Robert Gadimian, a former executive with Puma Biotechnology, was sentenced to more than two years in prison for insider trading.
Robert Gadimian, a former executive with Puma Biotechnology, was sentenced to more than two years in prison for insider trading, Reuters reported Wednesday.
Gadimian was trading company stock ahead of information about a breast cancer treatment the California-based company developed. In 2017 the U.S.Food and Drug Administration (FDA) approved Nerlynx (neratinib), which is used for the extended adjuvant treatment of early-stage, HER2-positive breast cancer. Gadimian pleaded guilty in November to seven counts of securities fraud that earned him more than $1 million.
As an employee of Puma, Gadimian was subject to the company’s insider trading policy and was required to receive preclearance to buy and sell shares of Puma Biotechnology. That policy also prevented employees from trading in Puma securities during company-imposed blackout periods, according to the indictment.
According to the report, Gadimian used company information about the development of Nerlynx to acquire stock ahead of positive announcements the company would make about the drug. During his tenure at Puma, Gadimian was Puma Biotechnology’s senior director of regulatory affairs. According to the indictment against him, Gadimian snapped up $261,500 worth of Puma shares after he learned that neratinib was performing well in a clinical trial in 2013. When positive results were announced for that trial, the price of Puma stock took off and Gadimian earned $95,000, Reuters reported. Gadimian made a similar stock purchase next year and earned another significant payday after the stock spiked. He later sold the stock and earned more than $1 million, according to the report. Each of these trades was not preapproved by the company and were conducted during blackout periods, according to the indictment.
Gadimian told U.S. District Judge William Young that he acknowledged what he did was not only illegal but also “morally wrong,” Reuters reported.
Gadimian was caught following an internal investigation conducted by Puma. Initially, Gadimian provided the company with altered records of his trading history that did not include the Puma trades. However, according to the indictment, in October 2014, Gadimian admitted to company officials that he had conducted the trades without authorization and during the blackout periods because of “greed.”
Puma continues to develop neratanib for additional indications. Earlier this month the company presented interim results of a Phase Ib/II trial studying the combination of neratinib and the antibody-drug conjugate T-DM1 (Kadcyla, ado-trastuzumab emtansine) for treatment of women with metastatic HER-2 positive breast cancer. Interim efficacy results from the trial demonstrated that three patients had a complete response (CR); nine patients had a partial response (PR); two patients had stable disease (SD), and six patients had progressive disease (PD).
