By Jonathan Stempel
(Reuters) – A former chief financial officer of a New Jersey biotechnology company has been indicted for insider trading after allegedly giving his girlfriend nonpublic information about clinical trial results for a new breast cancer drug.
The indictment unveiled on Tuesday charges Usama Malik, 47, the former CFO of Immunomedics Inc, with insider trading, securities fraud and securities fraud conspiracy.
Prosecutors in New Jersey had in December charged Malik and former Immunomedics communications chief Lauren Wood, 33, who had been his girlfriend, with securities fraud.
“Usama Malik is a true American success story wrongly charged in this case,” Malik’s lawyers Barry Berke, Michael Martinez and Rodney Villazor said in a joint statement.
“The prosecution presents a false and speculative narrative in seeking to wrongly hold Mr. Malik responsible for the independent and modest trading of others,” they continued. “Mr. Malik looks forward to the truth coming out and being vindicated at trial.”
Lawyers for Wood did not immediately respond to requests for comment.
Prosecutors said Malik knew before a April 6, 2020 public announcement that the U.S. Food and Drug Administration would let Immunomedics halt its trial for the breast cancer treatment Trodelvy because the drug had proven effective.
Malik allegedly disclosed the results to Wood, who lived with him at the time though she had left the company.
Prosecutors said Wood then bought 7,000 Immunomedics shares for $64,400 and sold them three months later for a $213,618 profit.
Malik also leaked the results to some relatives, who then traded in Immunomedics stock, the indictment said.
Gilead Sciences Inc bought Immunomedics for $20.6 billion in October 2020.
Malik later became chief executive of privately-held Fore Biotherapeutics, a job he lost when he was originally charged.
The U.S. Securities and Exchange Commission in December filed related civil charges against Malik and Wood.
(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot)
