Biotech employee arrested, accused by U.S. of insider trading

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By Nate Raymond

<span class="articleLocation”>A Merrimack Pharmaceuticals Inc
employee was arrested on Tuesday on charges that he engaged in
an insider trading scheme with a former employee of a rival
biopharmaceutical company.

Songjiang Wang, who Cambridge, Massachusetts-based Merrimack
has employed as director of statistical programming since 2011,
was charged in a criminal complaint filed in federal court in
Boston with conspiring to commit securities fraud.

The 52-year-old’s arrest came after federal prosecutors
brought related charges in June against Schultz Chan, who had
been the director of biostatistics at another Cambridge-based
company, Akebia Therapeutics Inc.

Wang, of Westford, Massachusetts, is scheduled to appear in
court later on Tuesday. A hearing for Chan, who has pleaded not
guilty, is also scheduled for then.

Lawyers for Wang and Chan did not immediately respond to
requests for comment.

Merrimack was not identified by name in the complaint, which
referred to it only as “Pharm Co. 1.” But a separate court
filing said Merrimack was Wang’s most recent employer, and
details in the complaint matched that of the company.

Representatives for Merrimack did not respond to requests
for comment.

According to the complaint, Wang provided Chan inside
information in 2013 and 2014, ahead of announcements by
Merrimack about positive results in three different drug
studies. This allowed Chan to place trades based on those tips.

Wang, in turn, tipped Chan in advance of positive clinical
study results for a new drug being developed by Akebia, which
allowed him to place trades ahead of the company’s announcement
in September 2015, the complaint said.

Based on that tip, Wang made $105,000 in illegal trading
profits, according to an earlier lawsuit against Chan by the
U.S. Securities and Exchange Commission.

That lawsuit referred to Wang, without using his name, as
friend of Chan’s who had previously loaned him $80,000.

The case is U.S. v. Wang, U.S. District Court, District of
Massachusetts, No. 17-mj-1005.

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