Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 1 of 90
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`UNITED STATES DISTRICT COURT
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`DISTRICT OF MASSACHUSETTS
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`NO.
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`
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`DEMAND FOR JURY TRIAL
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`
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`
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`THE BOOTH FAMILY TRUST, derivatively
`on behalf of BIOGEN INC.,
`
`
`Plaintiff,
`
`vs.
`
`
`MICHEL VOUNATSOS, STELIOS
`PAPADOPOULOS, ALEXANDER J.
`DENNER, CAROLINA D. DORSA, JESUS
`B. MANTAS, WILLIAM A. HAWKINS,
`NANCY L. LEAMING, RICHARD C.
`MULLIGAN, BRIAN S. POSNER, ERIC K.
`ROWINSKY, and STEPHEN A. SHERWIN,
`
`
`
`
`-and-
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`BIOGEN INC.,
`
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`Defendants,
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`Nominal Defendant.
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`
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`
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`VERIFIED STOCKHOLDER DERIVATIVE COMPLAINT
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`Plaintiff, the Booth Family Trust, by its undersigned attorneys, brings this stockholder
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`derivative action on behalf of nominal defendant Biogen Inc. (“Biogen” or the “Company”)
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`against the members of the Company’s Board of Directors for their breaches of fiduciary duties,
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 2 of 90
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`violations of the federal securities laws, and other misconduct that resulted in material damage to
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`the Company and its stockholders. These allegations are made upon personal knowledge with
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`respect to Plaintiff and, as to all other matters, upon information and belief based upon the
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`investigation and analysis by Plaintiff’s counsel, including, among other things, a review of the
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`Company’s press releases and public filings with the United States Securities and Exchange
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`Commission (“SEC”), corporate governance documents published on the Company’s website,
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`transcripts of Biogen investor conference calls, news reports, financial analyst reports, and other
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`publicly available information about the Company. Plaintiff believes that substantial additional
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`evidentiary support will exist for the allegations after a reasonable opportunity for discovery.
`I.
`
`NATURE OF THE ACTION
`1.
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`This is a stockholder derivative action brought by Plaintiff on behalf of Biogen
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`against the current members of its Board of Directors (the “Board” or the “Individual
`
`Defendants”) for their breaches of fiduciary duties, violations of the federal securities laws, and
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`other misconduct.
`2.
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`The Individual Defendants were required as directors of a public company to
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`fulfill the highest fiduciary duties of loyalty, good faith and due care. As part of their fiduciary
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`duties, they were required to ensure that Biogen implemented and maintained an effective system
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`of internal controls to ensure that the Company operated in compliance with the laws, rules and
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`regulations that guide its core operations. Likewise, they were required to act when faced with
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`red flags of misconduct. The Individual Defendants utterly failed to fulfill these fiduciary duties
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`owed to Biogen and its stockholders.
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`3.
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`The Individual Defendants’ failures to fulfill their fiduciary duties has resulted in
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`significant damage to Biogen and its stockholders, leading to a substantial fine and censure by
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`the federal government, a securities fraud class action lawsuit, and a lawsuit for close to two
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`billion dollars in damages brought by an insurance provider.
`4.
`
`First, the Department of Justice charged Biogen and co-conspirators of running a
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`“seed and sweep” scheme in violation of the Anti-Kickback Statute (“AKS”) in connection with
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`its sales and marketing practices for three multiple sclerosis drugs, Tysabri, Avonex, and
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`Tecfidera (collectively the “MS Drugs”). Biogen initially “seeded” the market by dispensing the
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`MS Drugs free of charge to thousands of patients who did not have insurance coverage or whose
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`insurance did not cover the prohibitively priced drugs. Biogen then proceeded to “sweep” the
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`patients from its free-drug program into Medicaid Part D, and illegally covered the patients’
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`substantial co-pays by funneling money through patient assistance programs (“PAPs”).
`5.
