Senior executives at Vertex Pharmaceuticals made millions of dollars each by selling company stock in the days after the Cambridge-based pharmaceutical reported promising clinical trial data on an experimental drug for cystic fibrosis. And then weeks after they cashed in, the company said, oops, we overstated the trial’s interim findings. They weren’t quite as good as initially reported.
The whole sordid tale is in The Boston Globe today, including details on which five top executives of the company benefited from the stock sales and the degree to which Vertex overstated its initial findings on May 7. According to The Globe, chief commercial officer Nancy Wysenski walked away with $8.8 million and Peter Mueller, the executive vice president of global research and development (who no doubt oversaw the trial) with $3.4 million. Even its founder, Joshua Boger, who is still a company director, got in on the action.
Vertex officials blamed the mistake on a “misinterpretation between Vertex and our outside statistical vendor” who analyzed the clinical trial data, the Globe reports. But they would not identify the outside vendor, a contract research organization.
Right. Does anyone besides myself smell a rat? This strikes me as a too convenient explanation for a “mistake” that hugely benefited Vertex’s top management. And it makes me wonder why drug companies are allowed to release preliminary findings to the public at all before the results are vetted by peer-reviewed journals. This strikes me a recipe for stock trading abuse.
I sure hope the Securities and Exchange Commission is all over these trades. Left holding the bag are not only the investors who bought shares in the company when its stock surged on the erroneous news, but all the families of cystic fibrosis patients whose hopes were falsely and cruelly raised.