A biostatistician working for a U.S. pharmaceutical company used information about positive results in a cancer drug trial to engage in insider trading, U.S. authorities are alleging.
In court filings, the U.S. Securities and Exchange Commission (SEC) alleged that Hong (John) Wang and his company, Precision Clinical Consulting LLC, engaged in insider trading involving the stock of a Massachusetts-based biopharmaceutical firm, C4 Therapeutics, Inc., based on data from its cancer drug trials.
The SEC alleged that in 2023, as part of a consulting contract that required him to conduct biostatistical analysis on clinical trial data for the company’s flagship drug for treating multiple myeloma and non-Hodgkin lymphoma, Wang learned of the trial’s positive results, which weren’t made public until mid-December 2023.
Before that, it’s alleged that Wang acquired more than 160,000 shares in the company across four different brokerage accounts, generating almost US$490,000 in realized and unrealized trading profits, as the company’s stock price jumped by more than 100% once the clinical trial results were made public.
The SEC’s complaint charges Wang and Precision with securities violations, and seeks disgorgement plus interest against Wang and Precision, and permanent injunctive relief and civil penalties against Wang.
In a parallel action, the U.S. attorney’s office for the District of Massachusetts also charged Wang with three counts of securities fraud.
The allegations haven’t been proven.
Wang was arrested at his home in New Jersey, and is expected to appear in a federal court in Boston at a later date.