Ex-Phlow ex­ec, cousin ar­rest­ed in Ko­dak in­sid­er trad­ing scheme

A for­mer phar­ma­ceu­ti­cal com­pa­ny ex­ec­u­tive and his cousin were ar­rest­ed Thurs­day morn­ing for an in­sid­er trad­ing scheme based on a Covid-re­lat­ed con­tract.

A DOJ an­nounce­ment de­tailed the charges to­day, ac­cus­ing the pair of “mul­ti­ple counts of se­cu­ri­ties fraud and con­spir­a­cy to com­mit both wire fraud and se­cu­ri­ties fraud in con­nec­tion with a scheme to com­mit in­sid­er trad­ing,” ac­cord­ing to the US At­tor­ney’s Of­fice for New York’s South­ern Dis­trict. The pair had al­leged­ly made more than $1.2 mil­lion in prof­it from trad­ing Ko­dak shares with knowl­edge of a fed­er­al con­tract.

Ac­cord­ing to the in­dict­ment filed in fed­er­al court Thurs­day, An­drew Stiles used his po­si­tion as VP of gov­ern­ment ini­tia­tives and con­tract com­pli­ance at Phlow to gain ac­cess to non­pub­lic in­for­ma­tion about the gov­ern­ment fund­ing East­man Ko­dak — the pho­tog­ra­phy gi­ant — to pro­duce APIs and “key start­ing ma­te­ri­als” to pro­duce drugs in short­age as a re­sult of the Covid-19 pan­dem­ic.

Ko­dak in 2020 re­ceived a $765 mil­lion fed­er­al loan un­der the De­fense Pro­duc­tion Act. Ko­dak chief Jim Con­ti­nen­za has al­so been ac­cused of break­ing New York se­cu­ri­ty laws af­ter al­leged­ly buy­ing tens of thou­sands of shares in an­tic­i­pa­tion of land­ing this gov­ern­ment loan from for­mer Pres­i­dent Don­ald Trump’s ad­min­is­tra­tion.

“While the fund­ing was be­ing ne­go­ti­at­ed, but be­fore the gov­ern­ment’s in­ter­est in fund­ing Ko­dak had been pub­licly an­nounced, based on ma­te­r­i­al, non­pub­lic in­for­ma­tion that An­drew Stiles had ob­tained by virtue of his em­ploy­ment at Phlow, An­drew Stiles pur­chased Ko­dak stock in breach of a du­ty of trust and con­fi­dence he owed to Phlow,” the in­dict­ment read — say­ing that Stiles made around $553,000 in prof­it sell­ing the shares af­ter the fund­ing was an­nounced.

An­drew al­so tipped off his cousin, Gray Stiles, to trade Ko­dak stock be­fore the pub­lic an­nounce­ment. Gray made around $990,000 in prof­it af­ter sell­ing his stocks.

Trump ad­min­is­tra­tion of­fi­cials had signed a let­ter of in­ter­est for a $765 mil­lion loan to Ko­dak in a bid to jump­start do­mes­tic phar­ma­ceu­ti­cal man­u­fac­tur­ing. How­ev­er, the deal was halt­ed in Au­gust by the US In­ter­na­tion­al De­vel­op­ment Fi­nance Cor­po­ra­tion, say­ing in a tweet, “Re­cent al­le­ga­tions of wrong­do­ing raise se­ri­ous con­cerns. We will not pro­ceed any fur­ther un­less these al­le­ga­tions are cleared.”

The in­sid­er trad­ing did not just in­volve Ko­dak. An­drew Stiles was work­ing for ac­count­ing and con­sult­ing firm BDO USA be­fore “and for a brief pe­ri­od, con­cur­rent­ly with, his em­ploy­ment at Phlow,” ac­cord­ing to the in­dict­ment, which had a con­sult­ing agree­ment in place with No­vavax. The in­dict­ment con­tin­ued that Stiles “as­sist­ed No­vavax’s ef­forts to pro­cure over $300 mil­lion in fund­ing to sup­port its ef­forts to de­vel­op a coro­n­avirus vac­cine.”

