Nearly seven years have passed since Alexion’s then-CEO and CFO stepped down amid an investigation into improper sales practices. Now, the rare disease specialist can put the episode completely in the rearview mirror thanks to a settlement with investors.
Alexion, now part of AstraZeneca, has reached a $125 million deal with investors to resolve their class action lawsuit, the plaintiffs said in a court filing.
Plaintiffs launched their case in late 2016, a few weeks after Alexion disclosed an investigation into a whistleblower allegation about sales practices for the company’s flagship product, Soliris. The company’s then-CEO David Hallal and CFO Vika Sinha left the company shortly before the litigation kicked off.
Alexion’s stock price tumbled after the disclosure. Angry investors claimed that the company made false statements about its sales tactics, and that its share price was artificially inflated as a result.
At the beginning of 2017, Alexion acknowledged that senior management pressured employees to convince customers to place their Soliris orders earlier than they would have otherwise.
The practice, known as “pull-in sales,” was intended to boost quarterly performance. Still, it wasn’t “inherently problematic or impermissible” as long as it didn’t violate U.S. accounting rules, the company said.
In the years after that episode, the company was dogged by government probes into its sales tactics. In 2019, Alexion, Jazz Pharma and Lundbeck together agreed to pay $122.6 million to resolve allegations that they illegally covered the copays for their products under Medicare.
And in 2020, Alexion paid $21.5 million to settle foreign corruption charges brought by the U.S. Securities and Exchange Commission. The company was said to have improperly paid Turkish and Russian government officials to win favorable treatment for Soliris. Alexion didn’t admit or deny the agency’s findings in that deal.
Soliris reaped nearly $4.1 billion in sales in 2020, before Alexion was acquired by AstraZeneca in a $39 billion deal in 2021.
These days, Alexion’s focus has shifted to the company’s newer C5 inhibitor Ultomiris. As AZ works to convert patients to the follow-on drug, Soliris’ sales dropped by 18% in the first half of the year to $1.6 billion. Ultomiris’ sales jumped 60% to $1.4 billion during the same period.
Meanwhile, biosimilars to Soliris aren’t too far away. Through a deal signed in 2020, Alexion will face Amgen’s Soliris biosimilar in the U.S. by 2025.