Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 1 of 43
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
`
`
`
`
`Case No.
`
`CLASS ACTION
`
`COMPLAINT FOR VIOLATION OF THE
`FEDERAL SECURITIES LAWS
`
`
`JURY TRIAL DEMANDED
`
`LEONARD SHAPIRO, Individually and on
`behalf of all others similarly situated,
`
`
`
`v.
`
`BIOGEN INC., MICHEL VOUNATSOS,
`JEFFREY D. CAPELLO, MICHAEL R.
`MCDONNELL, ALFRED W. SANDROCK
`JR., and SAMANTHA BUDD
`HAEBERLEIN,
`
`
`
`Plaintiff,
`
`Defendants.
`
`
`
`
`
`
`
`
`
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 2 of 43
`
`Plaintiff Leonard Shapiro (“Plaintiff”), individually and on behalf of all others similarly situated,
`
`by and through his undersigned counsel, hereby brings this Class Action Complaint for Violation
`
`of Federal Securities Law (“Complaint”) against Biogen Inc. (“Company” or “Biogen”); Michel
`
`Vounatsos (“Vounatsos”), Biogen’s current Chief Executive Officer (“CEO”) and Director;
`
`Jeffrey D. Capello (“Capello”), Biogen’s former Chief Financial Officer (“CFO”) and Executive
`
`Vice President; Michael R. McDonnell (“McDonnell”), Biogen’s present CFO and Vice
`
`President; Alfred W. Sandrock Jr. (“Sandrock”), Biogen’s Executive Vice President and Chief
`
`Medical Officer since 2015; and Samantha Budd Haeberlein (“Haeberlein”), Biogen’s Vice
`
`President of Alzheimer’s Disease Discovery & Development, based upon, inter alia, the
`
`investigation conducted by and under the supervision of Plaintiff’s counsel, which included a
`
`review of the Company’s public documents, conference calls, and announcements, United States
`
`(“U.S.”) Securities and Exchange Commission (“SEC”) filings, wire and press releases published
`
`by and regarding the Company, analysts’ reports and advisories about the Company and readily
`
`obtainable information. Plaintiff’s counsel’s investigation into the matters alleged herein is
`
`ongoing and many relevant facts are known only to, or are exclusively within the custody or control
`
`of, the Company and Defendants Vounatsos, Capello, McDonnell, Sandrock, and Haeberlein.
`
`Plaintiff believes that substantial additional evidentiary support will exist for the allegations set
`
`forth herein after a reasonable opportunity for discovery.
`
`NATURE OF THE ACTION
`
`1.
`
`This is a federal securities class action lawsuit on behalf of a class consisting of all
`
`persons other than Defendants who purchased or otherwise acquired common shares of Biogen
`
`stock between October 22, 2019 and November 6, 2020, both dates inclusive (the “Class Period”),
`
`seeking to recover damages by Defendants’ violation of the federal securities laws and to pursue
`
`
`
`2
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 3 of 43
`
`remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange
`
`Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
`
`2.
`
`Biogen is a Delaware Company headquartered in Cambridge, Massachusetts.
`
`Biogen develops, discovers, and manufactures therapies for the treatment of neurological and
`
`neurodegenerative diseases, as well as autoimmune and hematologic disorders. One of the
`
`Company’s principal products in development is aducanumab, which is an investigational drug
`
`studied for the treatment of Alzheimer’s disease – an irreversible and progressive degenerative
`
`disorder and the leading cause of dementia.
`
`3.
`
`In 2015, with the aim of establishing aducanumab as an effective treatment for
`
`Alzheimer’s disease, Biogen launched two identical phase 3 trials, which compared the effects of
`
`2 dosing regimens of aducanumab versus placebo. At the time when approximately 50% of the
`
`participants completed 78 weeks of treatment, Biogen conducted a futility analysis to assess the
`
`ability of the ongoing clinical trials to achieve their objective. Based on the results of Biogen’s
`
`futility analysis, Biogen determined the trials were unlikely to meet their primary efficacy.
