December 22, 2017 / 4:47 PM / a month ago

Novelion unit asks U.S. judge to approve plea deal, cites money woes

BOSTON (Reuters) - Aegerion Pharmaceuticals Inc has asked a U.S. judge to quickly approve a new plea agreement aimed at resolving probes into its promotion of a cholesterol drug, saying its parent company has been blocked from capital markets due to the case’s uncertainty.

The Novelion Therapeutics Inc unit asked U.S. District Judge William Young in Boston on Thursday to schedule a hearing so it can plead guilty to any new deal aimed at overcoming his objections to an earlier one. Young, who had rejected an earlier agreement, on Friday scheduled a hearing for Jan. 30.

The initial deal in September called for Aegerion to plead guilty to two misdemeanor drug violations involving misbranding under the Food, Drug and Cosmetic Act and pay $40.1 million to resolve U.S. investigations.

Young rejected the deal in November, say it “unduly hobbles” his judicial duties and restricted his ability to impose a sentence, unlike a more usual case with individuals whose sentences are at a judge’s discretion.

Aegerion said the quick schedule was necessary as Novelion has been blocked from getting access to capital markets due to the uncertainty surrounding the criminal case, which has also stalled its efforts to recruit a new chief executive.

Vancouver-based Novelion announced on Nov. 9 that Mary Szela had resigned as CEO.

“An expedited schedule is necessary due to Aegerion’s continued financial deterioration, which could jeopardize its ability to continue in operation and pay any criminal fine if this matter is not resolved in very short order,” Aegerion said.

Novelion said on Friday that the new potential plea deal, unlike the old one, would not bind Young to a particular sentence and would allow him to impose his own.

The initial plea deal was part of Cambridge, Massachusetts-based Aegerion’s agreement to resolve probes by the Justice Department and the U.S. Securities and Exchange Commission centered on its Juxtapid cholesterol drug.

Prosecutors said that after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating high cholesterol in people with a rare genetic disease, Aegerion promoted it for patients who did not have the condition.

Beyond the plea deal, Aegerion will also pay $36 million to resolve criminal and civil claims by the Justice Department, enter into a deferred prosecution agreement to resolve a separate federal charge and pay the SEC $4.1 million.

The case is U.S. v. Aegerion Pharmaceuticals Inc, U.S. District Court, District of Massachusetts, No. 17-cr-10288.

Reporting by Nate Raymond in Boston; Editing by Jeffrey Benkoe

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