`
`In 2016, Biogen disclosed that the United States Department of Justice (the “DOJ”)
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`had subpoenaed records regarding the Company’s sales and marketing practices. A whistleblower
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`suit was subsequently brought against Biogen under the False Claims Act, 31 U.S.C. § 3730
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`(b)(2), and related state laws (the “Whistleblower Action”) detailing the illegal seed and sweep
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`scheme. After conducting a thorough investigation into Biogen and the PAPs, the DOJ
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`intervened in the Whistleblower Action. Ultimately, Biogen was fined $22 million and its co-
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`conspirators fined millions more for their parts in the scheme.1
`
`
`Department of Justice, Office of Public Affairs, Biogen Agrees to Pay $22 Million to
`1
`Resolve Alleged False Claims Act Liability for Paying Kickbacks, Dec. 17, 2020,
`https://www.justice.gov/opa/pr/biogen-agrees-pay-22-million-resolve-alleged-false-claims-act-
`liability-paying-kickbacks; Department of Justice, U.S. Attorney’s Office, Third Foundation
`Resolves Allegations that it Conspired with Pharmaceutical Companies to Pay Kickbacks to
`3
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 4 of 90
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`6.
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`The damage to Biogen from the Individual Defendants’ breaches of fiduciary duty
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`and other misconduct continues, however, as Biogen was recently sued for close to two billion
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`dollars by Humana, a Medicaid insurance provider, to recover the amounts it paid to cover
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`improper Medicaid claims submitted as part of the seed and sweep scheme.
`7.
`
`Second, Biogen engaged in a scheme to tailor data from clinical studies for its
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`drug to treat Alzheimer’s disease, aducanumab, and to pressure the United States Food and Drug
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`Administration (the “FDA”) to approve the drug.
`8.
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`In March of 2019, the Company terminated its clinical trials of aducanumab
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`because they indicated that the drug was not effective. In light of the importance of the drug to
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`Biogen’s business plan, however, Biogen determined to adjust the data and findings from its
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`clinical studies to make it appear that a different conclusion could be reached. Behind the
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`scenes, Biogen’s Chief Medical Officer secretly met with the Head of the FDA Office of
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`Neuroscience, an old colleague, to push for approval. Biogen officials and FDA officials
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`subsequently agreed to collaborate on getting FDA approval for aducanumab. The Board appears
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`to have been expressly informed of the improper agreement.
`9.
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`Despite this collaboration, and attempts to conceal negative data analyses, an
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`FDA advisory committee (“Advisory Committee”) voted almost unanimously against the
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`approval of the Alzheimer drug. Regardless, Biogen pressed forward. Eventually, the head of
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`the FDA’s oncology office extended a lifeline to the Company by suggesting accelerated
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`approval of the drug based on its ability to remove plaque, an angle Biogen had never seriously
`
`
`Medicare Patients, Nov. 20, 2019, https://www.justice.gov/usao-ma/pr/third-foundation-
`resolves-allegations-it-conspired-pharmaceutical-companies-pay-kickbacks.
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 5 of 90
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`pursued. At a meeting convened to determine whether the FDA would approve aducanumab for
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`its ability to remove plaque, Biogen worked with its FDA collaborators to invite, and empower
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`with a vote, the heads of certain FDA offices with no connection to Alzheimer drugs.
`10.
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`On June 7, 2021, the FDA approved aducanumab. The decision and a subsequent
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`investigative report revealing the collaboration between Biogen and the FDA were met with
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`shock and dismay by regulators, hospitals and clinics. Three of nine permanent Advisory
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`Committee members resigned, with one calling the approval “probably the worst drug approval
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`decision in recent U.S. history.”2
`11.
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`The government launched several investigations into the approval and dozens of
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`hospitals and more than a thousand outpatient clinics refused to prescribe the Alzheimer drug,
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`arguing against its efficacy. The SEC and the Federal Trade Commission (“FTC”) have also
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`launched independent investigations. Insurers called the drug “experimental and investigational”
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`and refused to cover it. The FDA is investigating the recent death of a patient shortly after taking
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`aducanumab.
`12.
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`Two securities class actions have since been filed against the Company and
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`certain of its directors and officers for their false and misleading statements and material
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`omissions concerning the clinical trials of aducanumab and its approval by the FDA that
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`artificially inflated the price of Biogen stock. The Company is subject to substantial costs
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`defending itself in the lawsuits and will be subject to substantial further costs in resolving them.
`
`
`Jeffrey Toobin, The Road to Aduhelm: What One Ex-FDA Adviser Called ‘Probably the
`2
`Worst Drug Approval Decision in Recent US History’ for an Alzeheimer’s Treatment, CNN,
`Sept. 27, 2021, https://www.cnn.com/2021/09/26/politics/alzheimers-drug-aduhelm-fda-
`approval/index.html.
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 6 of 90
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`13.
