Letter comes as CEOs and top executives continue making millions of dollars dumping shares in stocks buoyed by federal vaccine investments
REPORT: Drug Company Insider Stock Dumping Surged as Taxpayer-Funded Vaccines Moved Toward Approval; $105 Million in New Insider Profits in Less Than Three Months
26 drug company insiders made fortunes averaging $9.7 million each in just six months as company announcements buoyed stock prices
**Read the full letter here**
Washington, DC — Today, Accountable Pharma released letters it sent to the CEOs of Pfizer, Moderna, Eli Lilly and Company, Novavax and Emergent BioSolutions calling for the release of the 10b5 automatic trading plans that have been used by executives and directors to make millions of dollars dumping company stock. Accountable Pharma also called for a freeze on all stock sales until the SEC can complete an investigation and has an opportunity to release updated guidance regarding automatic trading plans for companies receiving taxpayer funding and advance purchase guarantees.
KEY POINTS FROM THE LETTER
- “We called for an investigation following the May 12, 2020 announcement that Moderna had received fast track designation for its mRNA vaccine, the subsequent increase in Moderna’s share price, and the well-timed trades by top executives who earned millions in profits from exercising stock options and selling Moderna shares immediately thereafter. We have not received any response regarding the state of the investigation, if one was ever launched.”
- “These examples, and other egregious stock profiteering by drug company executives, are almost certainly what motivated SEC Chairman Jay Clayton to take the fairly unprecedented step on November 17, 2020, of calling on drug companies to enact a “cooling off period” on their insider stock sale plans and make other changes to avoid potential insider trading and make sure companies are acting with ‘transparency and rigorous governance.’”
- “We have scant information on the 10b5-1 trading plans of drug company executives – for example, while some include the date they were amended, others omit even that basic detail – and the public has a right to the full details of trading plans. Because while it’s unseemly enough for drug company executives to be making massive personal fortunes dumping their stocks after pumping share prices up with announcements that would have never been possible without taxpayer investments, it would be far worse – and very likely criminal – if it turns out that automatic stock sale plans were adjusted to maximize profits based on information that the public didn’t have access to.”
Last month, Accountable Pharma released a new report outlining the more than $250 million in insider stock sales by executives and directors at five major drug companies producing vaccines with taxpayer support, including $105 million in new profits from insider sales between September and mid-November.
CNN: Pfizer and Moderna could score $32 billion in COVID-19 vaccine sales in 2021 alone: The imminent authorization of Pfizer’s Covid-19 vaccine in the United States is a momentous occasion for science, the economy and humanity. The milestone is also a major moneymaker for the companies that developed the vaccines. Wall Street analysts are projecting Pfizer and Moderna will generate $32 billion in Covid-19 vaccine revenue — next year alone…“It is absolutely wrong for drug companies like Pfizer and Moderna to profiteer, and for their executives to make egregious personal fortunes, off of Covid-19 vaccines that have been so heavily subsidized and supported by American taxpayers,” said Eli Zupnick, a spokesman for Accountable.US, a progressive watchdog and patient advocacy group. [CNN, 12/11/20]
LA Times: Good vaccine news and a flurry of stock sales by executives. There’s a pattern, study finds: As they raced to develop vaccines against COVID-19, executives at some pharmaceutical companies collected huge windfalls by selling stock around the time their companies announced positive news about the vaccines..The Washington, D.C.-based progressive watchdog group Accountable has also called on the SEC to investigate the Pfizer and Moderna trades. [LA Times, 12/7/20]
CBS: Watchdog urges SEC to investigate vaccine maker Moderna: An anti-corruption watchdog group is urging the U.S. Securities and Exchange Commission to investigate top executives at Moderna, the biotech firm developing a promising coronavirus vaccine, for allegedly manipulating the stock market. “This misconduct was particularly egregious because it involved not only financial fraud and manipulation of the financial markets, but also because it exploited widespread fears surrounding the ongoing COVID-19 pandemic,” wrote Kyle Herrig, who heads Accountable.US, in a letter to the SEC. “I strongly urge the SEC to investigate these matters.” [CBS, 6/3/20]
Reuters: Exclusive: Novavax executives could get big payday even if vaccine fails: One of the leading U.S. firms developing a coronavirus vaccine, Novavax Inc NVAX.O, has awarded executives stock options that could pay out tens of millions of dollars even if its efforts fail…“Drug companies like Novavax are getting billions of dollars from taxpayers to develop a COVID-19 vaccine, so it’s certainly concerning to see their executives get massive payouts before we know if the vaccine actually works,” said Eli Zupnick, a spokesman for consumer watchdog Patients Over Pharma. [Reuters, 7/22/20]
CBS: Moderna executives hiked their stock sales after announcing positive vaccine trial: Moderna CEO Stéphane Bancel more than tripled the number of his company shares to be sold through an executive stock plan that was changed just days after the biotech in May announced positive early results for its coronavirus vaccine. …the fact that the plans were changed during the pandemic as news was emerging about the company’s closely watched coronavirus vaccine raises new questions about how Moderna executives have pocketed millions of dollars in recent months. “Once again, drug company executives have been caught playing games with their stock options,” Kyle Herrig, who heads the government watchdog group Accountable.US, said in an email to CBS MoneyWatch.The group last month urged the SEC to investigate top executives at Moderna for allegedly manipulating the stock market. “The SEC needs to investigate these stock-plan changes,” Herrig said. [CBS, 7/21/20]
Salon: Pharma execs dumped millions in stock for huge profits after getting pandemic contracts: Pharmaceutical executives continued to dump millions of dollars in stock in August despite criticism that they were profiting from big taxpayer-funded contracts awarded amid the coronavirus pandemic. Stock prices have soared for pharmaceutical companies like Moderna, which is developing a leading vaccine candidate, in no small part thanks to contracts awarded by the Trump administration. The top five executives at Moderna sold more than $89 million in stock in the first five months of the year, with about three times as many stock transactions as in all of 2019, according to Stat News….”It certainly doesn’t inspire much confidence to see drug company executives feverishly dumping their stock options and cashing out fortunes for themselves after stock prices were inflated by the billions of dollars the Trump administration shoveled into drug company coffers,” Eli Zupnick, a spokesman for the progressive watchdog group Accountable Pharma, told Salon. [Salon, 8/27/20]