Ex-Pfizer Employee Convicted of Insider Trading Related to Paxlovid Data
19 Jan 2024
Patent Infringement
Pictured: Desk with case gavel and scales of justice/iStock, lakshmiprasad S
A federal jury in Manhattan has brought back a guilty verdict against former Pfizer employee Amit Dagar for insider trading and conspiracy to commit insider trading related to the launch of the company’s COVID-19 antiviral Paxlovid.
On Thursday, the U.S. Attorney for the Southern District of New York announced that the jury found Dagar guilty of insider trading charges after a two-week trial. According to the indictment and the evidence presented at trial, Dagar in 2021 participated in an insider trading scheme and received “illicit profits” from options trading that came from inside information, specifically the results of clinical trials involving Paxlovid.
Dagar, who was employed by Pfizer and assisted in managing the data analysis for specific clinical trials, was accused of learning in 2021 that Paxlovid’s clinical trial had good results and using that insider information purchased “short-dated, out-of-the-money” Pfizer call options. He also reportedly tipped off a close friend who bought options.
Upon Pfizer posting the results of the Paxlovid trial on Nov. 5, 2021, Pfizer’s stock jumped up over 10% from the closing of the previous day. Dagar sold his options in the following weeks and made over $270,000 in profit.
“As the jury’s swift verdict shows, the proof at trial was overwhelming that Amit Dagar stole information about Paxlovid from his employer, Pfizer, and used that illegal edge to profit in the stock market. Combatting the corruption of our financial markets continues to be a top priority of this Office,” U.S. Attorney Damian Williams said in a statement.
One count of securities fraud, which Dagar has been convicted of, carries a maximum sentence of 20 years in prison, while the conspiracy charges carry a five-year maximum. The judge will rule on sentencing at a later date.
The inside trading charges against Dagar and his friend and business partner Atul Bhiwapurkar were filed in 2023, with Bhiwapurkar taking a guilty plea in October after being arrested over the summer. According to the U.S. Attorney, Bhiwapurkar garnered over $60,000 in profit from the insider trading scheme.
The Southern District has been vigilant against insider trading in biopharma. In 2022, nine people were indicted for charges related to insider trading, while a Washington, D.C. court around that same timeframe announced Geroge Haywood, an investor in Synptogenix, formerly known as Neurotrope, had pleaded guilty to insider trading.
Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.
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