`
`Accordingly, in March 2019, Biogen announced the termination of its clinical trials.
`
`4.
`
`Despite the disappointing results of the futility analysis, Biogen was not ready to
`
`part with its vision of reaping enormous financial benefits stemming from the introduction of a
`
`breakthrough therapy for the treatment of Alzheimer’s disease. Accordingly, in October 2019 —
`
`approximately seven months after Biogen discontinued its phase 3 trials — Biogen shocked the
`
`medical community by announcing that its previously terminated trials were going to be revived
`
`based on newly analyzed data sets. Following the resurrection of aducanumab’s development
`
`program, Biogen embarked on months-long campaign to convince the investing public, as well as
`
`
`
`3
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 4 of 43
`
`the scientific community, including the FDA, that the post hoc data supported the conclusion that
`
`aducanumab was an effective solution in treating Alzheimer’s disease.
`
`5.
`
`Since the October 2019 announcement, Biogen executives disseminated dozens of
`
`false and misleading statements in which they touted the post hoc data analyses purportedly arising
`
`from its phase 3 and phase 1 clinical trials and the implications thereof on aducanumab’s regulatory
`
`approval. For example, the Individual Defendants promoted the phase 3 clinical trials as providing
`
`consistent data for the support of aducanumab’s efficacy while the phase 1 trials presented further
`
`support for aducanumab’s regulatory approval. To give credence to their courageous claims about
`
`aducanumab’s prospects of obtaining regulatory approval, Biogen painted a picture of having the
`
`support of the FDA, who purportedly was exercising an intense oversight over Biogen’s post hoc
`
`data analyses and research. Based on Defendants’ misleading claims regarding the strength and
`
`validity of its data analyses, the investing public reasonably expected that Biogen would secure
`
`regulatory approval of aducanumab during an upcoming review by the FDA Advisory Panel.
`
`6.
`
`In reality, however — and unbeknownst to the investing public — Biogen’s post
`
`hoc analyses were an effort to explain away the discordant phase 3 trial results. To achieve that
`
`objective, Biogen relied on dubious statistical gymnastics and scientifically and statistically
`
`unsound practices, which could not — and did not — withstand scrutiny by the scientific and
`
`medical community. Contrary to Biogen’s bold representations, the totality of the data did not
`
`provide sufficient evidence to support the efficacy of aducanumab for the treatment of Alzheimer’s
`
`disease.
`
`7.
`
`The investing public learned the truth on November 6, 2020, when the FDA’s
`
`independent Advisory Panel reviewed Biogen’s submission. After a seven-hour virtual meeting,
`
`the FDA Advisory Panel voted nearly unanimously that it was not “reasonable” to consider
`
`
`
`4
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 5 of 43
`
`Biogen’s research as primary evidence of effectiveness of aducanumab. In an overwhelmingly
`
`negative committee meeting, the Advisory Panel delivered harsh words of reality for Biogen,
`
`observing that its data was “strikingly incongruent” and lacked “compelling statistical review.”
`
`After the Advisory Panel’s vote, chances aducanumab’s regulatory approval significantly
`
`diminished, leaving investors shocked and disappointed.
`
`8.
`
`On this news, the price of Biogen common shares dropped $92.64 per share, or
`
`28%, to close at $236.26 per share, wiping more than $14 billion in investor wealth.
`
`9.
`
`Throughout the Class Period, Defendants made materially false and misleading
`
`statements, and failed to disclose material adverse facts about the Company’s business,
`
`operational, and compliance policies. Specifically, Defendants made false and/or misleading
`
`statements and failed to disclose to investors that: (1) Study 302, viewed independently, did not
`
`provide strong evidence that supported the effectiveness of aducanumab; (2) Study 103 did not
`
`provide supportive evidence of the effectiveness of aducanumab; (3) Study 302 could not be
`
`considered as primary evidence of effectiveness of aducanumab for the treatment of Alzheimer’s
`
`disease in light of the results of the exploratory analyses of Study 301 and 302 and the results of
`
`Study 103; (4) the totality of the data did not provide sufficient evidence to support efficacy of
`
`aducanumab for the treatment of Alzheimer’s disease; and (5) as a result, Defendants’ statements
`
`about its business, operations, and prospects, were materially false and misleading and/or lacked
`
`a reasonable basis at all relevant times.
