June 28, 2017
By Mark Terry, BioSpace.com Breaking News Staff
The U.S. Securities and Exchange Commission (SEC) has filed insider trading charges against two former executives and the husband of a former staffer of Ariad Pharmaceuticals.
Based in Cambridge, Mass., Ariad was acquired by Takeda Pharmaceutical Company Limited in January 2017 for about $5.2 billion. The company has two targeted therapies. The biggest is Iclusig, which has been approved for chronic myeloid leukemia (CML) and a subset of acute lymphoblastic leukemia (ALL). The other is brigatinib, still in trials, for a genetically-defined subpopulation of non-small cell lung cancer (NSCLC).
The defendants include two senior employees and the husband of a former employee. They used non-public information to trade Ariad shares prior to U.S. Food and Drug Administration (FDA) decisions concerning Iclusig.
The SEC filed charges against Harold Altvater, whose wife worked for Ariad, Maureen Curran, previously Ariad’s senior director of pharmacovigilance and risk management, and Susan Dubuc, formerly associate director of pharmacovigilance and risk management.
The SEC indicates that Curran sold off Ariad shares in 2012 after the FDA required the company to place a safety warning on Iclusig packaging. Allegedly, Curran avoided $9,420 in losses by unloading the stock prior to the FDA announcement. Curran has agreed to settle the charges by paying fines of about $20,000 without admitting or denying wrongdoing.
Dubuc is accused of informing her relatives in 2013 that the company had plans to stop trials of Iclusig. They then sold off shares, avoiding about $2,888 in losses. Dubuc has also settled the charges with fines of $5,000 and no admitting or denying wrongdoing.
Altvater’s case is still ongoing. Altvater is married to a former Ariad staffer, and currently runs a medical marijuana business in Malden and Methuen, Mass. Reportedly he hid his activities from his wife. The SEC charges that he made more than $100,000 in profits and also avoided losses by dumping shares prior to the FDA news breaking. His wife also reportedly told him at least once not to trade Ariad stock.
A spokeswoman for Takeda indicated that Curran and Dubuc no longer worked for Ariad when Takeda bought the company.
When Ariad announced the FDA decision on December 14, 2012, shares dropped from $23.88 to $18.93, a loss of about 21 percent on that day.
In terms of the October 2013 allegations of Dubuc, shares dropped 69 percent to $5.24 after the announcement. Dubuc, per Genetic Engineering & Biotechnology News, “had received a ‘blackout notice’ from Ariad’s CFO that prohibited all employees and their family members from trading in Ariad’s stock, the SEC contended.”
Atvater acquired the information from his wife about varying changes in the company’s stock, including the pending announcement of the approval of Iclusig. There were three incidences of insider trading between October 2013 and January 2014. In other words, he bought shares before the positive announcement and sold shares before negative announcements. Per Genetic Engineering & Biotechnology News, “He also advised a friend to trade Ariad stock based on nonpublic information learned from Altvater’s wife, enabling the friend to obtain profits of $4,188, the SEC added.”
