Alzheimer's Expert Leaked Inside Information on Elan Corporation PLC, Wyeth Drug
Published: Nov 26, 2012
In yet another case of insider trading to unnerve the pharmaceutical industry, federal prosecutors have cited a leading Alzheimer’s expert, who chaired the safety monitoring committee for the 2008 trial of the ‘bapi’ drug that was developed by Wyeth and Elan, as a tipster in what is being called the “most lucrative insider trading scheme ever charged.” The feds say that University of Michigan neurology professor Sid Gilman, a prominent expert on various neurological disorders, provided inside information about the Phase II clinical trial of the Alzheimer’s drug to Mathew Martoma, a former trader at CR Intrinsic, which a division of SAC Capital, and who was charged with making about $276 million in combined profits and avoided losses. According to a complaint filed in federal court by the US Securities and Exchange Commission, Gilman, 80, and Martoma were in contact from mid-2006 through mid-2008, when Gilman served not only as a consultant to the drugmakers, but also as a consultant to a so-called expert network that linked money managers with experts in different industries. Court documents indicate Martoma sought insights from Gilman during 42 separate paid consultations. Gilman, who was chosen to present Phase II trial results at the International Conference on Alzheimer’s in July 2008, first fed Martoma about upbeat data and then information that the trial failed to meet its primary endpoint, the complaint alleges.