Biogen has forged a settlement with investors who claimed the company misled them in describing how it gained a controversial FDA approval for failed Alzheimer’s treatment, Aduhelm.
The agreement—terms of which were not disclosed—comes more than four years after investors filed the lawsuit in federal court in Massachusetts. With the settlement, the parties avoid a trial that was previously scheduled for May 4.
Plaintiffs who filed the suit bought stock in the company between June 7, 2021, and Jan. 22, 2022. The first date was when Aduhelm was approved on an accelerated basis, with the nod triggering a 52% increase in Biogen’s share price to $434.
The second date was shortly after the Centers for Medicare and Medicaid Services released a draft opinion, saying it would pay for Aduhelm only if patients were in a confirmatory clinical trial. With that news, Biogen’s share price fell to $225.
The surprise approval came two years after Biogen announced it was abandoning its efforts to bring Aduhelm to market, citing the discontinuation of two pivotal trials.
In a shocking development, six months after that, Biogen announced its plan to file for approval based on one of the trials meeting its primary endpoint in reducing clinical decline. The company added that it believed a subset of data from patients in the other study—who'd received a high dose of the drug—supported that readout.
In their lawsuit, the investors said Biogen “omitted to reveal that the data was the exact same data that they determined, just six months earlier, rendered Aduhelm futile and unapprovable.”
Biogen execs also “failed to reveal their secret, behind-the-scenes collaboration,” with an FDA official who facilitated the approval, the lawsuit alleged.
The investors also claimed that Biogen had been in discussions with Medicare and third-party payers, “suggesting” that they agreed to pay Biogen’s price of $56,000-per-year price, which investors referred to in the lawsuit as “exorbitant.” In reality, the drug failed to gain meaningful uptake because of concerns over its efficacy and cost.
In September of 2022, Biogen won the dismissal of the lawsuit, but 13 months later, an appeals court reversed the ruling—in part—citing a statement by Biogen's former chief medical officer, Al Sandrock, in a 2020 quarterly conference call in which he touted the effectiveness of Aduhelm’s higher dose.
“I think our data are all consistent with that,” Sandrock said.
In January of 2024, Biogen said it was discontinuing its efforts to develop and market Aduhelm to focus on its other Alzheimer’s treatment, Eisai-partnered Leqembi.