Class action lawsuit filed against Biogen in Tysabri recall case

Tysabri recall by Biogen Idec, particularly the news that some executives may have also engaged in insider trading, has sparked a lot of controversy. The law firm of Schatz & Nobel, P.C., has announced that a lawsuit seeking class action status has been filed in the United States District Court for the District of Massachusetts on behalf of all persons who purchased the publicly traded securities of Biogen Idec Inc. ("Biogen") between February 18, 2004 and February 25, 2005.

The Complaint alleges that Biogen violated federal securities laws by issuing false or misleading information. Specifically, defendants failed to disclose and misrepresented the following material adverse facts:

1. That TYSABRI (natalizumab), a monoclonal antibody for the treatment of Multiple Sclerosis ("MS"), posed serious immune-system side effects;
2. 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;
3. That defendants knew and/or recklessly disregarded documented facts that MS drugs can cause greater incidents of PML to occur; and
4. 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 because of two serious adverse events that have occurred in patients treated with TYSABRI in combination with AVONEX (Interferon beta-1a) in clinical trials. On this news, shares of Biogen fell $28.63 per share, or 42.44%, to close at $38.65 per share. On March 4, the second patient was also confirmed as having contracted PML.

Related article: FDA advisory on Tysabri