Usama Malik—former chief financial officer at Immunomedics and, more recently, CEO of Fore Biotherapeutics—has been formally indicted for insider trading, securities fraud and securities fraud conspiracy after allegedly sharing insider information with his then-girlfriend.
The indictments, filed Wednesday, stem from Malik’s time as CFO at Immunomedics, a role he held for four years, leading the biopharma to a $21 billion exit via acquisition by Gilead in 2020.
Malik then joined Fore Biotherapeutics as CEO in February 2021, though the role was short-lived. The company ousted him in December following charges from the U.S. Securities and Exchange Commission (SEC), though the charges are unrelated to Fore. Nearly five months later, Fore installed Matthew Ros to replace Malik as CEO.
Now, 47-year-old Malik faces formal allegations tied to stock trades made after he was notified of an FDA decision about one of Immunomedics' investigational drug trials. Malik was one of the first and only Immunomedics employees familiar with the nonpublic 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, according to the charges.
Trodelvy—which snagged a full breast cancer nod from the FDA in April 2021—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 SEC charges against Malik are not related to the 2016 lawsuit.
Within minutes of learning the nonpublic information, Malik allegedly told Lauren Wood, his then-girlfriend who he also lived with. 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.
Both Malik and Wood were arrested Dec. 1, 2021.
Malik maintains his innocence and appears ready to head to trial, with his attorneys Barry Berke, Mike Martinez and Rodney Villazor saying, “Usama Malik is a true American success story wrongly charged in this case,” in a joint statement released to Fierce Biotech.
“Among his many achievements, he helped develop a breakthrough drug to treat advanced breast cancer as a senior executive at Immunomedics,” Malik’s attorneys said. “The prosecution presents a false and speculative narrative in seeking to wrongly hold Mr. Malik responsible for the independent and modest trading of others in Immunomedics unrelated to his own substantial stock holdings in the company. Mr. Malik looks forward to the truth coming out and being vindicated at trial.”
In December, after being fired from Fore, Malik founded business consulting services Humanly Advisors, which aims to “advise companies and organizations on sustainable, resilient, and humanist growth models.”