Af­ter set­tling with the SEC, biotech VC Steven Bur­rill now faces up to 30 years for fraud, tax eva­sion charges

Not on­ly did Steven Bur­rill loot mil­lions from his biotech fund to sup­port a lav­ish lifestyle and find ways to pam­per his wife and girl­friend, he al­so al­leged­ly failed to pay tax­es on the mon­ey he ad­mit­ted tak­ing. And now Bur­rill, once one of the most promi­nent ven­ture cap­i­tal­ists in the in­dus­try, faces mul­ti­ple counts of fraud and up to 30 years in prison if con­vict­ed.

Ear­li­er this week the US De­part­ment of Jus­tice spread the word that Bur­rill had been in­dict­ed by a fed­er­al grand ju­ry in San Fran­cis­co on some 34 counts that he com­mit­ted wire fraud, in­vest­ment ad­vis­er fraud, and tax eva­sion in tak­ing cash out of his biotech fund.

Marc Howard Berg­er was charged with help­ing him pre­pare those al­leged­ly fraud­u­lent tax re­turns.

Ac­cord­ing to the DoJ:

Bur­rill in­duced “lim­it­ed part­ners to con­tribute cap­i­tal to the Fund with false and mis­lead­ing let­ters. In ad­di­tion, the in­dict­ment al­leges Bur­rill caused the Fund to trans­fer mil­lions of dol­lars in man­age­ment fees to com­pa­nies he con­trolled; the mon­ey was in ex­cess of the man­age­ment fees that were due and al­low­able un­der the agree­ments that gov­erned the Fund. Fur­ther, the in­dict­ment al­leges Bur­rill filed false and fraud­u­lent U.S. In­di­vid­ual In­come Tax Re­turn, Forms 1040, which un­der­stat­ed his in­come by ex­clud­ing mon­ey Bur­rill trans­ferred out of the Fund and in­to ac­counts he con­trolled.”

Add it all up, and that comes to up to 20 years in prison to cov­er the wire fraud charges, 5 years for in­vest­ment ad­vis­er fraud and 5 more years for tax eva­sion, along with mil­lions of dol­lars in po­ten­tial fines.

Ac­cord­ing to the SEC’s lit­i­ga­tion, Bur­rill’s mon­ey prob­lems start­ed in 2007, when he first dipped in­to the $283 mil­lion Fund III to cov­er ex­pens­es at his man­age­ment com­pa­ny. Over the next 7 years, such trans­fers be­came rou­tine, in­clud­ing tap­ping the fund to top up his per­son­al bank ac­count. About $4.6 mil­lion was al­leged­ly used to cov­er per­son­al costs, in­clud­ing jew­el­ry from Tiffany’s.

Bur­rill’s prob­lems turned crit­i­cal af­ter he had a falling out with some of his staffers. Af­ter he fired them, they alert­ed in­vestors, who quick­ly seized con­trol of the fund and start­ed a chain of events that has yet to ful­ly play out.


Im­age: Steven Bur­rill, fif­teen years ago, pos­ing at a fo­rum “No­bel Prizes and Biotech­nol­o­gy Gu­rus cel­e­brate DNA Dis­cov­ery’s 50th An­niver­sary” in Ly­on, France Get­ty

Hal Barron, GSK

Break­ing the death spi­ral: Hal Bar­ron talks about trans­form­ing the mori­bund R&D cul­ture at GSK in a crit­i­cal year for the late-stage pipeline

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And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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Some Big Phar­mas stepped up their game on da­ta trans­paren­cy — but which flunked the test?

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Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

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Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

Apotex, though, has been a disaster ground. The manufacturer voluntarily yanked the ANDAs on 31 drugs — in late 2017 — after the FDA came across serious manufacturing deficiencies at their plants in India. A few days ago, the FDA made it official.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

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Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.