`
`10.
`
`As a result of the Defendants’ wrongful acts and omissions, and the precipitous
`
`decline in the market value of Biogen’s common shares, Plaintiff and other Class members have
`
`suffered significant losses and damages.
`
`
`
`
`
`5
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 6 of 43
`
`JURISDICTION AND VENUE
`
`11.
`
`The claims asserted herein arise under and pursuant to §§ 10(b) and 20(a) of the
`
`Exchange Act (15 U.S.C. §§ 78j(b) and § 78t(a)) and Rule 10b-5 promulgated thereunder by the
`
`SEC (17 C.F.R. § 240.10b-5).
`
`12.
`
` This Court has jurisdiction over the subject matter of this action under 28 U.S.C.
`
`§ 1331 and § 27 of the Exchange Act, 15 U.S.C. § 78aa.
`
`13.
`
`Venue is proper in this judicial district pursuant to § 27 of the Exchange Act (15
`
`U.S.C. § 78aa) and 28 U.S.C. § 1391(b) as the alleged misstatements entered and the subsequent
`
`damages took place in this judicial district. Biogen is headquartered in this District, with its
`
`principal place of business located at 225 Binney Street, Cambridge, Massachusetts 02142.
`
`14.
`
`In connection with the acts, conduct and other wrongs alleged in this Complaint,
`
`Defendants (defined below), directly or indirectly, used the means and instrumentalities of
`
`interstate commerce, including but not limited to, the United States mail, interstate telephone
`
`communications and the facilities of the national securities exchange.
`
`PARTIES
`
`15.
`
`Plaintiff is a resident of Sarasota, Florida. As set forth in the attached Certification,
`
`incorporated by reference herein, Plaintiff acquired Biogen shares during the Class Period, at
`
`artificially inflated prices, and was damaged by the federal securities law violations and false
`
`and/or misleading statements and/or material omissions alleged herein.
`
`16.
`
`Biogen is a Delaware corporation with a principal place of business at 225 Binney
`
`Street, Cambridge, Massachusetts 02142. Biogen’s securities trade on the NASDAQ Exchange
`
`(“NASDAQ”) under the ticker symbol “BIIB.”
`
`17.
`
` Defendant Michel Vounatsos (“Vounatsos”) has served as the Company’s CEO
`
`and as a Director since January 2017.
`
`
`
`6
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 7 of 43
`
`18.
`
` Defendant Jeffrey D. Capello (“Capello”) served as the Company’s CFO and
`
`Executive Vice President from December 2017 to August 2020.
`
`19.
`
`Defendant Michael R. McDonnell (“McDonnell”) has served as the Company’s
`
`CFO and Executive Vice President since August 2020.
`
`20.
`
`Defendant Alfred W. Sandrock, Jr. (“Sandrock”) has served as the Company’s
`
`Executive Vice President and Chief Medical Officer since November 2015.
`
`21.
`
`Defendant Samantha Budd Haeberlein (“Haeberlein”) has served as the Company’s
`
`Vice President of Alzheimer’s Disease Discovery & Development since March 2020. Haeberlein
`
`joined Biogen in 2015.
`
`22.
`
`Defendants Vounatsos, Capello, McDonnell, Sandrock, and Haeberlein are
`
`sometimes referred to herein as the “Individual Defendants.” The Individual Defendants, together
`
`with Biogen, are sometimes referred to herein as the “Defendants.”
`
`23.