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`In its latest Proxy Statement, Biogen made certain materially false and misleading
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`statements and omissions regarding the Board’s oversight and risk management practices,
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`corporate governance practices, and commitment to the recoupment of illegally obtained
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`compensation. The Proxy Statement also omitted material information concerning the
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`Company’s lack of internal controls and violations of healthcare laws, rules, and regulations.
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`These false and misleading statements and omissions were intended to—and did—induce
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`shareholder approval of the election of nearly all of the Individual Defendants to the Board.
`14.
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`Plaintiff did not make a demand prior to bringing this action because it would be
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`futile. The Company’s directors are neither disinterested nor independent. In the absence of this
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`action, Biogen will neither recover its damages nor properly remediate the weaknesses in its
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`internal controls and corporate governance practices and procedures.
`
`II.
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`JURISDICTION AND VENUE
`15.
`
`This Court has original jurisdiction over this action pursuant to 28 U.S.C. § 1331
`
`because Plaintiff alleges claims arising under the laws of the United States. The Court has
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`supplemental jurisdiction over the state law claims asserted herein pursuant to 28 U.S.C. §
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`1367(a) because they are related to the claims arising under this Court’s original jurisdiction and
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`part of the same case or controversy. This derivative action is not a collusive action to confer
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`jurisdiction on a court of the United States that it would not otherwise have.
`16.
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`This Court has personal jurisdiction over each of the Defendants because each
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`Defendant is either a corporation conducting business and maintaining operations in this District
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`or is an individual who is either present in this District for jurisdictional purposes or has
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 7 of 90
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`sufficient minimum contacts with this District so as to render the exercise of jurisdiction by this
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`Court permissible under traditional notions of fair play and substantial justice.
`17.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391. Biogen maintains
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`its principal executive offices in this District. Thus: (i) one or more of the Individual Defendants
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`either resides or maintains executive offices in this District; (ii) a substantial portion of the
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`transactions and wrongs complained of herein occurred in this District; and (iii) the Individual
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`Defendants have received substantial compensation in this District by doing business and
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`engaging in activities having an effect in the District.
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`III.
`
`PARTIES
`A.
`18.
`
`Plaintiff
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`Plaintiff acquired Biogen shares in June 2009 and has held those shares
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`continuously since that time. As such, Plaintiff was a Biogen shareholder at the time of the
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`transactions complained of herein.
`B.
`
`Defendants
`1.
`
`Nominal Defendant Biogen Inc.
`
`19.
`
`Nominal Defendant Biogen is a global biotechnology company with its principal
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`place of business in this District at 225 Binney Street, Cambridge, MA 02142. Biogen’s common
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`stock trades on the New York Stock Exchange (“NYSE”) under the ticker symbol “BIIB.”
`2.
`
`Individual Defendants
`a.
`
`Defendant Vounatsos
`
`20.
`
`Defendant Michel Vounatsos (“Vounatsos”) is Biogen's Chief Executive Officer
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`(“CEO”) and has served as a director since January 2017. Vounatsos joined Biogen as Executive
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 8 of 90
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`Vice President & Chief Commercial Officer in April 2016, holding that role until his promotion
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`to CEO on January 6, 2017.
`21.
`
`As of April 5, 2021, Vounatsos beneficially owns 53,072 Biogen shares.
`
`According to the Company’s Proxy Statement, he received the compensation outlined in the
`
`chart below for fiscal year 2020:
`
`
`
`Salary
`
`Stock Awards
`
`2020 $1,500,000
`
`$13,887,064
`
`
`
`
`
`
`
`
`
`
`
`
`
`b.
`
`Non-Equity
`Plan
`Compensati
`on
`$2,565,000
`
`
`
`Other
`Compens
`ation3
`$719,303
`
`Totals
`
`$18,659,829
`
`
`
`
`
`
`
`
`
`
`
`
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`Defendant Papadopoulos
`
`22.
`
`Defendant Stelios Papadopoulos (“Papadopoulos”) has served as a Biogen
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`director since 2008 and has served as Chair of the Board since 2014. Papadopoulos is a member
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`of the Corporate Governance Committee. Papadopoulous co-founded Anadys Pharmaceuticals,
`
`Inc. (“Anadys”) and was a member of its board of directors until its acquisition by F. Hoffmann-
`La Roche AG in 2011, serving as the Chairman of the Board during 2011. Papadopoulos is an
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`Adjunct Associate Professor of cell biology at New York University School of Medicine
`
`(“NYU”).
