Business & Tech

Cambridge-based biotech agrees to pay more than $35m to settle charges

A Cambridge biopharmaceutical company Friday agreed to pay more than $35 million to resolve criminal and civil charges that it marketed an expensive drug as a therapy for ordinary high cholesterol even though it was intended only to treat elevated cholesterol levels stemming from a rare and life-threatening genetic disease.

Employees of Aegerion Pharmaceuticals, a subsidiary of Vancouver-based Novelion Therapeutics Inc., widely promoted Juxtapid to doctors and patients despite the fact that the Food and Drug Administration had approved it only for treatment of extremely high cholesterol resulting from a particular condition — homozygous familial hypercholesterolemia — according to federal prosecutors.

The drug, which was introduced in 2013 and priced at $250,000 to $300,000 a year per patient, is labeled with a warning that it can cause serious liver and stomach problems.

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“Aegerion put profits over patient safety and enriched itself at taxpayer expense,” acting US Attorney William D. Weinreb said.

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In a related matter, Aegerion agreed to pay a $4.1 million penalty to settle allegations by the Securities and Exchange Commission that it misled investors by exaggerating how many patients actually filled prescriptions of Juxtapid, which was the company’s sole source of revenue.

A spokeswoman for Novelion, the parent company, attributed the problems to the previous leaders of Aegerion and said the current management team cooperated fully with federal authorities.

“We are eager to get the problems that occurred with Aegerion under prior leadership behind us, and we believe these agreements are in the best interest of shareholders,’’ said Amanda J. Murphy, the spokeswoman. “We have worked tirelessly to build a culture of integrity and ethics under our new management team and board.”

Most of the more than $39 million in penalties stems from a civil lawsuit filed by three former Aegerion employees who became federal whistleblowers.

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They alleged that employees distributed Juxtapid to patients who hadn’t been diagnosed with the genetic disease and falsified statements that the treatment was necessary for patients who billed federal health care programs. The whistleblowers will receive $4.7 million from the settlement.

The penalties also include a criminal fine and forfeiture of $7.2 million, through a plea agreement, for violating the federal Food, Drug, and Cosmetic Act. The FDA had approved Juxtapid only if the company made sure that doctors and patients knew about the risks of the drug, but the company flouted that requirement, prosecutors said.

“By failing to follow the safety requirements that Aegerion had agreed to, the company put patients’ lives at risk and didn’t honor the safety commitments they made as a condition of gaining approval of their drug,” FDA Commissioner Scott Gottlieb said.

According to the SEC allegations, Aegerion misled investors and stock analysts by saying that the “vast majority” of patients receiving prescriptions for Juxtapid ultimately bought the drug, according to fraud charges filed Friday.

In truth, the SEC said, Aegerion’s records show that only about half of prescriptions resulted in purchases of the drug.

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“By no one’s math is 50 percent a vast majority,” said Paul Levenson, director of the SEC’s Boston regional office. “When companies publicly discuss their financial data, they must be truthful.”

Aegerion agreed to the SEC settlement without admitting to or denying the allegations, contained in a complaint filed in federal court in Boston. The settlement is subject to court approval.

Jonathan Saltzman can be reached at jsaltzman@globe.com.