NEW YORK, May 24, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Biogen Inc. (“Biogen” or the “Company”) (NASDAQ: BIIB) in the United States District Court for the District of Colorado on behalf of all persons and entities who purchased or otherwise acquired Biogen securities between February 3, 2022 and February 13, 2024, both dates inclusive (the “Class Period”). Investors have until July 22, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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Biogen is a global biopharmaceutical company that discovers, develops, and delivers therapies for people living with serious and complex diseases worldwide. The Company operates in various countries throughout the Americas, Europe, and Asia.
Biogen's products include, among others, Leqembi and Aduhelm for the treatment of Alzheimer's disease ("AD"), as well as various drugs for the treatment of multiple sclerosis ("MS"). Biogen's sales of its MS-related products have historically accounted for the majority of the Company's product revenues. However, in recent years, increased competition from generic biosimilars of Biogen's MS-related products have eroded those products' revenue growth and led to declining sales. As a result, the Company has increasingly focused on developing new products to bolster its revenues. Accordingly, because AD-related treatments represented a lucrative market for Biogen, the Company's AD-related products were particularly important to Defendants and investors throughout the Class Period.
In 2021, in a major set-back to the Company's development of AD treatments, Biogen was mired in controversy after investigative reports revealed that the Company had engaged in potentially improper communications with representatives of the U.S. Food and Drug Administration ("FDA") to win regulatory approval of Aduhelm for the treatment of AD, despite concerns regarding, inter alia, the drug's safety and efficacy. Biogen and the FDA's communications and conduct have been the subject of investigations by the U.S. Federal Trade Commission, the U.S. Securities and Exchange Commission ("SEC"), multiple Congressional Committees, and the Office of the Inspector General of U.S. Department of Health and Human Services.
Nor were the foregoing investigations the only source of controversy for Biogen. Separately, in 2022, the U.S. Department of Justice ("DOJ") announced that Biogen had agreed to pay $900 million to settle allegations that it had caused the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians to induce them to prescribe the Company's MS-related drugs.
Following these controversies, Biogen embarked on a campaign to purportedly enhance its transparency, corporate governance, and compliance controls and procedures. Among other things, the Company replaced its Chief Executive Officer ("CEO") in November 2022 and has since released compliance, corporate responsibility, and environmental, social, and governance reports touting the Company's purportedly enhanced compliance and governance practices.
Moreover, the controversy surrounding Aduhelm's regulatory approval has, at least in part, led to the drug's failure to gain traction in the lucrative AD-treatment market. Accordingly, Defendants and investors have been particularly focused on the launch of the Company's Leqembi product, developed in partnership with Eisai Co., Ltd. ("Eisai"), which gained FDA approval as a treatment for AD in 2023. Biogen and Eisai set a goal of having 10,000 patients on Leqembi by the end of March 2024.
In February 2023, Biogen provided non-GAAP diluted earnings-per-share ("EPS") guidance in a range of $15.00 to $16.00 per share for full year ("FY") 2023, and reaffirmed this guidance over multiple quarters.
Then, in July 2023, Biogen announced that it would acquire Reata Pharmaceuticals, Inc. ("Reata") for $172.50 per share in cash, reflecting an enterprise value of approximately $7.3 billion (the "Reata Acquisition"). The Reata Acquisition represented yet another important opportunity for Biogen to strengthen its product portfolio and offset declining MS-related treatment sales with the acquisition of Reata's drug Skyclarys, which had been approved in U.S. as the only treatment indicated for patients with Friedreich's ataxia. Biogen represented that the Reata Acquisition would only be "slightly" dilutive to Biogen's non-GAAP diluted EPS in 2023.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Biogen had overstated its efforts to enhance its transparency, corporate governance, and compliance controls and procedures, as well as the efficacy of those controls and procedures; (ii) accordingly, Biogen maintained inadequate compliance controls and procedures in connection with its business operations in foreign countries; (iii) Biogen and/or its employees were engaged in unlawful or otherwise improper conduct in several foreign countries; (iv) the foregoing subjected the Company to a heightened risk of governmental and/or regulatory scrutiny and enforcement action, as well as significant legal, financial, and reputational harm; (v) Biogen overstated the strength of its AD-related product portfolio, including the Company's and Eisai's efforts and success in launching and providing access to Leqembi; (vi) Biogen also downplayed the negative impact that the Reata Acquisition would have on its FY 2023 non-GAAP diluted EPS; (vii) all the foregoing were likely to have a significant negative impact on Biogen's 2023 results; and (viii) as a result, the Company's public statements were materially false and misleading at all relevant times.
On November 8, 2023, Biogen announced its third quarter 2023 results, including negatively revised non-GAAP diluted EPS guidance for FY 2023 in a range of $14.50 to $15.00 per share, significantly below its previous guidance of FY 2023 non-GAAP diluted EPS of $15.00 to $16.00 per share, citing approximately $0.75 of dilution from the Reata Acquisition.
On this news, Biogen's stock price fell $13.92 per share, or 5.67%, to close at $231.69 per share on November 8, 2023.
On January 8, 2024, Biogen's CEO Defendant Christopher A. Viehbacher ("Viehbacher") attended the J.P. Morgan 42nd Annual Healthcare Conference. While speaking at the conference, Defendant Viehbacher discussed challenges with the launch of Leqembi and walked back prior expectations of having 10,000 patients on the drug by the end of March 2024.
As the market digested this news, Biogen's stock price fell $10.77 per share, or 4.17%, over three consecutive trading days to close at $247.21 per share on January 11, 2024.
On January 31, 2024, Biogen announced that it was discontinuing development and commercialization of Aduhelm and "has recorded a one-time charge of approximately $60 million related to close out costs for the program in the fourth quarter of 2023."
On February 6, 2024, news reports emerged that Eisai was facing challenges with the launch of Leqembi and that only 2,000 patients in the U.S. had been administered the drug.
As the market fully digested this news, Biogen's stock price fell $5.01 per share, or 2.04%, to close at $240.54 per share on February 7, 2024.
Then, on February 13, 2024, Biogen issued a press release announcing its fourth quarter ("Q4") and FY 2023 results, including Q4 non-GAAP EPS of $2.95, missing consensus estimates by $0.23, and Q4 revenue of $2.4 billion, missing consensus estimates by $60 million and representing a 5.5% year-over-year decline. The Company disclosed that Q4 "GAAP and Non-GAAP diluted EPS [was] negatively impacted by $0.35 related to [the] previously disclosed closeout costs for ADUHELM[.]" Moreover, on a subsequent conference call to discuss these results with investors and analysts, Defendant Viehbacher confirmed that "we've got approximately 2,000 patients on [Leqembi] at the moment" and that "we have an indication that there are about 3,800 patients as of last week on the registry"—a far-cry from the 10,000-patient goal set by the Company and Eisai for the end of following month.
The foregoing disappointing results surprised investors and analysts alike, prompting multiple analyst downgrades from major financial firms in addition to a deluge of negative press publications covering these results.
Following these developments, Biogen's stock price fell $18.09 per share, or 7.39%, to close at $226.65 per share on February 13, 2024.
Finally, on February 14, 2024, Biogen disclosed in an SEC filing that it had received a subpoena from the DOJ "seeking information relating to [Biogen's] business operations in several foreign countries" and that "[t]he Company is also providing information relating to [its] business operations in several foreign countries to the SEC."
On this news, Biogen's stock price fell $5.91 per share, or 2.61%, to close at $220.74 per share on February 14, 2024.
If you purchased or otherwise acquired Biogen shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
