Lauren Wood, former head of corporate communications for biotech Immunomedics, has pleaded guilty to securities fraud after buying stock in the company based on a tip from former boyfriend Usama Malik, Immunomedics’ chief financial officer at the time.
Both Malik and Wood were arrested Dec. 1, 2021 in relation to the alleged scheme, in which Malik was charged for insider trading, securities fraud and securities fraud conspiracy. Malik maintains his innocence, pleading not guilty to all charges May 19, and is currently free on bail. His attorneys Barry Berke, Mike Martinez and Rodney Villazor said, “Usama Malik is a true American success story wrongly charged in this case,” in a statement released to Fierce Biotech May 11.
Wood now faces up to 20 years in prison and a $5 million fine, according to a June 22 release from the District of New Jersey’s U.S. Attorney office. Her sentencing is set for Nov. 21.
According to the charges, Malik had been notified of an FDA decision about one of Immunomedics’ investigational drug trials before the information became public. Malik was one of the first and only Immunomedics employees familiar with the information before April 6, 2020, when it was publicly disclosed that the FDA allowed the phase 3 trial of breast cancer drug Trodelvy to stop because the therapy proved effective.
Within minutes of learning the nonpublic information, Malik allegedly told Wood, who he lived with at the time. Within hours, Wood had purchased 7,000 shares of Immunomedics stock, despite financial experts downgrading the stock at the time. After the company announced Trodelvy’s success April 6, Immunomedics’ stock price skyrocketed. Wood sold her shares, doubling her investment and making a gross profit of more than $213,000.
Trodelvy—which snagged a nod from the FDA for breast cancer in April 2021 and is now marketed by Gilead—itself has an embattled history, with a $4 million settlement proposed to resolve a lawsuit alleging Immunomedics violated securities laws by distorting information it planned to present at the American Society of Clinical Oncology’s 2016 annual meeting. The charges against Malik are not related to the 2016 lawsuit.
Malik held his role as CFO at Immunomedics for four years, leading the biopharma to a $21 billion exit via acquisition by Gilead in 2020. He later joined Fore Biotherapeutics as CEO in February 2021, though the role was short-lived: company ousted him in December following the charges, though they’re unrelated to Fore.