A former statistician at Pfizer and his associate have been charged (PDF) with insider trading, using advance information on a drug trial to make more than $350,000 from stock purchases they executed one day before the company announced trial results for COVID-19 drug Paxlovid.
According to charging documents, Amit Dagar, 44, of Hillsborough, New Jersey, received notice from his supervisor that the trial of Pfizer’s COVID oral antiviral was a success and that the company was set to reveal the results the next day.
Dagar allegedly shared the information with his friend and business associate Atul Bhiwapurkar, 45, of Milpitas, California, and the two purchased short-term stock options, including some that expired the next day, the Securities and Exchange Commission (SEC) said. The trades generated profit of $214,395 for Dagar and $60,300 for Bhiwapurkar.
When Pfizer announced results of the trial on Nov. 5, 2021, CEO Albert Bourla, Ph.D., called Paxlovid a “game-changer” in the fight against the coronavirus and the company’s shares soared by nearly 11%, which was the largest one-day move in the stock since 2009.
Criminal charges against Dagar include conspiracy and four counts of securities fraud while Bhiwapurkar faces conspiracy and two counts of securities fraud. Additionally, the SEC seeks injunctive relief, disgorgement and civil penalties for both defendants, who were arrested Thursday morning.
“Insider trading is not a quick buck. It’s not easy money. It’s not a sure thing. It’s cheating. It’s a bad bet. It’s a ticket to prison,” U.S. Attorney Damian Williams said in a release.
Dagar was a senior statistical program lead for the Paxlovid trial. But in his role on the “blinded” side of the study, Dagar did not know its results and did not get advance information from anyone, his lawyer, Patrick Smith, told Reuters.
Dagar’s supervisor, according to the SEC, told him via chat “we got the outcome” and that there would be a “press release tomorrow.” Dagar responded, the SEC said, with “oh really” and “kind of exciting.”
Also on Thursday, the U.S. attorney revealed insider trading charges against five people—including former Alexion Vice President Joseph Dupont and a Massachusetts police chief—who allegedly took advantage of prior knowledge of Alexion’s 2020 acquisition of Portola Pharmaceuticals to make trades that netted more than $2.2 million.