'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.”

2019 Trin­i­ty Drug In­dex Eval­u­ates Ac­tu­al Com­mer­cial Per­for­mance of Nov­el Drugs Ap­proved in 2016

Fewer Approvals, but Neurology Rivals Oncology and Sees Major Innovations

This report, the fourth in our Trinity Drug Index series, outlines key themes and emerging trends in the industry as we progress towards a new world of targeted and innovative products. It provides a comprehensive evaluation of the performance of novel drugs approved by the FDA in 2016, scoring each on its commercial performance, therapeutic value, and R&D investment (Table 1: Drug ranking – Ratings on a 1-5 scale).

UP­DAT­ED: FDA’s golodirsen CRL: Sarep­ta’s Duchenne drugs are dan­ger­ous to pa­tients, of­fer­ing on­ly a small ben­e­fit. And where's that con­fir­ma­to­ry tri­al?

Back last summer, Sarepta CEO Doug Ingram told Duchenne MD families and investors that the FDA’s shock rejection of their second Duchenne MD drug golodirsen was due to some concerns regulators raised about the risk of infection and the possibility of kidney toxicity. But when pressed to release the letter for all to see, he declined, according to a report from BioPharmaDive, saying that kind of move “might not look like we’re being as respectful as we’d like to be.”

He went on to assure everyone that he hadn’t misrepresented the CRL.

But Ingram’s public remarks didn’t include everything in the letter, which — following the FDA’s surprise about-face and unexplained approval — has now been posted on the FDA’s website and broadly circulated on Twitter early Wednesday.

The CRL raises plenty of fresh questions about why the FDA abruptly decided to reverse itself and hand out an OK for a drug a senior regulator at the FDA believed — 5 months ago, when he wrote the letter — is dangerous to patients. It also puts the spotlight back on Sarepta $SRPT, which failed to launch a confirmatory study of eteplirsen, which was only approved after a heated internal controversy at the FDA. Ellis Unger, director of CDER’s Office of Drug Evaluation I, notes that study could have clarified quite a lot about the benefit and risks associated with their drugs — which can cost as much as a million dollars per patient per year, depending on weight.

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How to cap­i­talise on a lean launch

For start-up biotechnology companies and resource stretched pharmaceutical organisations, launching a novel product can be challenging. Lean teams can make setting a launch strategy and achieving your commercial goals seem like a colossal undertaking, but can these barriers be transformed into opportunities that work to your brand’s advantage?
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What does the launch environment look like for this product?
FH: We started working on the product at Phase II and now we’re going into Phase III trials. There is a significant unmet need in this disease area, and everyone is excited about the launch. However, the organisation is still evolving and the team is quite small – naturally this causes a little turbulence.

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Every few years, a public health crisis (think Ebola, Zika) spurred by a rogue pathogen triggers a small-biotech rally, as drugmakers emerge from the woodwork with ambitious plans to treat the mounting outbreak. In most cases, that enthusiasm never quite delivers.

Things are no different, as the coronavirus outbreak in Wuhan, China takes hold. There have been close to 300 confirmed human infections in China, and at least four deaths. Coronaviruses are a large family of viruses, which include MERS and SARS. On Tuesday, the CDC reported the virus was detected in a US traveler returning from Wuhan.

Brex­it fears, Wood­ford woes over­shad­owed UK biotech and cut 2019 fi­nanc­ing by al­most half

The venture tide might have subsided, the IPO window may be closing and certain listed biotechs may be having a tough time amid Neil Woodford’s well-publicized demised, but there’s still plenty to celebrate in the UK BioIndustry Association’s eyes.

Overall investment in UK biotech last year fell from the record-breaking £2.2 billion levels of 2018 to £1.3 billion — including £679 million in venture capital, a meager £64 million in IPOs plus £596 million when you add up all public financings, according to a new report from the BIA.

Blue­print Med­i­cines po­ten­tial­ly de­lays Ay­vak­it de­ci­sion; Con­trol beats treat­ment in mesothe­lioma tri­al

→ Blueprint Medicines filed an amendment to its application to get the gastrointestinal stromal tumor (GIST) drug Ayvakit approved in fourth-line GIST, the company disclosed in the prospectus for a new $325 million public offering.  Blueprint got a big accelerated OK on the drug this month in a particular mutation, but because the FDA decided to split their review in two, they didn’t hear on fourth-line GIST. They were supposed to hear before February 14, but this amendment could push that date back by 3 months. Blueprint wrote that the amendment is designed to allow the company to comply with the FDA’s request for data from the Phase III Voyage trial before they give a judgment.

Io­n­is, Akcea boost­ed by a pos­i­tive PhII for their No­var­tis castoff car­dio drug — and they plan to push ahead in­to piv­otals

Late last year Novartis abandoned a cardio drug from Ionis’ spinoff Akcea just after the pharma giant snapped up inclisiran, going the RNAi way in guarding against heart disease in the $9.7 billion Medco buyout.

Now the pharma goliath — which is headed down the PCSK9 road with a drug it believes can be used in a mass population — can get a clearer picture of just what they gave up.

Akcea $AKCA and the mother company $IONS put out a statement early Wednesday saying that their Phase II study of AKCEA-APOCIII-LR delivered solid efficacy data, with the high dose clearly outperforming placebo in significantly reducing triglycerides as a means to cutting the risk of cardiovascular disease. In addition, investigators concluded that the drug slashed apoC-III, very low-density lipoprotein and remnant cholesterol while boosting “good” HDL levels.

Hal Barron and Emma Walmsley, GSK

GSK’s ‘break­through’ BC­MA can­cer drug gets a pri­or­i­ty re­view — and a big win for the on­col­o­gy R&D team

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Who are the young bio­phar­ma lead­ers shap­ing the in­dus­try? Nom­i­nate them for End­points' spe­cial re­port

Update: Nominations open through end of day, Monday, January 27

Two years ago, when we did our first Endpoints 20-under-40, we profiled a set of up-and-comers who promised to help reshape the industry as we know it. Now we’re back and once again looking for the top 20 biopharma professionals under the age of 40. We’ll be profiling folks who have accomplished a lot at a young age but seem on the verge of accomplishing so much more.