In its May 2020 annual report filed with the United States Securities and Exchange Commission (SEC), Alexion Pharmaceuticals, Inc., said it reached an agreement in principle with the SEC to resolve the Foreign Corrupt Practices Act (FCPA) investigation against it.
The Probe
Around May 2015, the SEC began to investigate Alexion’s grant-making activities and FCPA-compliance in multiple countries, including Brazil, Columbia, Japan, Russia, and Turkey.
Later in 2015, the United States Department of Justice (DOJ) also opened an investigation into Alexion’s compliance with the FCPA. Recently, the DOJ had told Alexion it closed its inquiry into the matter.
The SEC and DOJ also sought information related to recalls of specific lots of its rare blood and kidney disease medication SOLIRIS and related securities disclosures. Not much more on either investigation was released by Alexion, the SEC, or the DOJ. That is, until recently, when the news broke about the May annual report that indicated an agreement in principle had been reached.
The Agreement
Alexion has set aside $25 million for the “agreement in principle” to resolve the allegations levied against the company. It is important to note that Alexion also indicates that “there can be no assurance that a definitive agreement reflecting the terms of the agreement in principle will be agreed to or finalized.” The annual report also notes that if a definitive agreement cannot be reached, or if the terms of any definitive agreement are different than the agreement in principle, it is possible that a loss related to these matters may be incurred and it may be larger than the amount currently set aside.
The filing also discusses what will happen if a definitive agreement is not reached and the SEC continues its investigation. In that case, the SEC may pursue litigation to determine whether Alexion’s operations or activities were not in compliance with existing laws or regulations. That litigation may result in additional fines, civil penalties, or equitable remedies, including disgorgement, injunctive relief, and/or other sanctions.”
The annual report indicates that Alexion will continue to cooperate with the probes and that the company is “committed to strengthening its compliance program and is currently enhancing and continuing to implement a comprehensive company-wide transformation plan” to improve its “business processes, structures, controls, training, talent, and systems” across its global operations.