`
`
`3 Included in this figure is $264,358 which represents a change in pension value and
`nonqualified deferred compensation earnings.
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`
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 9 of 90
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`23.
`
`As of April 5, 2021, Papadopoulos beneficially owns 34,771 Biogen shares.
`
`Defendant Papadopoulos received the compensation outlined in the chart below for serving as a
`
`Biogen director in fiscal year 2020:
`
`
`
`2020
`
`Fees earned
`or paid in cash
`$215,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$444,822
`
`$10,000
`
`$669,822
`
`
`
`
`
`24.
`
`c.
`
`Defendant Denner
`
`Defendant Alexander J. Denner (“Denner”) has served as a Biogen director since
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`2009. Denner is also the Chair of the Corporate Governance Committee. Denner is a founding
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`partner and Chief Investment Officer of Sarissa Capital Management L.P. (“Sarissa”), a
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`registered investment advisor. Before founding Sarissa, Denner served as a Senior Managing
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`Director at Icahn Capital L.P. (“Icahn Capital”) for five years. Denner sat on the board of
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`Bioverativ Inc. (“Bioverativ”), a spinoff from Biogen, from 2017 until it was sold to Sanofi S.A.
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`(“Sanofi”), a French multinational pharmaceutical corporation, in 2018. Denner also previously
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`served as a director of ImClone Systems (“ImClone”) before its sale to Eli Lilly and Company
`
`(“Eli Lilly”).
`25.
`
`As of April 5, 2021, Denner beneficially owns 655,954 Biogen shares. Defendant
`
`Denner received the compensation outlined in the chart below for serving as a Biogen director in
`
`fiscal year 2020:
`
`
`
`2020
`
`Fees earned
`or paid in cash
`$155,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$269,314
`
`$15,000
`
`$439,314
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 10 of 90
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`d.
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`Defendant Dorsa
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`26.
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`Defendant Caroline D. Dorsa (“Dorsa”) has served as a Biogen director since
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`2010. Dorsa serves as the Chair of the Audit Committee.
`27.
`
`As of April 5, 2021, Dorsa beneficially owns 21,097 Biogen shares. Defendant
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`Dorsa received the compensation outlined in the chart below for serving as a Biogen director in
`
`fiscal year 2020:
`
`
`
`2020
`
`
`
`28.
`
`Fees earned
`or paid in cash
`$155,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$269,314
`
`N/A
`
`$424,314
`
`e.
`
`Defendant Leaming
`
`Defendant Nancy E. Leaming (“Leaming”) has served as a Biogen director since
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`2008 and is a member of the Audit Committee. Leaming currently sits on the board of directors
`
`of Rosie’s Place, a non-profit organization, and serves as Chair of its Audit Committee.
`29.
`
`As of April 5, 2021, Leaming beneficially owns 12,988 Biogen shares. Defendant
`
`Leaming received the compensation outlined in the chart below for serving as a Biogen director
`
`in fiscal year 2020:
`
`
`
`2020
`
`Fees earned
`or paid in cash
`$140,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$269,314
`
`$28,500
`
`$437,814
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`
`
`
`
`
`
`
`f.
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`Defendant Mantas
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`30.
`
`Defendant Jesus B. Mantas (“Mantas”) has served as a Biogen director since 2019
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`and is a member of the Audit Committee.
`31.
`
` As of April 5, 2021, Mantas beneficially owns 2,943 Biogen shares. Defendant
`
`Mantas received the compensation outlined in the chart below for serving as a Biogen director in
`
`fiscal year 2020:
`
`
`
`2020
`
`Fees earned
`or paid in cash
`$140,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$269,314
`
`N/A
`
`$409,314
`
`
`
`
`
`g.
`
`Defendant Hawkins
`
`32.
`
`Defendant William A. Hawkins (“Hawkins”) has served as a Biogen director
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`since 2019 and is a member of the Audit Committee.
`33.
`
`As of April 5, 2021, Hawkins beneficially owns 2,045 Biogen shares. Defendant
`
`Hawkins received the compensation outlined in the chart below for serving as a Biogen director
`
`in fiscal year 2020:
`
`
`
`2020
`
`Fees earned
`or paid in cash
`$140,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$269,314
`
`N/A
`
`$409,314
`
`
`
`h.
