By Colin Kellaher
A former top executive of biotechnology company Immunomedics Inc. and another former employee with whom he was romantically involved have been arrested on insider-trading charges related to the company's key breast-cancer drug.
The U.S. Attorney's Office for the District of New Jersey and the Securities and Exchange Commission said they brought charges against Usama Malik, who served as chief financial officer of Immunomedics from 2018 through 2020, and Lauren Wood, the company's former head of corporate communications.
According to the complaints, Mr. Malik last year learned that the U.S. Food and Drug Administration had permitted the company to halt a clinical trial for the breast-cancer drug, later approved and marketed as Trodelvy, because the existing trial data provided compelling evidence that the drug was effective.
Mr. Malik allegedly shared the information with Ms. Wood, with whom he was living, and other family members, who then bought shares of Immunomedics ahead of the company's announcement of the FDA decision. Shares of Immunomedics nearly doubled on April 6, 2020, after the company issued a press release.
The Justice Department alleged that Ms. Wood realized a gross profit of more than $200,000 on her trades and gave $65,000 to Mr. Malik.
Trodelvy subsequently won FDA approval and was the prized drug in last year's $21 billion acquisition of Immunomedics by Gilead Sciences Inc.
The DOJ said it arrested Mr. Malik, 47 years old, and Ms. Wood, 33, both of Washington, D.C., and charged them with securities fraud, while the SEC said it filed civil charges alleging violations of securities laws. The securities fraud count carries a potential penalty of 20 years in prison and a $5 million fine, the DOJ added.
Mr. Malik, who joined Immunomedics as chief business officer in 2017 after serving as global vice president of strategy and innovation at Pfizer Inc. for four years, earlier this year was named chief executive of privately held precision-oncology company Fore Biotherapeutics.
Write to Colin Kellaher at email@example.com
(END) Dow Jones Newswires