On September 22, 2017, the Securities and Exchange Commission filed fraud charges against a Massachusetts biopharmaceutical company. The company was accused of exaggerating the number of new patients that had filled prescriptions for the company’s expensive drug, which just happened to be its only source of revenue. Aegerion Pharmaceuticals has agreed to pay $4.1 million to settle claims that is misled investors numerous times in 2013.
The company is now a subsidiary of Novelion Therapeutics. The SEC’s complaint suggests that Aegerion told investors that most prescriptions for Juxtapid were filled by consumers. In reality, the SEC claims that company records indicate that roughly half of the prescriptions resulted in drug purchases.
The complaint explains that Juxtapid is designed to combat a rare genetic condition, which causes excessively high cholesterol. In 2013 and 2014, the drug was priced at roughly $250,000 to $300,000 each year per patient. When Juxtapid was introduced in 2013, investors and analysts had very little data to estimate the drug’s future revenues.
During several earnings calls, Aegerion supposedly provided details about prescriptions related to the drug. This information was deemed insufficient, since not all prescriptions ultimately converted into sales. The SEC complaint claims that the real conversion rate within the range of 50 to 60 percent wasn’t actually disclosed until October of 2014.
The complaint also suggests that Aegerion never notified investors that the conversion rate was around 50 percent in 2013. The company has agreed to settle the allegations without admitting or denying guilt. Again, Aegerion Pharmaceuticals will pay $4.1 million to settle the charges.