Biogen confirms securities law probe

BIOGEN IDEC INC yesterday said US securities regulators are formally probing whether there were any violations of securities laws related to suspension of its multiple sclerosis drug Tysabri.

Biogen, which sold Tysabri in partnership with Irish drugmaker Elan Corp, said it received the formal order of investigation on April 21.

Biogen, which recently withdrew the drug after several patients developed a rare but potentially fatal brain infection, said it was cooperating with the investigation, which is being led by the Boston District Office of the Securities and Exchange Commission (SEC).

The SEC is investigating whether any violations of the federal securities laws occurred in connection with the suspension of marketing and commercial distribution of Tysabri, Biogen said in the filing.

The move by the SEC steps up an informal inquiry by the agency disclosed earlier this month.

Biogen, in its annual report, had said the informal inquiry was probing its involvement in the Tysabri suspension and the trading of its securities by its directors, officers and employees.

Biogen said it has received letters on behalf of some shareholders claiming certain Biogen officers and directors breached their fiduciary duty by selling personally-held shares while in possession of non-public information about Tysabri.

Biogen’s shares have fallen nearly 50% since the end of February when it suspended sales of Tysabri.

The drug was expected to generate $1 billion in annual sales.

Biogen’s chief counsel, Thomas Bucknum, had resigned in March after regulatory filing revealed he had reaped a windfall profit from selling Biogen shares just before the company announced it was suspending sales of Tysabri.

On Thursday, Elan chief executive Kelly Martin said he believed the drug could make a comeback.

Shares of Biogen were up a penny at $35.99 in premarket trade on the Inet electronic network.