The U.S. Court of Appeals for the First Circuit has upheld a lower court’s dismissal of securities fraud allegations against Biogen, with the exception of a statement concerning the dose-response relationship of an Alzheimer’s drug. The plaintiffs, investors Nadia Shash and Amjad Khan, initiated a securities fraud class action against Biogen and former executives Michael Vounatsos, Alfred W. Sandrock Jr., and Samantha Budd Haeberlein, arguing that Biogen had contravened sections 10(B) and 20(a) of the Securities Exchange Act.
The crux of their claim was that Biogen had purportedly concealed critical data, which would have revealed their statements related to the drug’s clinical trials as potentially misleading. According to the court, “some patients did better on a lower dose and others experienced the same lack of clinical benefit whether they were on the higher dose or not.”
Of importance, the defendants neglected to disclose subgroup data which, in the court’s view, would have provided much-needed context to their “all data” declaration, thereby leading the complaint to plausibly allege that the defendants’ omission misled investors. As such, the court greenlighted the class action allegation against Biogen pertaining to statements about the Alzheimer’s drug’s dose-response relationship.
For a comprehensive explication of the case proceedings, the full court judgement can be accessed here.