Serono Settles Serostim U.S. Government Investigation (SRA)

Serono (ticker: SRA) announced today that it has agreed on a $704 million settlement with the U.S. Attorney's office with relation to a four-year investigation into commmercial practices related to Serostim. Back in April, the company took a $725 million provision to cover the settlement and related costs.

The weakness today in Serono, however, is due the announcement by Elan (ticker: ELN) and Biogen Idec (ticker: BIIB) that they have completed the Tysabri safety evaluation with no new reported cases of PML. In my opinion, this is a none event. Tysabri still faces an uphill battle getting back on the market. PML is a fatal disease with symptoms that resemble relapsing MS and with no definitive diagnostic test. I find it difficult to believe the FDA will allow a product for a non-fatal disease on the market with the risk profile of Tysabri. Even if it does manage to get back on the market, it will have limited utilization.

SRA chart.

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