Biogen Idec insiders reaped millions in cash bonuses and stock sales shortly before the company informed regulators of safety concerns regarding its new blockbuster multiple sclerosis drug, regulatory filings show.
On Feb. 17, the day before Biogen provided the U.S. Food and Drug Administration information on a patient death and another serious injury from its Tysabri drug, the company's board of directors approved $4.6 million in 2004 executive cash bonuses, according to a filing with the U.S. Securities and Exchange Commission.
On Feb. 18, the same day as the company's FDA notification, Biogen General Counsel Thomas Bucknum sold 89,700 shares for a profit of $1.94 million, according to an SEC filing.
Biogen and Elan Corp. Plc announced Monday they were suspending Tysabri sales, sending shares of both companies plummeting.
The companies based their decision on one confirmed, fatal case and one suspected case of progressive multifocal leukoencephalopathy (PML), a rare infection of the brain and spinal cord.
Biogen stock closed down 42.6 percent at $38.65 on the Nasdaq market while ADRs of Elan, based in Dublin, Ireland, fell 70.3 percent to $8 on the New York Stock Exchange.
"When the trade was made, Mr. Bucknum had no knowledge of any safety concerns with Tysabri," company spokesman Jose Juves said. "The procedure would have been to cancel it had he been aware."
Juves declined to answer further questions. He said all information was contained in the filings.
On Feb. 15, three days before the company's notification to the FDA, Biogen Executive Chairman William Rastetter sold 120,313 shares for a profit of $7.45 million, in accordance with a previously filed trading plan, SEC filings show.
SEC filings also show that on Feb. 14, Biogen director Robert Pangia sold 15,570 shares for a $954,844 profit, also in accordance with a previously filed trading plan.
Biogen's spokesman denied that either Rastetter or Pangia had knowledge of Tysabri safety concerns prior to the trades.
According to SEC filings, no Elan insiders sold shares in the days leading up to the Feb. 18 notification.
Jim Mullen, chief executive of Biogen Idec, told investors and reporters on a conference call that it would not take the companies "a long time" to reevaluate the clinical trials. But he said "it may take some time to figure out a path forward" for the drug.
Elan said on a conference call that it does not believe the U.S. Food and Drug Administration intends to have the drug removed from the market and that if no more cases of PML are found Elan would hope to have Tysabri back on sale by the third quarter of 2005.
"I think it's very plausible that in the absence of anything new that we may find that this product would easily be back on the market by the fall," said Kelly Martin, Elan's chief executive.
