'U snooze u lose': Judg­ment day for $100M biotech in­sid­er trad­ing scheme looms as son of for­mer Ari­ad di­rec­tor stands tri­al

A crim­i­nal tri­al that be­gins to­day in Man­hat­tan promis­es to un­rav­el a glob­al in­sid­er trad­ing ring that prof­it­ed off of non-pub­lic in­for­ma­tion about mul­ti­ple biotechs — be­gin­ning with the son of a for­mer board di­rec­tor at Ari­ad Phar­ma­ceu­ti­cals.

Tele­maque Lavi­das

Tele­maque Lavi­das is the first de­fen­dant to ap­pear in front of a ju­ry among six charged for the scheme. He was in­dict­ed for pro­vid­ing George Nikas, a busi­ness­man who owned a Greek restau­rant chain in New York, with in­sid­er in­for­ma­tion from his fa­ther, Athanase Lavi­das. Nikas was al­leged­ly at the cen­ter of the whole con­spir­a­cy, chum­ming up with in­vest­ment bankers and a se­cu­ri­ties trad­er to en­rich him­self.

“The in­ves­ti­ga­tion to date has iden­ti­fied over 50 deals where the sub­ject traders have en­gaged in sus­pi­cious trad­ing, as a re­sult of which the par­tic­i­pants in the scheme have col­lec­tive­ly made over $100 mil­lion in prof­its,” ac­cord­ing to a 2017 FBI af­fi­davit ob­tained by Bloomberg.

The in­dict­ment al­lud­ed to “tens of mil­lions of dol­lars in il­lic­it prof­its” but didn’t spec­i­fy a num­ber.

The max­i­mum statu­to­ry term of im­pris­on­ment for all counts against Tele­maque Lavi­das is 135 years, a let­ter from the Act­ing US At­tor­ney filed with the court in­di­cat­ed.

Specif­i­cal­ly, the pros­e­cu­tors point­ed to four times be­tween 2013 and 2015 when Athanase Lavi­das, the CEO of fam­i­ly-owned Lavipharm named Di­rec­tor-1 in the in­dict­ment, dis­closed ma­te­r­i­al non-pub­lic in­for­ma­tion about Ari­ad to his son in a breach of con­fi­den­tial­i­ty. Tele­maque Lavi­das then turned the in­tel over to Nikas, al­leged­ly in ex­change for mul­ti­ple pay­ments. Nikas’ al­leged un­law­ful trades in­clud­ed:

  • Pur­chas­ing 14,000 Ari­ad shares on June 28, 2013 in an­tic­i­pa­tion of Eu­ro­pean ap­proval of Iclusig;
  • Sell­ing Ari­ad shares and build­ing a short po­si­tion from Oc­to­ber 4 through Oc­to­ber 8, 2013 just be­fore Ari­ad re­vealed that the FDA had con­cerns about Iclusig clin­i­cal tri­als and put them on par­tial hold;
  • Buy­ing Ari­ad Shares and op­tions be­tween No­vem­ber and De­cem­ber 2013 ahead of the re­sump­tion of Iclusig mar­ket­ing in the US;
  • Stock­ing up on Ari­ad con­tracts for dif­fer­ence (CFDs) be­tween Ju­ly and Au­gust 2015 af­ter learn­ing that Bax­al­ta had sent a non-bind­ing of­fer to ac­quire Ari­ad

By the es­ti­mates re­vealed in the in­dict­ment, Nikas made at least $2 mil­lion from these four trades. Dur­ing the same pe­ri­od and be­yond, he al­leged­ly reaped many more through trans­ac­tions on the stocks of In­ter­Mune, Idenix, Avanir, Re­cep­tos, Om­ni­care, Syn­gen­ta, Sol­era and Buf­fa­lo — all be­fore they were set to be ac­quired. He did so with the help of Lon­don-based bankers Ben­jamin Tay­lor and Da­ri­na Wind­sor (of Moelis and Cen­ter­view, re­spec­tive­ly), ex-Gold­man Sachs banker Bryan Co­hen, and se­cu­ri­ties trad­er Joseph El-Khouri.

To make mat­ters worse, the group “took nu­mer­ous steps to con­ceal their un­law­ful scheme, in­clud­ing the use of mul­ti­ple un­reg­is­tered ‘burn­er’ cell­phones to com­mu­ni­cate with each oth­er,” the in­dict­ment charged. In one in­stance, Co­hen al­leged­ly com­mu­ni­cat­ed with oth­er mem­bers of the scheme on his burn­er phone from a restau­rant owned and op­er­at­ed by Nikas.

Co­hen has pled guilty af­ter pre­vi­ous­ly deny­ing wrong­do­ing and his tri­al is sched­uled for Feb­ru­ary 4.

Lavi­das has been in jail since he was ar­rest­ed in Oc­to­ber 2019. His tri­al would like­ly shed light on a se­cre­tive scheme that Nikas was ap­par­ent­ly try­ing to bring more peo­ple in­to.

From the in­dict­ment:

On or about Ju­ly 27, 2013, GEOR­GIOS NIKAS, a/k/a “George Nikas,” the de­fen­dant, emailed an ac­quain­tance and wrote “Was try­ing to find u 3 weeks ago when I had some se­ri­ous­ly juicy in­fo for u but nowhere to be found” and fur­ther wrote that the in­for­ma­tion was “Stock mar­ket re­lat­ed. U snooze u lose.”

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Bris­tol My­ers is clean­ing up the post-Cel­gene merg­er pipeline, and they’re sweep­ing out an ex­per­i­men­tal check­point in the process

Back during the lead up to the $74 billion buyout of Celgene, the big biotech’s leadership did a little housecleaning with a major pact it had forged with Jounce. Out went the $2.6 billion deal and a collaboration on ICOS and PD-1.

Celgene, though, also added a $530 million deal — $50 million up front — to get the worldwide rights to JTX-8064, a drug that targets the LILRB2 receptor on macrophages.

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UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

David Meline (file photo)

Mod­er­na’s new CFO took a cut in salary to jump to the mR­NA rev­o­lu­tion­ary. But then there’s the rest of the com­pen­sa­tion pack­age

David Meline took a little off the top of his salary when he jumped from the CFO post at giant Amgen to become the numbers czar at the upstart vaccines revolutionary Moderna. But the SEC filing that goes with a major hire also illustrates how it puts him in line for a fortune — provided the biotech player makes good as a promising game changer.

To be sure, there’s nothing wrong with the base salary: $600,000. Or the up-to 50% annual cash bonus — an industry standard — that comes with it. True, the 62-year-old earned $999,000 at Amgen in 2019, but it’s the stock options that really count in the current market bliss for all things biopharma. And there Meline did well.

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Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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Mer­ck wins a third FDA nod for an­tibi­ot­ic; Mereo tack­les TIG­IT with $70M raise in hand

Merck — one of the last big pharma bastions in the beleaguered field of antibiotic drug development — on Friday said the FDA had signed off on using its combination drug, Recarbrio, with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia. The drug could come handy for use in hospitalized patients who are afflicted with Covid-19, who carry a higher risk of contracting secondary bacterial infections. Once SARS-CoV-2, the virus behind Covid-19, infects the airways, it engages the immune system, giving other pathogens free rein to pillage and plunder as they please — the issue is particularly pertinent in patients on ventilators, which in any case are breeding grounds for infectious bacteria.