Biogen faces class action lawsuits in Tysabri recall case
After Tysabri recall announcement by Biogen and Elan, there have been several reports of insider trading by Biogen executives. In fact it is now being reported that the company management did not really have patient safety and drug development as their highest priorities. The company executives were simply more interested in pumping the stock and then getting out when the story unfolded.
No surprise then that shares of both companies are hurting. There are rumors that Elan may not even survive the controversy. And then come the class action lawsuits, along with a formal investigation by the United States Securities and Exchange Commission (SEC).
The latest lawsuit filed by Stull, Stull & Brody charges Biogen, William Rastetter, and James Mullen with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following materially adverse facts which were known to defendants or recklessly disregarded by them:
No surprise then that shares of both companies are hurting. There are rumors that Elan may not even survive the controversy. And then come the class action lawsuits, along with a formal investigation by the United States Securities and Exchange Commission (SEC).
The latest lawsuit filed by Stull, Stull & Brody charges Biogen, William Rastetter, and James Mullen with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following materially adverse facts which were known to defendants or recklessly disregarded by them:
- That TYSABRI posed serious immunity-system side effects;
- That TYSABRI, like other MS drugs, made patients susceptible to progressive multifocal leukoencephalopathy ("PML") by changing the way certain white blood cells function thereby allowing PML, a normally dormant virus, to run rampant within the human body;
- That defendants knew and/or recklessly disregarded documented facts that MS drugs can cause greater incidents of PML to occur; and
- That defendants concealed these facts in order to fast track TYSABRI for FDA approval so that they could reap the financial benefits from the sales of the drug.
On February 28, 2005, before the market opened, Biogen announced a voluntary suspension in the marketing of TYSABRI (natalizumab), a treatment for multiple sclerosis (MS) because of two serious adverse events that have occurred in patients treated with TYSABRI in combination with AVONEX) (Interferon beta-1a) in clinical trials. News of this shocked the market. Shares of Biogen fell $28.63 per share, or 42.44 percent, to close at $38.65 on unusually high trading volume.
Recommended article: Class action lawsuit filed against Biogen in Tysabri recall case
<< Home