Former Immunomedics CFO pleads guilty to securities fraud over Trodelvy tip

Former Immunomedics Chief Financial Officer Usama Malik has pleaded guilty to a charge of insider trading for tipping off his girlfriend that the biotech’s breast cancer drug had succeeded in a clinical trial, allowing her time to purchase shares before the information went public.

Malik pleaded guilty to one count of securities fraud/insider trading in New Jersey federal court on Wednesday, according to a Department of Justice (DOJ) press release.

The case stems from a clinical trial for the breast cancer drug now known as Trodelvy and owned by Gilead Sciences. While serving as CFO at Immunomedics, Malik was one of the few people who in April 2020 was informed that the therapy had succeeded in a phase 3 study. The FDA had determined that the trial could stop early.

“Within minutes of obtaining the information,” Malik informed his then-girlfriend Lauren Wood, who purchased 7,000 shares in Immunomedics, according to the DOJ. The information was then made public and the shares rose sharply. Wood later sold her shares and realized a gross profit of more than $213,000.

Immunomedics was acquired by Gilead in October 2020 for $21 billion.

Malik had maintained his innocence since being indicted in May 2022. He now faces a maximum sentence of 20 years in prison and a fine of up to $5 million for the charge, while two others are being dropped. He’s scheduled to be sentenced Sept. 18. According to a plea agreement, Malik’s actual sentence could be in the range of 10 to 16 months.

Wood, who was serving as head of corporate communications at Immunomedics at the time of the incident, was also arrested in the matter and pleaded guilty to securities fraud in June 2022. She is slated to be sentenced Dec. 18.