The US Securities and Exchange Commission has launched a formal inquiry into the withdrawal of Biogen Idec’s multiple sclerosis drug Tysabri (natalizumab) – which was developed and co-marketed with Ireland’s Elan Corp.
Biogen Idec earned just under $6 million dollars from sales of Tysabri during the first quarter of the year, until its withdrawal in February after reports of a rare brain infection in patients taking the drug [[01/03/05a]], but could face untold damages if allegations prove true.
A number of class action lawsuits and shareholder derivative actions have already been filed against the company, charging it with making misleading statements regarding Tysabri’s side effects in order to gain approval, thus artificially inflating the share price. It also claims that insiders concealed information regarding Tysabri “for personal profit” – last month Biogen Idec’s vice president and general counsel resigned after revelations he sold 90,000 shares on February 18, the same day Biogen Idec notified the FDA of Tysabri’s side effect [[10/03/05c]], [[02/03/05b]].
Now, the SEC has made its inquiry into possible violations of securities law formal and Biogen Idec says it will cooperate fully with the SEC in its investigation.