Immunomedics CFO girlfriend admits her role in insider trading scheme

The former head of corporate communications for a biopharmaceutical company admitted her role in an insider trading scheme.

Lauren S. Wood, 33, of Washington, D.C., pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging her with securities fraud.

Lauren Wood

Stemming from the same alleged conduct, Usama Malik, also of Washington, D.C., was previously charged in a three-count indictment with insider trading, securities fraud, and securities fraud conspiracy.

According to U.S. Attorney Philip R. Sellinger, documents filed in this case and statements made in court, Malik was the chief financial officer of a New Jersey-based biopharmaceutical company listed on the NASDAQ Stock Exchange from 2018 through October 2020.

The former CFO spent nearly four years at Immunomedics, helping steer the company to a $21 billion buyout by Gilead Sciences, Inc. back in 2020, is accused of sharing insider information with his then-girlfriend and a number of relatives.

According to her LinkedIn profile, Wood was senior director and head of Patient Experience at Immunomedics for one year, between 2018 and 2019.

On April 6, 2020, the company publicly announced for the first time that its breast cancer drug – an antibody-based drug designed to treat certain breast cancer patients who had very limited treatment options beyond chemotherapy – had proven effective in pre-market clinical trials.

In October 2020, another biopharmaceutical company—Gilead—acquired Immunomedics for $88.00 per share in cash, or approximately $21 billion.

The transaction was unanimously approved by both the Gilead and Immunomedics boards of directors

Malik was among the first, and one of the few, employees who received the material non-public information about the breast cancer drug before the public announcement.

Within minutes of obtaining that information, Malik passed it along to Wood, who lived with Malik at the time and was formerly employed by the same company.

Before April 6, 2020, and within hours of receiving the insider information from Malik, Wood placed an order for approximately 7,000 shares of the company’s stock, despite the fact that during the same time period the company’s stock was downgraded by financial experts.

Immunomedics received a double downgrade to sell from an analyst at Goldman Sachs, who cited a report by the Food and Drug Administration that found new quality control issues at the company’s manufacturing site.

Shares of the Morris Plains, New Jersey-based company declined 12.35% to $9.34.

After the company announced that its cancer drug had proven effective in pre-market clinical trials, its stock price increased.

After selling her shares, Wood more than doubled her investment, realizing gross profits of $213,618.

The securities fraud charge to which Wood pleaded guilty carries a potential penalty of 20 years in prison and a $5 million fine.

Wood’s sentencing is scheduled for Nov. 21, 2022. Sellinger said the charges and allegations against Malik are merely accusations, and he is presumed innocent unless and until proven guilty.

The U.S. Securities and Exchange Commission (SEC) filed a civil complaint on Dec. 1, 2021 based on the same conduct.

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