Pharmaceuticals

'Fast Money' faux pas: Firm draws FDA warning, DOJ subpoena

Screen shot of Marc Beer on CNBC
Source: CNBC

Hot biotech company Aegerion Pharmaceuticals found out the hard way that enthusiastic comments by its CEO about its breakthrough cholesterol drug Juxtapid could lead to unwanted attention from federal drug regulators.

The Food and Drug Administration accused CEO Marc Beer of "misbranding" Juxtapid by claiming it "is intended for new uses, for which it lacks approval and for which its labeling does not provide adequate directions for use," according to an FDA warning letter sent to the Cambridge, Mass.-based company.

The FDA claimed Aegerion made "serious" violations after Beer went too far in his comments in two separate appearances on CNBC's "Fast Money" and left the impression that Juxtapid could be used alone as a treatment for a rare genetic disease and that it could tackle heart conditions, and also that he failed to disclose the potentially serious side effects from the drug.

The company disclosed last Thursday that it had received a Justice Department subpoena for documents relating to Juxtapid's sale and marketing, a revelation that sent the company's stock dropping sharply. It is not clear if that subpoena was spurred by the FDA warning over Beer's "Fast Money" remarks, or not—but the company suggested it was not.

FDA spokeswoman Tara Goodin told CNBC.com in a prepared statement on Monday: "Regardless of the media or venue used to disseminate promotional messages about prescription drugs, pharmaceutical companies undermine the drug approval process and may put the public at risk when they promote drugs for uses that have not been proven safe and effective."

Aegerion in a prepared statement said, "We've taken compliance very seriously since launch. It has always been Aegerion's policy to promote its products only in a manner consistent with the FDA-approved product labeling."

"We plan to cooperate fully with this investigation," the company said. "After meeting with FDA officials regarding the warning letter, we believe we have a path forward to resolve outstanding FDA concerns as articulated in the warning letter. We don't plan to discuss the details of the ongoing government investigation."

However, in an email before that statement was sent, Aegerion spokeswoman Amanda Murphy told a CNBC.com reporter, "I want to be sure you are clear though that we're not certain that the subpoena is related to Marc's statements on 'Fast Money,' and in fact, we believe it likely isn't."

(Read more: Obamacare exchange visitors looking healthy)

Aegerion CEO: Investing heavily in commercial operations
VIDEO3:2003:20
Aegerion CEO: Investing heavily in commercial operations

The FDA's Nov. 8 letter was sent after Beer appeared twice on the CNBC show—on June 5, 2013, and again on Oct. 31— to talk about Juxtapid, which received FDA approval in December 2012. A year's worth of the drug can cost close to $300,000.

Juxtapid targets so-called bad cholesterol, also known as LDL-C, specifically in people with a rare genetic disease called HoFH, an acronym for homozygous familial hypercholesterolemia.

According to its product label, Juxtapid is meant to be used as an adjunct in a low-fat diet and other lipid-lowering treatments. Its "safety and effectiveness" in patients who do not have HoFH "have not been established," and its effect on cardiovascular disease "has not been determined," according to the "limitations of use" labeling on the product.

The FDA, in its warning letter, noted that Juxtapid "is associated with a number of serious risks," including toxicity to the liver, and it's not supposed to be used in pregnant women.

Beer, in his appearance on June 5's "Fast Money," noted that HoFH is a "devastating disease," and that people born with it are not often diagnosed until "they have a heart attack" at a young age.

"If you can imagine a child having a heart attack at 8, 10, 12 years of age," Beer said. "And then they have another event, usually about every 18 months, and die by the age of 30. And we've found out that we can lower it significantly with this drug."

He also said: "It's a devastating disease that causes early death. And the drug is a corrective against that disease, and that's the most important thing."

Beer added, "this product has the potential of taking a patient that would die at 30 and allow them to meet their grandkids."

During his second "Fast Money" appearance last Halloween, while wearing a Boston Red Sox jacket, Beer compared Aegerion's "team" to the Sox, who had just won the World Series the night before with Beer in attendance.

"We've got a passionate group," Beer said. "Everybody's on a mission to get these patients treated, because these patients are going to die of a heart attack or stroke if we don't have them on therapy."

In its Nov. 8 letter, which cited Beer's statements, the FDA wrote, "These statements misleadingly suggest that Juxtapid is safe and effective for use in decreasing the occurrence of cardiovascular events including heart attacks and strokes, and increasing the lifespan of patients with HoFH, and thus will have an effect on cardiovascular morbidity and mortality as well as overall mortality."

The FDA noted that Juxtapid "is approved only as an adjunct to a low-fat diet and other" cholesterol-lowering treatments, and that its labeling makes clear that its effect on cardiovascular disease "has not been determined."

(Read more: Health spending growing slowly)

"Additionally, while the statements cited above includes substantial and repeated efficacy claims for Juxtapid, the presentation fails to communicate any of the risks associated with these new intended uses or its approved use," said the letter, which underlined and bolded the word "any."

Source: Drugs.com

"The repeated statements regarding Juxtapid, including the claims that patients taking the drug will 'meet their grandchildren' misleadingly suggests that Juxtapid lacks significant risks," the FDA said.

The letter requested that "Aegerion immediately cease misbranding Juxtapid and introducing it into interstate commerce for unapproved uses for which it lacks adequate directions."

The FDA asked for a written response to its letter by Nov. 22, and, "because the violations described above are serious," also asked that the response "include a comprehensive plan of action to disseminate truthful, non-misleading and complete corrective messages about the issues discussed in this letter to correct any misimpressions about the approved use of Juxtapid."

Last Thursday, in a press release on Aegerion's website announcing preliminary 2013 sales data, the company disclosed that the Boston U.S. attorney's office had issued a subpoena to it asking for "documents regarding the company's marketing and sale of Juxtapid."

"The company intends to cooperate fully with the government investigation," the release said. "Aegerion is fully committed to complying with all applicable laws, rules and regulations, and has compliance policies in place consistent with this commitment."

A spokeswoman for the Boston U.S. attorney's office declined to comment, saying only, "We don't confirm or deny investigations."

Aegerion's stock fell more than 12 percent in extended trading after it released news of the subpoena. The stock had traded close to $74 per share before the disclosure, but was trading close to $65 as of Monday.

(Read more: Flu could hit business hard this season)

The company also could face a shareholder lawsuit. On Friday, the law firm Glancy Binkow & Goldberg, which has offices in New York and Los Angeles, announced that it was "investigating potential claims on behalf of shareholders of Aegerion Pharmaceuticals ... concerning possible violations of federal securities laws." Glancy Binkow asked for people who had bought Aegerion stock between April 30 and last Friday to contact the firm.

The firm said its investigation was focused on Aegerion's statements regarding its operations, financial performance and prospects. The firm specifically noted both the FDA warning letter and the Justice Department subpoena.

CNBC.com left messages for two Glancy Binkow lawyers named in its announcement, but had not received a response.

In its statement to CNBC.com, Aegerion also said, "It has always been Aegerion's policy to promote its products only in a manner consistent with the FDA-approved product labeling."

"Our field force is trained to reinforce with prescribers the labeled indication of HoFH. In addition, prescribers must be certified under the Juxtapid Risk Evaluation and Mitigation Strategy (REMS), receive training on Juxtapid's risks and their mitigation, and attest that the patient has a clinical or laboratory diagnosis consistent with HoFH before a Juxatpid prescription can be filled," the company said.

—By CNBC's Dan Mangan. Follow him on Twitter @_DanMangan.