Insider trading in Washington: NY Congressman indicted for sharing inside biotech tips ahead of massive trial failure
A tiny Australian biotech that experienced a very public and explosive clinical trial failure is once again in the spotlight — this time, for its ties to a US Congressman now charged on a high-profile insider trading case.
The company, Innate Immunotherapeutics, is probably best known for its biggest fan: New York GOP Rep. Chris Collins, who touted the stock among House Republicans for years. Now, Collins, who sat on the board of Innate, has been indicted for insider trading Wednesday, accused of sharing information on the trial failure before it went public.
In June 2017, Innate’s CEO sent an email to all board members that detailed “extremely bad news” about a clinical trial for their drug MIS416 for multiple sclerosis. Just seconds after receiving that email, Collins called his son, Cameron Collins, who sold their shares in the company, avoiding losses of more than $768,000, the indictment said.
A statement from the office of the Manhattan US Attorney Geoffrey S. Berman said charges would also be filed against Collins’ son Cameron, and Stephen Zarsky, the father of Cameron’s fiancée.
Collins has been in the news several times before now for his ties to Innate. Back in June of last year, STAT’s Damian Garde covered the Congressman’s evangelistic devotion to the stock. According to Garde, Collins had convinced a half dozen House Republicans to buy Innate stock, including former Health and Human Services Secretary Tom Price. And in a three-day span, the following representatives bought in: Reps. Markwayne Mullin, Douglas Lamborn, Billy Long, Mike Conaway, and John Culberson.
Collins, however, was the company’s biggest shareholder with 16.8%. STAT reported back in 2017 that his Innate holdings were worth $45.5 million early in the year. After the trial failure, that figure fell to barely $1.5 million.
Image: Rep. Chris Collins. AP IMAGES