A former Pfizer employee was convicted on Thursday of insider trading for using knowledge gained through the pharmaceutical giant to profit to the tune of hundreds of thousands of dollars.
The drug 44-year-old Amit Dagar chose to gamble on using inside information was the COVID antiviral Paxlovid, according to federal prosecutors. A jury found the defendant guilty on one count of securities fraud.
Dagar stood accused of purchasing stock options and tipping off a friend to the opportunity on Nov. 4, 2021. That was just one day before the company made public trial results for Paxlovid that indicated it performed well.
After the verdict was reached, U.S. Attorney Damian Williams said the result should serve as a warning to those lured by the promise of a quick profit through insider trading.
The defendant was previously a senior statistical program lead for the drug trial. The Securities and Exchange Commission has an ongoing civil case against Dagar and his friend and alleged co-conspirator Atul Bhiwapurkar.
Ex-Pfizer employee convicted of insider trading on COVID drug study https://t.co/LSluhKgUcs pic.twitter.com/DHolcamCJe
— New York Post (@nypost) January 18, 2024
Bhiwapurkar pleaded guilty to the same charge in October, and both defendants face maximum sentences of up to 20 years behind bars. The expectation, however, is for the terms to be much less.
Prosecutors alleged Dagar learned in 2021 that the drug trials were largely successful. The results were confidential, but he was charged with obtaining out-of-the-money Pfizer call options later that same day.
Dagar shared the inside information with a friend who made similar purchases. On November 5, the company made the results public and its share price shot up more than 10%.
The former employee then exercised his call options over the next few weeks. This resulted in over $270K in profits for Dagar.
Pfizer reaped the rewards of COVID-19 as the pharmaceutical company’s 2022 earnings soared to a record $100 billion. CNBC reported that nearly $57 billion of that total came from its coronavirus vaccine and antiviral pill Paxlovid.
Vaccine sales slowed that year from the previous record haul of 2021, the first full year the COVID shot was on the market. But Paxlovid made up for that by increasing its sales $18.9 billion in 2022, its first full year of availability.
