseases. Notably, the company has a solid portfolio of drugs to treat multiple sclerosis (MS), spinal muscular atrophy, and a defining pathology of Alzheimer’s disease (AD). Biogen and Eisai Co. Ltd. jointly launched Leqembi, an FDA-approved treatment for AD. The two companies initially planned to have 10,000 patients on Leqembi by the end of March 2024.
Biogen’s Misleading Claims
The plaintiffs maintain that Biogen and three of its current and/or former senior officers (Individual Defendants) deceived investors by repeatedly making false and misleading public statements about the company’s business prospects (mainly related to the AD portfolio) and compliance policies during the Class Period.
As per the complaint, in one of the press releases, the company mentioned that it displayed the data from the ADUHELM Phase 3 clinical trials at the annual CTAD conference. Biogen said that the trials “showed a statistically significant correlation between plasma p-tau reduction and less cognitive and functional decline in [AD].” Furthermore, in an SEC filing, Biogen noted that it had adequate compliance controls, policies, and procedures in different countries where it operated. Yet, there were possibilities of violating laws or regulations by the company’s employees or agents.
Moreover, in a Compliance report for 2023, Biogen stated that it had established and maintained a compliance program. The company added that this program was maintained in accordance with industry laws and OIG Guidance (Office of the Inspector General of the U.S. Department of Health and Human Services).
Here’s How the Truth Was Revealed
The lawsuit accuses the Defendants of omitting truthful information about the adequacy of certain controls and procedures, the strength of the Company’s AD portfolio, and other issues from SEC filings and related material. Accordingly, the Defendants allegedly caused the Biogen stock to trade at artificially inflated prices during the time in question.
The information became clear in a series of events between November 8, 2023 and February 14, 2024. These events included announcements of disappointing financial results for the third quarter, fourth quarter, and full-year Fiscal 2024. Plus, the lawsuit pointed out public statements about difficulties in launching AD treatment Leqembi.
Finally, on February 14, Biogen revealed that it had received a subpoena from the DOJ (Department of Justice) asking for information about its business operations in several foreign countries. The company said that it was providing information to the SEC about the same.
Year-to-date, Biogen stock has declined nearly 12%, causing massive damages to shareholders’ returns.
