Former Puma Biotechnology executive Robert Gadimian made millions during his time at the company, but after illegally trading on insider information, he has returned $1.1 million and been ordered to serve a prison term.
U.S. District Judge William Young in Boston sentenced Gadimian to just over two years in prison for trading on nonpublic information as Puma's former senior director of regulatory affairs, according to Reuters.
Prosecutors said he made $1.1 million by trading on trial data for the now-approved breast cancer drug Nerlynx ahead of public announcements. Gadimian pleaded guilty to securities fraud and insider trading in November after authorities brought the case in late 2016.
During his time at Puma, Gadimian made millions, according to prosecutors. After losing his position, he exercised stock options worth more than $5 million. He has a house in Burbank, California, worth $2.7 million, according to the government, and a Jaguar.
In a sentencing memo, prosecutors said Gadimian's move to pay the restitution in full is "commendable," but they added the payment "was a fraction of the income that Gadimian realized while working at Puma" and at a predecessor company. Gadimian "was influenced by nothing other than pure greed," prosecutors contend.
In court, Gadimian said he knew his actions were "not only illegal but morally wrong," according to Reuters. He said there's "no excuse" for what he did.
Before its approval in July 2017, Puma had been developing Nerlynx for several years. The drug won an FDA nod to treat HER2-positive breast cancer in patients who've previously received Roche's Herceptin. Analysts have predicted the drug could generate $1.25 billion in sales by 2022.
According to court documents, Gadimian traded on nonpublic preliminary success of a phase 2 trial for the candidate in 2013. In 2014, the government says he made more than $900,000 by trading on insider details about a phase 3 trial. Gadimian entered a plea agreement late last year.