`
`The Individual Defendants possessed the authority to control the contents of
`
`statements made by Biogen in the Company’s reports to the SEC, press releases and presentations
`
`to securities analysis, money and portfolio managers and institutional investors, i.e., the market.
`
`The Individual Defendants were provided with copies of the Company’s reports and press releases
`
`alleged herein to be misleading prior to, or shortly after, their issuance and had the ability and
`
`opportunity to prevent their issuance or cause them to be corrected. Due to their positions with
`
`Biogen, and access to Biogen’s material information that was unavailable to the public, the
`
`Individual Defendants knew that the adverse facts described herein were not disclosed to and were
`
`being concealed from investors. The Individual Defendants are liable for the false statements and
`
`omissions alleged herein.
`
`
`
`
`
`7
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 8 of 43
`
`SUBSTANTIVE ALLEGATIONS
`
`Background
`
`24.
`
`Biogen is a global biopharmaceutical company focused on discovery, development,
`
`manufacture, and delivery of therapies for treating neurological and neurodegenerative diseases,
`
`autoimmune, and hematologic disorders. The Company’s principal marketed products include
`
`treatments for multiple sclerosis, non-Hodgkin’s lymphoma, arthritis, Crohn’s disease, psoriasis,
`
`and Alzheimer’s disease.
`
`25.
`
`Alzheimer’s disease is an irreversible, progressive neurodegenerative disorder that
`
`slowly destroys memory and thinking skills. Initial impairment in memory may be followed by
`
`behavioral and neuropsychiatric symptoms, and finally a person’s ability to perform usual daily
`
`life activities. Alzheimer’s disease is the most common cause of dementia among older adults and
`
`is ultimately fatal.
`
`26.
`
`One of Biogen’s most promising drugs in development is aducanumab (BIIB037),
`
`an investigational human monoclonal antibody (mAb) targeting amyloid-β multimers studied for
`
`the treatment of early Alzheimer’s disease. The use of aducanumab is predicated on the still-
`
`unproven “amyloid hypothesis,” which dates back to the early 1990s and posits that deposition of
`
`amyloid plaques in the brain causes the neuronal degeneration seen in Alzheimer’s disease.
`
`Deposition β-amyloid peptides into amyloid plaques begins decades prior to observable clinical
`
`symptoms, and is therefore, a fundamental pathological hallmark of the Alzheimer’s disease.
`
`27.
`
`In 2015, after promising early clinical data from the early phase Study 103, Biogen
`
`launched two identical phase 3 trials (Study 301 and Study 302). Studies 301 (ENGAGE) and 302
`
`(EMERGE) were multicenter, randomized, double-blind, placebo-controlled clinical trials to
`
`evaluate the safety and efficacy of aducanumab in reducing clinical decline, as measured on the
`
`Clinical Dementia Rating Scale – Sum of Boxes (“CDR-SB”), which is an established measure of
`
`
`
`8
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 9 of 43
`
`cognition and function in early symptomatic Alzheimer’s disease. The phase 3 studies compared
`
`the effects of 2 dosing regimes of aducanumab versus placebo over the 18-month placebo-
`
`controlled period. Participants were randomized 1:1:1 to aducanumab low dose, aducanumab high
`
`dose, or placebo.
`
`28.
`
`The phase 3 protocols and statistical analysis plans specified that an interim
`
`prespecified analysis for futility would be conducted after approximately 50% of the participants
`
`in the studies completed 78 weeks of treatment. The data cutoff for the futility analysis was
`
`December 26, 2018. The futility analysis — which was intended to assess the clinical trials’ ability
`
`to achieve the objective — showed that patients in the high-dose group (Study 302-EMERGE)
`
`exhibited -18% improvement in the conditional power for CDR-SB as compared to placebo, while
`
`patients in the low-dose group (Study 301 -ENGAGE) exhibited 15% worse results than the
`
`placebo group. Based on these results, Biogen concluded that the trials were unlikely to meet
`
`their primary efficacy endpoint upon completion. Accordingly, on March 21, 2019, Biogen and
`
`its partner Eisai, Co., Ltd. (“Eisai”) announced their decision to terminate both pivotal phase 3
`
`trials.
