Delaware high court overturns ruling in D&O coverage case
- July 24, 2025
- Posted by: Web workers
- Category: Finance
The Delaware Supreme Court ruled Tuesday that an AstraZeneca PLC unit’s $125 million settlement of a securities class action fell under a directors and officers liability tower effective from 2014 to 2015 because the allegations were “meaningfully linked” to a 2015 U.S. Securities and Exchange Commission investigation.
The high court overturned the trial judge’s ruling in In re Alexion Pharmaceuticals Inc. Insurance Appeal that the settlement was covered by a $105 million tower of D&O coverage effective from June 2015 to June 2017. The trial judge had held that the allegations in the December 2016 securities class action were not sufficiently related to the SEC’s investigation.
Both the SEC investigation and securities class action involved Alexion’s sales tactics for the drug Soliris and alleged noncompliance with the Foreign Corrupt Practices Act through its grantmaking activities with countries including Brazil, Japan, Russia and Turkey, the court said.
Boston-based Alexion sells Soliris, a so-called “orphan drug” used to treat the autoimmune disease neuromyelitis optica spectrum disorder, at a retail price of $500,000 to $700,000 per patient. In March 2015, the SEC began investigating Alexion’s sales practices and served a subpoena seeking documents on its worldwide lobbying efforts. Alexion notified the D&O insurers in the $85 million 2014-2015 tower about the subpoena and the potential for future claims, court records show.
Alexion stockholders then filed a securities class action in federal court in Connecticut. Alexion notified its D&O insurers in the 2015-2017 tower of the lawsuit.
Alexion reached a $21.5 million settlement with the SEC in July 2020 and resolved the securities class action in September 2023 for $125 million. Alexion sued the D&O insurers in the 2015-2017 tower, which included units of Hartford Financial Services Group Inc., Sompo International Holdings Ltd., and Swiss Reinsurance Company Ltd., seeking coverage for the settlement.
Representatives for the parties did not respond to requests for comment.
