As a follow-up to my Friday, March 4 post regarding Biogen’s MS drug Tysabri, in an “unrelated” event, Biogen announced the resignation of the executive, Thomas J. Bucknum, effective immediately, and gave no reason for the resignation.
Bucknum’s sudden departure, comes amid a regulatory inquiry into his sale of Biogen stock the same day the company says it learned of patient illnesses that led to Tysabri’s withdrawal from the market. Besides Mr. Bucknum, at least three other Biogen executives or directors sold shares before Feb. 18.
Bucknum exercised stock options and sold 89,700 shares on Feb. 18 at $67.12 a share, earning a profit of nearly $2 million, according to a filing with the Securities and Exchange Commission. Not bad for a days’ work, if you can get it. That same day, Biogen said that it learned two patients in a clinical trial of Tysabri were suspected of having a rare but deadly brain infection. Ten days later, Biogen and its partner, the Elan Corporation, suspended the sale of Tysabri, setting off a 43 percent drop in Biogen’s share price and a 70 percent decline in Elan’s.
The Securities and Exchange Commission is investigating Bucknum’s sale of 89,700 Biogen shares on Feb. 18, the day the company says it learned of the illnesses and reported them to the U.S. Food and Drug Administration. According to documents the company filed with the SEC, the 58-year-old Bucknum netted about $1.9 million from the sale.
Bucknum’s lawyer said his client offered his resignation “in order that he not become a distraction to the business of Biogen.” Bucknum started at Biogen in 1996 as chief corporate counsel, and was appointed general counsel in 1999.
Also, a string of recent shareholder lawsuits charge Biogen violated securities laws by allegedly failing to disclose that Tysabri could affect the immune system and raise vulnerability to progressive multifocal leukoencephalopathy, a central nervous system disorder.
Jose Juves, a spokesman for Biogen, said that management did not learn of the possible infection until Feb. 18, and immediately alerted the Food and Drug Administration. The diagnosis was not confirmed until last week.
How soon Biogen, knew of a problem is likely to be a focus of lawsuits already filed by shareholders and also of a possible S.E.C. investigation. Biogen and Elan said last week that they were providing information to the S.E.C. in response to what an Elan spokeswoman characterized as a routine inquiry.
Spokesmen for Biogen, which is based in Cambridge, Mass., said that until yesterday, all sales of its stock had been in accord with corporate policy and that the sellers had not known about the brain infections. Asked yesterday if the company stood by the statement, Mr. Juves, the spokesman, did not mention Mr. Bucknum but repeated the statement for the other three.
Tysabri, approved in November based on one year’s worth of data from two yearlong clinical trials, had been expected to be a big advance in treating multiple sclerosis. It is not clear if the drug will ever return to the market. The two patients who contracted the brain disease were participants in a trial of Tysabri in combination with Avonex, another Biogen drug for multiple sclerosis.
Does all this strike you as a little Martha Stewart-ish? She had similar issues in selling her shares in the biotech company ImClone Systems Inc. Maybe if all else fails for Bucknum, he could eventually team up with Martha on her new show. He now has $2 million to put up for a partnership with her. Also, he might want to find out from Martha how to get one of those cool ponchos she was seen wearing upon her release from prison. I guess he now could also afford to just have someone knit one for himeself.