`
`29. Meanwhile, in an effort to understand why the studies had divergent outcomes
`
`based on the December 26, 2018 cutoff, Biogen re-ran the primary analysis using all data collected
`
`up to March 20, 2019 when the announcement to terminate the phase 3 trials was made. The new
`
`results differed from the December 2018 results, showing improved treatment effect of -22% in
`
`favor of aducanumab in Study 302 and 2% treatment effect favoring placebo in Study 301.
`
`Following these results, Biogen determined that further analyses of the phase 3 data was needed
`
`in determining the future of the aducanumab development program.
`
`
`
`9
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 10 of 43
`
`30.
`
`On June 14, 2019 and October 21, 2019, Biogen met with the FDA in a Type C
`
`meeting. During the meetings, the FDA concluded that the results of Studies 301 and 302 “might
`
`provide evidence adequate to establish the effectiveness of aducanumab for the treatment of
`
`Alzheimer’s disease.” Importantly, however, the FDA expressed skepticism that Study 301 could
`
`be used as an independent evidence of effectiveness:
`
`Available data do not suggest the future use of Study 301 as an efficacy study
`providing independent evidence of effectiveness supporting the approval of
`aducanumab for the treatment of Alzheimer’s disease.
`
`31.
`
`The October 21, 2020 Type C meeting also left unanswered questions regarding the
`
`
`
`relationship between aducanumab dose-exposure and response in Studies 301 and 302. The FDA’s
`
`position was that the combination of the positive Study 302, dose-response relationship observed
`
`in Study 103, and the numerically favorable results of similar magnitude in the low-dose groups
`
`in both studies, the high-dose group in Study 301 stood apart for the negative outcome. Thus, the
`
`October 21, 2020 Type C meeting with the FDA left many areas of inquiries uncertain.
`
`32.
`
`Notwithstanding these and other uncertainties expressed by the FDA during
`
`Biogen’s frequent interaction therewith, Biogen embarked on a public campaign to tout FDA’s
`
`purported unflinching support for the regulatory approval of aducanumab and their own overly
`
`enthusiastic conclusions about the implications of the clinical trials, which Biogen and the
`
`Individual Defendants presented as strongly supporting the efficacy of aducanumab for the
`
`treatment of Alzheimer’s disease.
`
`Materially False and Misleading Statements
`
`33.
`
`On October 22, 2019 — in light of the new statistical analyses of all data collected
`
`until March 20, 2019 — Biogen issued a shocking press release entitled “Biogen Plans Regulatory
`
`Filing for Aducanumab in Alzheimer’s Disease Based on New Analysis of Larger Dataset from
`
`Phase 3 Studies,” in which Biogen announced that it was pursuing regulatory approval based on a
`
`
`
`10
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 11 of 43
`
`new and more positive analysis from two large clinical trials previously thought to be negative. In
`
`the press release, Biogen explained that they re-analyzed data from the trials to include patients
`
`who had continued in the studies from the December 26, 2018 cut-off date for the futility analyses
`
`to March 21, 2019, when futility was announced. The press release stated in relevant part:
`
`CAMBRIDGE, Mass. and TOKYO, Oct. 22, 2019 (GLOBE NEWSWIRE) --
`Biogen (Nasdaq: BIIB) and Eisai, Co., Ltd. (Tokyo, Japan) today announced that,
`after consulting with the U.S. Food and Drug Administration (FDA), Biogen plans
`to pursue regulatory approval for aducanumab, an investigational treatment for
`early Alzheimer’s disease (AD). The Phase 3 EMERGE Study met its primary
`endpoint showing a significant reduction in clinical decline, and Biogen believes
`that results from a subset of patients in the Phase 3 ENGAGE Study who received
`sufficient exposure to high dose aducanumab support the findings from
`EMERGE. Patients who received aducanumab experienced significant benefits on
`measures of cognition and function such as memory, orientation, and language.