`
`Defendant Mulligan
`
`34.
`
`Defendant Richard C. Mulligan (“Mulligan”) has served as a Biogen director
`
`since 2009 and is a member of the Compensation and Management Development Committee
`
`(the “Compensation Committee”). Mulligan previously served as a Portfolio Manager at Icahn
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 12 of 90
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`Capital from 2017 to 2018. Mulligan was also a founding partner of Sarissa and previously
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`served as a director on the board of ImClone before its sale to Eli Lilly.
`35.
`
`As of April 5, 2021, Mulligan beneficially owns 12,954 Biogen shares.
`
`Defendant Mulligan received the compensation outlined in the chart below for serving as a
`
`Biogen director in fiscal year 2020:
`
`
`
`2020
`
`Fees earned
`or paid in cash
`$140,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$269,314
`
`N/A
`
`$409,314
`
`
`
`
`
`i.
`
`Defendant Posner
`
`36.
`
`Defendant Brian S. Posner (“Posner”) has served as a Biogen director since 2008
`
`and is Chair of the Compensation Committee. Posner was Chair of the Board of Bioverativ until
`
`it was acquired by Sanofi. Posner was previously on the board of Anadys, the biopharmaceutical
`
`company founded by Papadopoulos.
`37.
`
`As of April 5, 2021, Posner beneficially owns 7,760 Biogen shares. Defendant
`
`Posner received the compensation outlined in the chart below for serving as a Biogen director in
`
`fiscal year 2020:
`
`
`
`2020
`
`Fees earned
`or paid in cash
`$140,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$269,314
`
`$25,000
`
`$434,314
`
`
`
`
`
`
`
`
`j.
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`Defendant Rowinsky
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`38.
`
`Defendant Eric K. Rowinsky (“Rowinsky”) has served as a Biogen director since
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`2010 and is a member of the Corporate Governance Committee. Rowinsky is an Adjunct
`
`Professor of Medicine at New York University. Rowinsky previously served as a director on the
`
`board of ImClone before its sale to Eli Lilly.
`39.
`
`As of April 5, 2021, Rowinsky beneficially owns 17,069 Biogen shares.
`
`Defendant Rowinsky received the compensation outlined in the chart below for serving as a
`
`Biogen director in fiscal year 2020:
`
`Fees earned
`or paid in cash
`
`Stock Awards
`
`Other Compensation
`
`Totals
`
`2020
`
`$140,000
`
`$269,314
`
`N/A
`
`$409,314
`
`
`
`
`
`k.
`
`Defendant Sherwin
`
`40.
`
`Defendant Stephen A. Sherwin (“Sherwin”) has served as a Biogen director since
`
`2010 and is a member of the Audit Committee.
`41.
`
`As of April 5, 2021, Sherwin beneficially owns 16,328 Biogen shares. Defendant
`
`Sherwin received the compensation outlined in the chart below for serving as a Biogen director
`
`in fiscal year 2020:
`
`
`
`2020
`
`
`
`Fees earned
`or paid in cash
`$140,000
`
`Stock Awards
`
`Other Compensation Totals
`
`$269,314
`
`N/A
`
`$409,314
`
`IV.
`
`THE INDIVIDUAL DEFENDANTS’ DUTIES
`42.
`
`By reason of their positions as officers and directors of Biogen, and because of
`
`their ability to control the business and corporate affairs of Biogen, the Individual Defendants
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 14 of 90
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`owed and owe Biogen and its stockholders fiduciary obligations of loyalty, good faith, due care,
`
`and candor. The Individual Defendants were and are required to use their utmost ability to
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`control and manage Biogen in a fair, just, honest, and equitable manner and to ensure that
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`Biogen is and was complying with federal, state and local laws, rules and regulations relevant to
`
`its operations. The Individual Defendants were also responsible for ensuring that complete and
`
`accurate information was disseminated to government agencies, the Company’s stockholders and
`
`the investing public.
`43.
