Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—S.D.N.Y.: Court tosses Biogen investor claims tied to Leqembi rollout, (Mar 31, 2026)

By Rodney F. Tonkovic, J.D.

Even the articles cited by the plaintiffs noted the scientific uncertainty as to the exact cause of patient deaths.

The district court sitting in Manhattan dismissed a fraud complaint brought against Biogen, Inc. alleging that the company misled about the development of a drug and its commercialization. The complaint alleged that Biogen overstated the drug's commercial prospects while not properly disclosing safety risks. The court held that challenged statements regarding patient uptake targets and safety disclosures amounted to non actionable opinion, protected forward looking statements, or corporate optimism, and that disagreements over scientific judgment without contemporaneous contradictory facts could not sustain a fraud claim. The complaint was dismissed with prejudice (Stokes v. Biogen, Inc., No. 1:24-cv-12691 (S.D. N.Y. March 26, 2026)).

Leqembi. At issue in this case was an Alzheimer's treatment, Leqembi, that was being developed by Biogen in partnership with a Japanese company, Eisai. The drug was approved by the FDA and for coverage by Medicare in July 2023, but with a "black box" warning of an uncommon, but serious side effect known as "ARIA," which could cause edema or hemorrhage in the brain and lead to seizures, strokes, or death. Biogen and Eisai stated that they expected 10,000 patients to be using Leqembi by the end of FY2023, although there were approximately 4,000 by the end of 2024.

Leqembi under fire. In July 2024, the European union recommended denying a request for Leqembi's market authorization, stating that its therapeutic effect did not outweigh the risks of adverse events. In October, the New York Times reported that Eisai did not inform trial participants about the risk of ARIA and noted an additional Leqembi-related ARIA death. In November, the FDA revised its approval label for Leqembi, based on the increased risks of ARIA for certain individuals.

The complaint alleged that Biogen made numerous misleading statements about Leqembi's commercial prospects and safety. The plaintiffs alleged further that Biogen made false statements about the role of pharmacy benefit manager rebate practices in supporting sales of Biogen's multiple sclerosis drugs (not Leqembi).

10K patients. The court first found that the bulk of the challenged statements about the 10,000-patient goal were either non actionable opinion, protected forward looking statements, or corporate optimism. While there was no dispute that there were never 10,000 patients using the drug, this goal was a protected statement of objectives, accompanied by a discussion of risk factors, and there was no showing that any defendant knew at the time that the target would not be reached. Biogen's confidence in the state of the Leqembi rollout was generally a similar expression of corporate optimism or were objectively true when made.

Safety. The complaint also alleged that Eisai failed to properly disclose a patient death and the severity of the risk of ARIA. According to the court, Eisai was not obligated to disclose this patient's death where the cause differed from the others and where the risk of ARIA and microhemorrhages associated with Leqembi use had been adequately communicated. As to the risks of ARIA, the court said that Biogen's belief that the patients' deaths were not attributable to Leqembi was a reasonable scientific disagreement that did not give rise to fraud.

The court went on to conclude that even if an actionable misstatement had been found, scienter was not shown. Regarding the 10,000-patient goal, the court said that the plaintiffs depended on confidential witnesses, but they were not properly positioned to offer reliable information as to the defendants' knowledge or state of mind. As to Leqembi's safety, the court said there was no showing that the defendants possessed information that contradicted their public statements.

The case is No. 1:24-cv-12691.

Judge: Talwani, I.

Attorneys: Joseph Alexander Hood, II (Pomerantz LLP) for Thomas Allen Gray. Erika M. Schutzman (Wilmer Cutler Pickering Hale and Dorr LLP) for Biogen Inc.

Companies: Biogen Inc.

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