Ex-Pfizer worker charged with insider trading on covid pill info

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A former Pfizer employee and his close friend were arrested Thursday (June 29) morning on charges they illegally used insider information about breakthrough results from the trial of the pharmaceutical giant’s anti-covid medicine Paxlovid to profit off its stock.

Amit Dagar, who worked on the Paxlovid trial, bought options betting Pfizer’s stock would rise hours after learning from his supervisor in November 2021 that the company was planning to announce the medicine would be a “game changer” in combating the pandemic, the government alleges. Dagar also allegedly tipped off Atul Bhiwapurkar, a friend and business partner, who followed suit.

The two men pocketed a total profit of more than $350,000, according to the U.S. Attorney for the Southern District of New York, who is prosecuting the criminal case.

“Insider trading is not a quick buck,” U.S. Attorney Damian Williams said in a statement announcing the arrests and others in three unrelated insider trading cases. “It’s not easy money. It’s not a sure thing. It’s cheating. It’s a bad bet. It’s a ticket to prison.”

Attorneys for Dagar and Bhiwapurkar denied the charges. “Nobody at Pfizer ever told Mr. Dagar, who was on the ‘blinded’ side, the results of the Paxlovid trial,” Patrick Smith, an attorney for Dagar, said in an email. He said Dagar “looks forward to defending himself in court.”

Michael Bachner, who is representing Bhiwapurkar, said his client’s investment was “based on publicly available information released by Pfizer two days before the announcement, in which they touted the likelihood of a successful test and the efficacy of Paxlovid.”

“We intend to vigorously defend this case against the charges,” Bachner said.

Pfizer spokesperson Pamela Eisele said in a statement the company is cooperating with the investigation. “The charges in this case relate to the personal conduct of a former Pfizer employee in violation of the company’s policies,” she said.

Federal prosecutors allege Dagar, who performed data analysis on the Paxlovid trial but was meant to be in the dark about its outcome, learned the medicine was returning “extraordinarily positive” results after his manager was inadvertently tipped off to its success. The manager messaged Dagar on Nov. 4, 2021, that the trial “got the outcome,” and the company would be sending a press release the following day. Dagar responded “oh really” and “kind of exciting,” according to prosecutors.

He placed his trades early that afternoon, and Bhiwapurkar made his own investments two hours later. Pfizer announced the results the following morning. The company’s stock shot up more than 10 percent that day.

Dagar, 44, faces four counts of securities fraud, each with a maximum sentence of 20 years in prison, and one count of conspiracy to commit securities fraud, with a maximum sentence of five years in prison, according to federal prosecutors. Bhiwapurkar, 45, faces two counts of securities fraud and one count of conspiracy to commit securities fraud.

Dagar and Bhiwapurkar also face civil charges of securities fraud from the Securities and Exchange Commission, which is seeking to recoup their profits with interest and assess them fines.