Ac­cord­ing to the in­dict­ment, Stiles bought No­vavax stock and sold it af­ter its fund­ing an­nounce­ment — mak­ing an­oth­er $45,000.

The DOJ al­so de­tailed texts be­tween the pair dur­ing June and Ju­ly 2020, when An­drew Stiles passed in­for­ma­tion about Ko­dak to Gray Stiles. One text ex­change from Ju­ly 9, when Ko­dak ap­plied for a $655 mil­lion loan, went as fol­lows:

GRAY:       Any up­date on the film we sent off a few weeks ago to get de­vel­oped

AN­DREW: 600+.  Maybe 2 weeks out

GRAY:        I can live with that ha­ha­ha

Be­tween June and Ju­ly 27, 2020, when Trump of­fi­cials first pub­li­cized the let­ter of in­tent with Ko­dak, An­drew Stiles bought 90,000 shares of Ko­dak stock, even up to the day be­fore the LOI “was sched­uled to be an­nounced,” ac­cord­ing to the DOJ. Gray Stiles pur­chased more than 30,000 shares — the ma­jor­i­ty of which were pur­chased the day be­fore the sched­uled an­nounce­ment.

On Ju­ly 27, 2020, An­drew texted Gray “Tmw,” which the DOJ said was in­di­cat­ing the ex­pect­ed date of the an­nounce­ment.

Gray’s re­sponse? “Hot damn.”

The pair then bought an­oth­er 10,000 shares of Ko­dak stock each — af­ter the text ex­change and be­fore the an­nounce­ment.

Forge Bi­o­log­ics’ cGMP Com­pli­ant and Com­mer­cial­ly Vi­able Be­spoke Affin­i­ty Chro­matog­ra­phy Plat­form

Forge Biologics has developed a bespoke affinity chromatography platform approach that factors in unique vector combinations to streamline development timelines and assist our clients in efficiently entering the clinic. By leveraging our experience with natural and novel serotypes and transgene conformations, we are able to accelerate affinity chromatography development by nearly 3-fold. Many downstream purification models are serotype-dependent, demanding unique and time-consuming development strategies for each AAV gene therapy product1. With the increasing demand to propel AAV gene therapies to market, platform purification methods that support commercial-scale manufacturing of high-quality vectors with excellent safety and efficacy profiles are essential.

Luke Miels, GSK chief commercial officer

GSK picks up Scynex­is' FDA-ap­proved an­ti­fun­gal drug for $90M up­front

GSK is dishing out $90 million cash to add an antifungal drug to its commercial portfolio, in a deal spotlighting the pharma giant’s growing focus on infectious diseases.

The upfront will lock in an exclusive license to Scynexis’ Brexafemme, which was approved in 2021 to treat a yeast infection known as vulvovaginal candidiasis, except in China and certain other countries where Scynexis already out-licensed the drug.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,900+ biopharma pros reading Endpoints daily — and it's free.

Feng Zhang (Susan Walsh/AP Images)

In search of new way to de­liv­er gene ed­i­tors, CRISPR pi­o­neer turns to mol­e­c­u­lar sy­ringes

Bug bacteria are ruthless.

Some soil bacteria have evolved tiny, but deadly injection systems that attach to insect cells, perforate them and release toxins inside — killing a bug in just a few days’ time. Scientists, on the other hand, want to leverage that system to deliver medicines.

In a paper published Wednesday in Nature, MIT CRISPR researcher Feng Zhang and his lab describe how they engineered these syringes made by bacteria to deliver potential therapies like toxins that kill cancer cells and gene editors. With the help of an AI program, they developed syringes that can load proteins of their choice and selectively target human cells.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,900+ biopharma pros reading Endpoints daily — and it's free.