`
`To discharge their duties, the officers and directors of Biogen were required to
`
`exercise reasonable and prudent supervision over the management, policies, practices, and
`
`controls of the financial and corporate affairs and assets of the Company. By virtue of such
`
`duties, the directors of Biogen were required to, among other things4:
`
`x
`Review, approve, and monitor the Company’s fundamental financial and
`business strategies and related risks, including major corporate actions, material
`transactions, material
`research and development activities,
`significant
`manufacturing activities, intellectual property strategy and material government
`and other investigations;
`
` x
`
`
`Oversee and review the Company’s risk framework and governance and
`management’s exercise of its responsibility to assess, monitor and manage the
`Company’s significant risk exposures; and
`
` x
`
`
`Ensure processes are in place for maintaining the integrity of the
`Company, including with respect to its reputation, financial statements, public
`disclosures, compliance with law and ethics and relationships with patients, the
`medical community and other stakeholders.
`
`
`
`Biogen, Corporate Governance Principles, https://investors.biogen.com/static-
`4
`files/41ef931f-311c-45ea-abc8-686d1eddb1c4 (last visited Jan. 18, 2022).
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`44.
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`Additionally, under Biogen’s Corporate Governance Guidelines, each director is
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`required to “to act ethically at all times and to acknowledge their adherence to the policies
`
`comprising Biogen’s Code of Business Conduct” (the “Code of Conduct”).
`A.
`44.
`45.
`
`Additional Duties Under The Code Of Business Conduct
`
`The Code of Conduct is applicable to “all employees, officers and directors.”5
`
`In introducing the Code of Conduct, Defendant Vounatsos states:
`
`At Biogen, we hold ourselves to the highest standard of business and professional
`conduct. As a result, all of our stakeholders, including our shareholders, continue
`to trust our products and services.
`
`***
`This Code of Business Conduct describes how we put our cultural Elements into
`action with a focus on ethics.
`
`***
`The following . . . Ethical Principles that comprise key sections of our code, are
`equally critical to the success of our company:
`
`
` ***
`x We are responsible to our communities
`x We are fair and honest
`x We are transparent and ethical
`x We never compromise our integrity
`
`
`***
`Any success that we achieve, if not achieved ethically, is no success at all.
`
`
`***
`As an employee of Biogen, you have been afforded the opportunity to be part of a
`company that has improved countless lives. With that privilege comes the
`responsibility to meet the highest level of ethical and legal standards. The
`company expects this of you, as do the patients and customers we serve.
`***
`We are committed to always act with integrity and honesty and to remain true to
`our heritage and the promise of our future. We are all responsible for Biogen.
`
`
`Biogen, Code of Business Conduct, https://www.biogen.com/en_us/code-of-business-
`5
`conduct.html (last visited Jan. 18, 2022).
`
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 16 of 90
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`The quality of our people and our commitment to ethics and compliance will not
`only enable us to succeed today but will help us to thrive and excel. Working
`together, with the help of this Code, we will not only meet our goals, but we will
`also continue to be proud of how we achieve success.
`
`46.
`
`As part of their responsibilities, the Code of Conduct requires Biogen employees
`
`to:
`
`x Always act in a professional, honest, and ethical manner when acting on behalf
`of the Company;
`x Be familiar with the information contained in this Code as well as Company
`policies;
`x Promptly report concerns about possible violations of laws, regulations, this
`Code and policies to your supervisor or to any of the resources listed in this Code;
`x Remember: no reason, including the desire to meet business goals, is an excuse
`for violating laws, regulations, the Code or policies.
`
`47.
`
`The Code of Conduct discusses proper sales and marketing practices, warning
`
`employees to “Watch Out For”:
`
`x False or misleading information or misrepresentations of our products or those
`of the competition
`x Overstatement of the efficacy of our products
`x Statements that downplay or minimize the risks
`
`48.
`
`The Code of Conduct describes the proper interaction with health care
`
`professionals:
`
`Healthcare professionals must determine the best course of care for their patients,
`and Biogen is committed to providing timely information to assist them in
`treatment decisions. This
`includes fair, accurate, and balanced product
`information, scientific and medical information, and safety information.
`
`
`***
`
`When Biogen interacts with healthcare professionals, it does so with honesty,
`fairness and integrity. Our Written Standards, including this Code and Company
`policies, reflect the requirements of industry association codes and applicable
`laws that prohibit misuse of influence, improper incentives, kickbacks, bribes, or
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 17 of 90
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`anything of value in exchange for recommendation, use, prescription, or referral
`of products or services.
`
`
`***
`
`MAKE SURE YOU[:]
`
` x
`
` Examine all relationships and arrangements with referral sources, physicians,
`vendors and suppliers to be certain there are no kickbacks for the referral of
`patients or for prescriptions written.
`
`49.
