Biogen Moves to Dismiss Suit Alleging Securities Violations for Alzheimer’s Treatment

Biogen, Inc. filed a motion to dismiss a suit that was filed against them by the Oklahoma Firefighters Pension and Retirement System on Wednesday in the District of Massachusetts. The complaint at issue alleges that the defendants violated the Exchange Act through false and misleading statements they made regarding Aduhelm, a treatment for Alzheimer’s.

Biogen is described as a “global biotechnology company that researches, develops and markets treatments for serious neurological diseases, including ADUHELM.” Biogen began examining the drug as a potential treatment for Alzheimer’s in 2016.

In March of 2019, a futility analysis for Aduhelm as a treatment was conducted by experts outside of Biogen. The analysis concluded that there was a probability that the final analysis would not show statistical significance in favor of the treatment. Despite this, Biogen continued trials and applied for Food and Drug Administration (FDA) approval in late 2019. Aduhelm was approved by the FDA in June 2021 through their accelerated approval pathway.

Following its approval, the drug’s effectiveness began being questioned such that the Centers for Medicare & Medicaid Services sharply restricted their coverage of Aduhelm, the complaint said. The restrictions on coverage led to Biogen announcing it would “substantially eliminate its commercial infrastructure supporting ADUHELM.”

The controversy caused Biogen’s stock to drop, which led to the lawsuit at hand. In their amended complaint, the plaintiff alleged that the defendants had violated Federal Securities Laws by making false and misleading statements regarding Aduhelm in an attempt to prime the market to expect the treatment’s sales to take off.

The defendants filed a motion to dismiss the amended complaint in its entirety on Wednesday. In their motion, they stated that there is no allegation within the complaint that adequately argues that a statement was false or misleading, as the complaint “fails to plead the requisite specific facts demonstrating that any of the challenged statements were false or misleading.”

The amended complaint also fails, the defendants argue, in its claim that the defendants’ alleged misconduct was done in a conscious intent to defraud. Biogen asserts that the plaintiffs do not allege specific facts that would support a “strong inference” of scienter, which is required in order to plead fraud.

Finally, the defendants explain that the second count of a violation of the Exchange Act in the plaintiff’s amended complaint should be dismissed as there is no predicate exchange act violation. Since they argue that the primary Exchange Act violations are invalid, the claim for a second violation of the Exchange Act does not stand.

The motion to dismiss is concluded by the defendants stating that the motion should be granted with prejudice.

The defendants are represented in the litigation by Skadden, Arps, Slate, Meagher & Flom, while the plaintiff is represented by Block & Leviton and Mintz Levin Cohn Ferris Glovsky and Popeo.