The latest biopharma insider trading scandal stems from Pfizer’s acquisition of Medivation in 2016.
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Insider trading inspired by confidential information is illegal, yet some people still try to get away with it. The latest biopharma insider trading scandal stems from Pfizer’s acquisition of Medivation in 2016.
The Securities and Exchange Commission (SEC) is charging Matthew Panuwat, a former business development executive at Medivation, with insider trading, according to a complaint filed in court.
The complaint states that Panuwat received an email from Medivation’s CEO on August 18, 2016, containing confidential, nonpublic information about Pfizer’s looming acquisition of the company.
Within minutes of receiving the news, Panuwat allegedly purchased short-term, out-of-the-money stock options in Incyte from his work computer and failed to inform anyone at Medivation about his trades. Incyte’s value was expected to increase once the Pfizer/Medivation acquisition news was made publicly available.
The news was public knowledge less than a week later on August 22. During the trading day, Medivation shares rose approximately 20%, while Incyte’s rose approximately 8%. In total, Panuwat obtained $107,066 in illicit funds.
The SEC wants the court to prevent Panuwat from committing future violations of this nature by requiring him to pay a civil monetary penalty and barring him from serving as an officer or director of a public company.
Panuwat currently serves as chief business officer at ORIC Pharmaceuticals. In the complaint, the SEC argues that Panuwat was well aware of the law he was violating due to his extensive experience in investment banking and the biopharmaceutical industry.
Medivation isn’t the only biopharma company that has been in the news for executives accused of insider trading. Last month, news broke that Emergent was facing a shareholder lawsuit accusing the company of insider trading.
Some Emergent executives and board members are being accused of selling off over $20 million worth of stock over a 15-month period. The company also faces accusations of securities fraud. Lincolnshire Police Pension Fund claims Emergent’s board members and executives sold the company’s stock “while in possession of material, nonpublic information that artificially inflated the price” and “profited from their misconduct and were unjustly enriched through their exploitation of material and adverse inside information.”
Emergent has denied the claims, saying they were “without merit.”
In May, Emergent announced a manufacturing flaw that led to 15 million contaminated doses of Johnson & Johnson’s COVID-19 vaccine. In March, the company’s Baltimore manufacturing site accidentally switched an ingredient used in the vaccine.