`Patients also experienced benefits on activities of daily living including conducting
`personal finances, performing household chores such as cleaning, shopping, and
`doing laundry, and independently traveling out of the home. If approved,
`aducanumab would become the first therapy to reduce the clinical decline of
`Alzheimer’s disease and would also be the first therapy to demonstrate that
`removing amyloid beta resulted in better clinical outcomes.
`
`The decision to file is based on a new analysis, conducted by Biogen in
`consultation with the FDA, of a larger dataset from the Phase 3 clinical studies
`that were discontinued in March 2019 following a futility analysis. This new
`analysis of a larger dataset that includes additional data that became available after
`the pre-specified futility analysis shows that aducanumab is pharmacologically and
`clinically active as determined by dose-dependent effects in reducing brain amyloid
`and in reducing clinical decline as assessed by the pre-specified primary endpoint
`Clinical Dementia Rating-Sum of Boxes (CDR-SB). In both studies, the safety and
`tolerability profile of aducanumab was consistent with prior studies of
`aducanumab.
`
`“With such a devastating disease that affects tens of millions worldwide, today’s
`announcement is truly heartening in the fight against Alzheimer’s. This is the result
`of groundbreaking research and is a testament to Biogen’s steadfast
`determination to follow the science and do the right thing for patients,” said
`Michel Vounatsos, Chief Executive Officer at Biogen. “We are hopeful about the
`prospect of offering patients the first therapy to reduce the clinical decline of
`Alzheimer’s disease and the potential implication of these results for similar
`approaches targeting amyloid beta.”
`
`Based on discussions with the FDA, the Company plans to file a Biologics
`License Application (BLA) in early 2020 and will continue dialogue with
`11
`
`
`
`
`
`
`
`
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 12 of 43
`
`regulatory authorities in international markets including Europe and Japan. The
`BLA submission will include data from the Phase 1/1b studies as well as the
`complete set of data from the Phase 3 studies.
`
`*
`
`*
`
`*
`
`Following the discontinuation of EMERGE and ENGAGE, additional data from
`these studies became available resulting in a larger dataset, which included a total
`of 3,285 patients, 2,066 of whom had the opportunity to complete the full 18 months
`of treatment. A new extensive analysis of this larger dataset showed a different
`outcome than the outcome predicted by the futility analysis. Specifically, the new
`analysis of this larger dataset showed EMERGE to be statistically significant on
`the pre-specified primary endpoint (P=0.01). Biogen believes that data from a
`subset of ENGAGE support the findings from EMERGE, though ENGAGE did not
`meet its primary endpoint. Biogen consulted with external advisors and the FDA
`on these different results and their implications.
`
`“This large dataset represents the first time a Phase 3 study has demonstrated
`that clearance of aggregated amyloid beta can reduce the clinical decline of
`Alzheimer’s disease, providing new hope for the medical community, the patients,
`and their families,” said Dr. Anton Porsteinsson, William B. and Sheila Konar
`Professor of Psychiatry, Neurology and Neuroscience, director of the University of
`Rochester Alzheimer's Disease Care, Research and Education Program (AD-
`CARE), and principal investigator. “There is tremendous unmet medical need, and
`the Alzheimer’s disease community has been waiting for this moment. I commend
`Biogen, the FDA, the medical community, and the patients and their study partners
`for their persistence in working to make today’s announcement a reality.”