CSL CEO Paul McKenzie (L) and CMO Bill Mezzanotte

Q&A: New­ly-mint­ed CSL chief ex­ec­u­tive Paul McKen­zie and chief med­ical of­fi­cer Bill Mez­zan­otte

Paul McKenzie took over as CEO of Australian pharma giant CSL this month, following in the footsteps of long-time CSL vet Paul Perreault.

With an eye on mRNA, and quickly commercializing its new, $3.5 million-per-shot gene therapy for hemophilia B, McKenzie and chief medical officer Bill Mezzanotte answered some questions from Endpoints News this afternoon about where McKenzie is going to take the company and what advances may be coming to market from CSL’s pipeline. Below is a lightly edited transcript.

Boehringer re­ports ro­bust sales led by type 2 di­a­betes and pul­monary drugs, promis­es more to come high­light­ing obe­si­ty

Boehringer Ingelheim reported human pharma sales of €18.5 billion on Wednesday, led by type 2 diabetes and heart failure drug Jardiance and pulmonary fibrosis med Ofev. Jardiance sales reached €5.8 billion, growing 39% year over year, while Ofev took in €3.2 billion, notching its own 20.6% annual jump.

However, Boehringer is also looking ahead with its pipeline, estimating “In the next seven years the company expects about 20 regulatory approvals in human pharma.”

Mathai Mammen, FogPharma's next CEO

Math­ai Mam­men hands in J&J's R&D keys to lead Greg Ver­dine’s Fog­Phar­ma 

In the early 1990s, Mathai Mammen was a teaching assistant in Greg Verdine’s Science B46 course at Harvard. In June, the former R&D head at Johnson & Johnson will succeed Verdine as CEO, president and chair of FogPharma, the same month the seven-year-old biotech kickstarts its first clinical trial.

After leading R&D at one of the largest drugmakers in the world, taking the company through more than half a dozen drug approvals in the past few years, not to mention a Covid-19 vaccine race, Mammen departed J&J last month and will take the helm of a Cambridge, MA biotech attempting to go after what Verdine calls the “true emperor of all oncogenes” — beta-catenin.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,900+ biopharma pros reading Endpoints daily — and it's free.

FDA ap­proves Nar­can opi­oid over­dose re­ver­sal spray for over-the-counter sale

The FDA today approved Emergent BioSolutions’ Narcan brand naloxone nasal spray for over-the-counter sales. The nod was expected and comes on the heels of a unanimous 19-0 advisory committee vote in favor of approval last month.

The move to OTC means the opioid overdose reversal agent will now be available on grocery, convenience and gas stations shelves, as well as potentially for purchase online.

J&J bows out of RSV vac­cine race, end­ing PhI­II study and ced­ing to Pfiz­er, GSK

Johnson & Johnson announced Wednesday morning it is ending development of its adult RSV vaccine that was in the middle of a 27,200-patient trial, giving up a big slice of what’s expected to be the next multibillion-dollar pharma market.

The decision came down to the shifting RSV “competitive landscape,” a company spokesperson tells Endpoints News, adding the “breadth of options” was much different than when J&J first started its pivotal study. The spokesperson declined to comment on the Phase III data, saying only the shot is undergoing an “ongoing assessment.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,900+ biopharma pros reading Endpoints daily — and it's free.

Sally Susman, Pfizer EVP and chief corporate affairs officer

Q&A: Pfiz­er cor­po­rate com­mu­ni­ca­tions chief Sal­ly Sus­man dis­cuss­es book craft­ed in pan­dem­ic and per­son­al lessons

From the political arena to the finance and beauty industries to pharmaceuticals, Pfizer’s Sally Susman has broken barriers, stereotypes and conventions. And now the chief communicator is “Breaking Through,” the title of her first book about effective and innovative communications launching today. The full official title is “Breaking Through: Communicating to Open Minds, Move Hearts, and Change the World.”

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.