Biogen Idec Reveals SEC Probe

A regulator filing reveals a formal inquiry into the withdrawal of Tysabri in February.
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Biogen Idec

(BIIB) - Get Report

announced a formal investigation by the

Securities and Exchange Commission

into whether the company violated securities laws during its withdrawal of multiple sclerosis drug Tysabri in February.

In its SEC filing for the first quarter released Friday, the company said it received a formal order of investigation from the Boston District Office of the SEC last week.

"We may not be successful in defending ourselves or asserting our rights in the litigation or investigation to which we are currently subject, or in new lawsuits, investigations or claims brought against us, and, as a result, our business could be materially harmed," the company wrote.

The Cambridge, Mass.-based company says it cannot predict the outcome of the investigation or when it will be resolved, but it says it expects higher expenses in 2005 because of its part in the investigation.

In the company's annual report filed March 31, it announced an informal inquiry by the SEC into the suspension of Tysabri and into securities trading by some of its directors, officers and employees following the suspension.

Elan

(ELN)

, co-developer of the drug, also announced an inquiry by the SEC into its actions following the drug's withdrawal.

The companies voluntarily withdrew Tysabri after two of its users developed a rare fatal central nervous system disease called progressive multifocal leukoencephalopathy.

On Wednesday, Biogen Idec's earnings took a hit when the company recorded $36 million in charges, or 7 cents a share, related to the suspension of marketing and distribution of Tysabri.

Biogen Idec shares were recently up 39 cents, or 1%, to $36.37.