`
`In EMERGE, which met its pre-specified primary endpoint in the new analysis,
`patients treated with high dose aducanumab showed a significant reduction of
`clinical decline from baseline in CDR-SB scores at 78 weeks (23% versus
`placebo, P=0.01). In EMERGE, patients treated with high dose aducanumab also
`showed a consistent reduction of clinical decline as measured by the pre-specified
`secondary endpoints: the Mini-Mental State Examination (MMSE; 15% versus
`placebo, P=0.06), the AD Assessment Scale-Cognitive Subscale 13 Items (ADAS-
`Cog 13; 27% versus placebo, P=0.01), and the AD Cooperative Study-Activities of
`Daily Living Inventory Mild Cognitive Impairment Version (ADCS-ADL-MCI;
`40% versus placebo, P=0.001). Imaging of amyloid plaque deposition in EMERGE
`demonstrated that amyloid plaque burden was reduced with low and high dose
`aducanumab compared to placebo at 26 and 78 weeks (P<0.001). Additional
`biomarker data of tau levels in the cerebrospinal fluid supported these clinical
`findings. Biogen believes that data from patients in ENGAGE who achieved
`sufficient exposure to high dose aducanumab supported the findings of
`EMERGE.
`
`In both studies, the most commonly reported adverse events were amyloid-related
`imaging abnormalities-edema (ARIA-E) and headache. The majority of patients
`
`12
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 13 of 43
`
`with ARIA-E did not experience symptoms during the ARIA-E episode, and ARIA-
`E episodes generally resolved within 4 to 16 weeks, typically without long-term
`clinical sequelae. Biogen plans to present further detail on the new analysis of the
`larger dataset from EMERGE and ENGAGE at the Clinical Trials on Alzheimer's
`Disease (CTAD) meeting in December 2019.
`
`After reviewing the data in consultation with the FDA, Biogen believes that the
`difference between the results of the new analysis of the larger dataset and the
`outcome predicted by the futility analysis was largely due to patients’ greater
`exposure to high dose aducanumab. Multiple factors contributed to the greater
`exposure to aducanumab in the new analysis of the larger dataset, including data
`on a greater number of patients, a longer average duration of exposure to high
`dose, the timing of protocol amendments that allowed a greater proportion of
`patients to receive high dose, and the timing and pre-specified criteria of the
`futility analysis.
`
`*
`
`*
`
`*
`
`34.
`
`On the same day, October 22, 2019, Biogen released a Company Presentation
`
`
`
`
`
`
`
`slideshow entitled “Aducanumab Update,” which, among other things, touted the results of the
`
`additional data from EMERGE and ENGAGE trials:
`
`
`
`
`
`13
`
`
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 14 of 43
`Case 1:2 -cv-10017-IT Document 1
`Fl en 01 05 21 Page 14 o 43
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`ENGAGE
`
`
`
`Baseline
`ES
`".33
`'51
`
`-'
`
`New nal p vanes: "'P-=1E!.IJEI1 vs p acetic.
`
`
`
`
`
`Adjustedmeanchangefrombaseline[18E]
`
`Place-be
`Low Jose
`th Jose
`
`Basal na
`'5?
`'5?
`1T'
`
`Week 25
`128
`125-
`135
`
`
`
`14
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 15 of 43
`
`
`
`35.
`
`On October 22, 2019, Biogen filed its quarterly report on SEC Form 10-Q for the
`
`period ended September 30, 2019 (the “3Q19 Report”) which was signed by Defendant Capello.
`
`Annexed to the 3Q19 Report were certifications pursuant to the Sarbanes-Oxley Act of 2002
`
`(“SOX”) signed by Defendants Vounatsos and Capello, attesting to the accuracy of financial
`
`
`
`15
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 16 of 43
`
`reporting, the disclosure of any material changes to the Company’s internal control over financial
`
`reporting and the disclosure of all fraud.
`
`36.
`
`The 3Q19 Report stated the following, regarding Biogen’s plans of obtaining
`
`regulatory approval of aducanumab:
`
`On October 22, 2019, we and Eisai Co., Ltd. (Eisai) announced that we plan to
`pursue regulatory approval for aducanumab in the U.S. and that the Phase 3
`EMERGE study met its primary endpoint showing a significant reduction in
`clinical decline. We believe that results from a subset of patients in the Phase 3
`ENGAGE study who received sufficient exposure to high dose aducanumab
`support the findings from EMERGE. The decision to file is based on a new
`analysis, conducted by Biogen in close consultation with the FDA, of a larger
`dataset from the Phase 3 EMERGE and ENGAGE trials that were discontinued
`in March 2019 following a futility analysis.