`
`The Code of Conduct stresses the need to be “transparent and communicate
`
`truthful information in a manner that is not misleading,” stating further:
`
`We operate fairly and honestly with all of our stakeholders and business partners
`and expect that they will do the same. Our books, records and financial statements
`must be honest, accurate, objective, complete and timely in order to ensure we
`make sound business decisions.
`
`50.
`
`The Code of Conduct details the requirement to produce timely, accurate, and
`
`complete records:
`
`Our Company is subject to extensive and complex reporting requirements. Our
`operations must comply with all applicable regulatory, accounting, financial, tax
`and other rules and regulations of the jurisdictions in which we operate.
`
`
`***
`
`The Company’s filings with the Securities and Exchange Commission, as well as
`other public disclosures by or on behalf of our Company, must be fair, complete,
`accurate, timely, and understandable.
`
`51.
`
`Regarding the requirement to act in a transparent and ethical manner, the Code of
`
`Conduct admonishes employees not to pay kickbacks or bribes:
`
`We do not offer or provide improper incentives, kickbacks, or bribes to win
`business, to influence a business or prescribing decision, or to advance our
`interests with government authorities. In particular, our interactions with
`healthcare professionals, government entities, government employees, and others
`
`
`
`
`
`
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 18 of 90
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`must be legitimate and never to obtain an improper advantage or to improperly
`influence or encourage a decision by them.
`
`Cooperating with regulators
`
`We will always comply with relevant laws and regulations and cooperate with
`government agencies, law enforcement officials and investigators.
`
`***
`
`Avoiding bribery and corruption
`
`We do business with honesty and integrity and comply with all applicable ethical
`and legal standards.
`
`
`***
`
`We are responsible for third parties acting on our behalf. We perform due
`diligence and carefully monitor our business partners and require them to operate
`in compliance with our Code and our standards.
`
`B.
`52.
`
`Additional Duties Under Biogen’s Compliance Program
`
`Biogen has a Comprehensive Compliance Program (“Compliance Program”)
`
`which places additional duties on all its employees, directors and officers.6
`53.
`
`The Compliance Program is intended to ensure that Biogen conducts business
`
`with “integrity and ethically.”
`54.
`
`The Compliance Program was developed in accordance with the laws applicable
`
`to the biotechnology industry and the “Program Guidance for Pharmaceutical Manufacturers”
`
`published by the United States Department of Health and Human Services (“HHS”), Office of
`
`the Inspector General (“OIG”).
`
`
`Biogen, Comprehensive Compliance Program, https://investors.biogen.com/static-
`6
`files/fa732951-4617-4cad-b1c1-78f8e07c392d (last visited Jan. 18, 2022).
`18
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`Case 1:22-cv-10209-AK Document 1 Filed 02/09/22 Page 19 of 90
`
`55.
`
`Consistent with the OIG Guidance, Biogen’s Compliance Program includes, inter
`
`alia:
`
`x Written standards of conduct, policies, and practices that verbalize the
`company’s commitment to compliance and set forth the ethical and compliance
`principles applicable to all employees.
`x Written compliance materials that address specific areas of potential fraud and
`abuse, including risk areas relating to the prohibition of kickbacks and illegal
`remuneration to persons or entities in a position to generate federal health care
`business for the company, either directly or indirectly.
`
`56.
`
`Biogen also has policies that “prohibit illegal remuneration in violation of federal
`
`and state anti-kickback statutes” including requiring appropriate:
`
`x Making of grants and charitable contributions so that such funds are not
`conditioned, express or implied, on any agreement to prescribe, purchase,
`recommend, influence or provide favorable formulary status for any Biogen
`product.
`x Promotion of Biogen products in compliance with the U.S. Food and Drug
`Administration’s regulatory framework regarding promotion of pharmaceutical
`products.
`
`C.
`57.
`
`Additional Duties Under The Corporate Governance Committee Charter
`
`The Corporate Governance Committee Charter places additional duties on the
`
`members of the Corporate Governance Committee,7 including requirements that its members:
`
`x Develop and recommend to the Board for approval a set of corporate
`governance principles. The Committee shall review the principles on a regular
`basis and recommend changes as necessary, and shall also monitor compliance
`with the principles.
`x Review the Company’s significant corporate governance and board succession
`risks and steps taken to monitor and mitigate such risks.
`x Review the Company’s Code of Business Conduct on a peri