Two former Ariad employees and the spouse of a former employee are in hot water for alleged insider trading surrounding the company’s safety problems with Iclusig back in 2013.
The Securities and Exchange Commission has charged Maureen E. Curran, former senior director of pharmacovigilance and risk management, and her former associate director, Susan Dubuc, with avoiding losses by using inside information. They also charged Harold L. Altvater, the spouse of a former Ariad employee, who they said used info he learned from his wife to make trades before both bad news and good news.
The trades came out of Ariad’s safety mess with Iclusig back in 2013. According to the feds, Ariad employees and their relatives knew in advance of public announcements about safety issues with the leukemia med that would devastate Ariad’s stock price.
The morning of October 9, 2013, Ariad announced that it was stopping all Iclusig trials due to evidence of serious arterial thrombosis in patients treated with the drug. The news led to a 66% one-day decline in share price. Later in the month, Ariad announced it was pulling Iclusig from the market, further hurting share prices.
The SEC alleges Curran avoided $9,420 in losses by trading on nonpublic information and that Dubuc, after receiving a “blackout notice” from the FDA prohibiting all trades by employees and family members, tipped off her relatives to sell shares. They avoided a $2,888 loss in the process, according to the SEC.
Curran and Dubuc have pending settlements with the SEC that state they don’t admit or deny the charges, but that they will pay disgorgement of $9,420 and $2,888, respectively, plus civil penalties in the same amount. They’re also to pay prejudgment interest of $1,408 and $310, respectively.
The SEC alleges that by trading on private information ahead of company announcements, Altvater avoided losses and gained profits of $102,026. Further, he allegedly tipped off a friend, who made $4,188 on Ariad trades.
In the Altvater case, the feds are seeking a permanent injunction, disgorgement, prejudgment interest and civil penalties. All of the cases are civil, meaning the government can't seek jail time for the alleged violations.
Ariad was eventually able to get Iclusig back on the market earlier than some had expected, boosting share prices. The SEC alleges Altvater knew that information and traded ahead of public announcements to his benefit.
Since the Iclusig safety episode, Ariad has sold itself to Japanese drugmaker Takeda for $5.2 billion. Takeda then announced a round of layoffs as it seeks to realize savings from the deal.