`
`37.
`
`During the Earnings Call held on October 22, 2020 to discuss the Company’s
`
`
`
`financial and operational results, several Defendants touted the results of Biogen’s clinical trials
`
`and provided overly optimistic projections as to Biogen’s ability to develop and commercialize
`
`aducanumab. For example, Defendant Vounatsos provided the following update regarding
`
`Biogen’s renewed efforts at aducanumab’s regulatory approval:
`
`This is an important day as we are announcing that based on discussion with the
`FDA, we plan to submit a regulatory filing in the US for aducanumab. If
`approved, aducanumab will become the first therapy to reduce clinical decline in
`Alzheimer's disease and the first therapy to show that removing amyloid beta can
`lead to better clinical outcomes. This is an important milestone, providing hope for
`patients, physicians, caregivers and families around the world.
`
`It is also important to highlight that the path taken in the pursuit of discovering and
`developing breakthrough treatments is not always direct and straightforward. As
`you know, in March, we announced our decision to discontinue the Phase 3
`EMERGE and ENGAGE studies for aducanumab in Alzheimer's disease, based on
`a pre-specified futility analysis. In retrospect, the results of our futility analysis
`was incorrect. Based on what we know now, it is clear that the pre-specified
`futility criteria did not adequately anticipate the effect of all the variables in these
`trials.
`
`So, what happened? First, the decision to stop these trials relied on an earlier and
`smaller dataset comprised only of patients who had the opportunity to complete 18
`months of treatment as of December 26, 2018. At that time, the futility analysis
`16
`
`
`
`
`
`

`

`Case 1:21-cv-10017-IT Document 1 Filed 01/05/21 Page 17 of 43
`
`predicted that the trials were unlikely to meet the primary endpoint upon
`completion. Futility analysis are common in large studies, and they use statistical
`modeling to attempt to predict the outcome of the studies based on a number of pre-
`specified assumptions and criteria. There are multiple methodologies that can be
`used for futility analysis and the methodology we used was a well-accepted
`approach. However, based on what we have learned, we know now that the futility
`analysis did not adequately account for the effect that the earlier enrollment in
`ENGAGE had on patients' overall exposure to high dose aducanumab.
`
`Second, in the months following the discontinuation of the studies, our team has
`continued to analyze the vast set of clinical imaging and biomarker data that the
`studies have generated. In addition to further analysis of the dataset which informed
`the futility analysis, we also gained access to an analyzed additional data, including
`data on patients who completed treatment after the cut-off date for the futility
`analysis as well as data for patients who did not complete the full duration of the
`study. Once we became aware of the potential implication of this larger dataset,
`we consulted with external advisors, followed by the FDA with a Type C Meeting
`in June, as we began conducting further analysis.
`
`38.
`
`According to Defendant Vounatsos, these “positive clinical results for aducanumab
`
`
`
`position[ed] Biogen to potentially lead the fight against Alzheimer’s disease” and to “submit[ ] the
`
`regulatory filing for aducanumab in the US while continuing the dialog with regulatory authorities
`
`in international markets, including in Europe and in Japan.” Importantly, Defendant Vounatsos
`
`concluded by reiterating Biogen is “excited to be moving ahead and preparing for regulatory filing
`
`for aducanumab on the ground of positive clinical results . . . [which] is a major step in the fight
`
`against Alzheimer’s disease and in important inflection point for Biogen’s neuroscience mission.”
`
`39.
`
`Defendant Sandrock echoed Defendant Vounatsos’ overly enthusiastic statements,
`
`reiterating the “positive results of aducanumab,” which according to Defendant Sandrock,
`
`positioned Bioge