The maker of the Alzheimer’s drug aducanumab (Aduhelm), is the subject of a class-action lawsuit alleging securities fraud. This latest development adds to the ongoing fallout following the Food and Drug Administration’s controversial approval of the drug.
The lawsuit was filed Monday in Massachusetts District Court on behalf of investors by the law firm Block & Leviton. The complaint alleges that Biogen had effectively abandoned the drug, but that the company switched course following closed-door meetings with the FDA, announcing that it would apply for approval based on a new interpretation of older clinical trial data.
Shares of Biogen stock skyrocketed to over $100 a share after this announcement, the law firm noted in a statement. But investors soon learned that Aduhelm would not be the blockbuster drug it was purported to be, nor replace Biogen’s successful multiple sclerosis drug portfolio.
Instead, FDA advisory panel members resigned in protest over the drug’s approval, which came in June. Hospital networks refused to prescribe it and major insurance companies refused to pay for it, the complaint alleges.
Medicare limits coverage, stock prices tank
Congress has since launched a probe into the approval process, and Medicare has drafted a coverage proposal that would allow only participants in clinical trials to be prescribed the drug or others of its class that are currently in the pre-approval pipeline. Following the release of the draft, Biogen’s stock price fell to $225 per share. This was more than 40% lower than where shares had traded on June 7, after the FDA approval announcement, according to Block & Leviton.
Meanwhile, patients’ advocates have argued that, with few alternatives and no other new treatments immediately in sight, the signs of potential benefits of Aduhelm are enough to allow patients access to the drug. Some lawmakers have taken up their cause, asking that the Medicare coverage proposal be altered to allow broader access.
Aduhelm targets Alzheimer’s brain plaques with the goal of slowing disease progression. But many long-term care physicians do not recommend its use in the nursing home resident population due to safety and efficacy concerns. The drug also has had slow buy-in from neurologists.
Block & Leviton is reaching out to investors who purchased Biogen shares between June 7, 2021, and Jan. 11, 2022, to potentially join in the suit.
