United States District Court, D. Massachusetts
METZLER ASSET MANAGEMENT GMBH and ERSTE-SPARINVEST KAPITALANLAGEGESELLSCHAFT MBH, on Behalf of Themselves and All Other Similarly Situated Parties, Plaintiffs,
STUART “TONY” A. KINGSLEY, GEORGE A. SCANGOS, PAUL C. CLANCY, and BIOGEN, INC., Defendants.
MEMORANDUM AND ORDER ON MOTION FOR APPOINTMENT AS
LEAD PLAINTIFF AND FOR APPROVAL OF LEAD COUNSEL
Dennis Saylor IV United States District Judge
a putative class action involving alleged violations of the
Securities Exchange Act of 1934. The Electrical Workers
Pension Fund, Local 103, International Brotherhood of
Electrical Workers brought suit, on behalf of a class of
similarly situated persons, against Biogen, Inc., and two
Biogen employees. The complaint contends that class members
were harmed when they purchased Biogen securities at prices
that were artificially inflated by the company's false
and misleading statements about its products. This action
raises issues similar to those raised in In re Biogen
Inc. Securities Litigation, No. 1:15-cv-13189 (D. Mass.)
(Biogen I), which this Court dismissed on June 23,
2016. See Biogen I, 2016 WL 3541538. An appeal of
that action is currently pending in the First Circuit.
to § 21D(a)(3)(B) of the Securities Exchange Act of
1934, 15 U.S.C. § 78u-4(a)(3)(B), three putative class
members (or groups)-Metzler Asset Management GmbH and
Erste-Sparinvest Kapitalanlagegesellschaft mbH
(“Metzler”); the City of Miami Fire Fighters'
and Police Officers' Retirement Trust (“City of
Miami”); and Frankfurt-Trust Investment GmbH and
Frankfurt-Trust Investment Luxemburg AG
(“Frankfurt-Trust”)-have each moved to be
appointed as lead plaintiff and to approve of their selection
of lead counsel. Frankfurt-Trust has also moved to stay this
litigation pending resolution of the appeal of Biogen
reasons set forth below, Metzler's motion will be
granted, and the motions of the City of Miami and
Frankfurt-Trust will be denied. Frankfurt-Trust's motion
to stay will be denied without prejudice.
otherwise noted, all facts are stated as set forth in the
is a biopharmaceutical company that develops therapies for
neurological, autoimmune, and hematologic disorders. (Compl.
¶ 2). The company's products include prescription
medicines used to treat, among other things, multiple
sclerosis. (Id.). Biogen is based in Cambridge,
Massachusetts. (Id. at ¶ 36).
Biogen's products is the drug Tecfidera, which was
approved by the Food and Drug Administration in 2013 for use
in treating multiple sclerosis (“MS”).
(Id. at ¶ 2). Tecfidera was the main driver of
Biogen's revenues in 2014 and 2015. (Id. at
¶ 3). Biogen emphasized the importance of Tecfidera in
its October 22, 2014 Form 10-Q, stating that its
“current revenues depend upon continued sales of our
principal products, ” including Tecfidera.
spring of 2014, the MS Institute at Shepherd Center in
Atlanta, Georgia-a leading prescriber of Tecfidera in the
United States-began monitoring patients taking Tecfidera for
possible side effects. (Id. at ¶ 4). The Center
observed that patients on Tecfidera were at an elevated risk
of developing low lymphocyte counts. (Id.).
Lymphoctyes are a subtype of white blood cells necessary for
proper immune system functioning. (Id.).
April and June of 2014, Biogen was aware that the Center was
reducing its Tecfidera prescriptions. (Id. at ¶
6). In August 2014, the medical director of the Center
notified Biogen that Tecfidera was causing low lymphocyte
counts among approximately 30% of its MS patients taking the
drug. (Id. at ¶ 5). At that time, the Center
stopped prescribing Tecfidera altogether, and made Biogen
aware of its decision to do so. (Id. at ¶ 7).
to the complaint, Biogen did not disclose those developments
regarding Tecfidera to the public, but rather continued to
highlight the drug's safety and growing sales.
(Id. at ¶ 8). On October 22, 2014, Biogen did
publicly disclose that an MS patient who had taken Tecfidera
for four and a half years had died of progressive multifocal
leukoencephalopathy (“PML”), an infection caused
by a virus that is dangerous for individuals with weakened
immune systems. (Id. at ¶ 9). After that
announcement, Biogen continued to promote the safety of
Tecfidera and its increasing prescription numbers, and, in
January 2015, stated that it would continue to be a major
business driver for the company. (Id. at
¶¶ 10, 14).
April 24, 2015, Biogen disclosed that the PML death was
having some effect on Tecfidera sales, stating that new
patients were being put on the drug at a slower rate than
before. (Id. ¶ 17). The next month, it stated
that fallout from the PML death was contained, and that
doctors' beliefs about the safety of the drug were back
to where they had been before the PML death. (Id.
24, 2015, Biogen announced that it was cutting its revenue
guidance in half, “based largely on revised
expectations for the growth of Tecfidera.”
(Id. at ¶ 26). Biogen's stock price, which
had closed at $385.05 per share on July 23, 2015, closed at
$300.03 per share on July 24. (Id. at ¶ 26).
October 20, 2016, the Electrical Workers Pension Fund, Local
103, International Brotherhood of Electrical Workers filed a
complaint on behalf of all purchasers of Biogen's
publicly traded securities between July 23, 2014, and July
23, 2015. The complaint contends that Biogen and the
individual defendants violated federal ...