An executive at Swiss drugmaker Novartis sold SFr925,400 worth of shares 18 days before the US Food and Drug Administration said it was investigating data manipulation on tests for the world’s most expensive drug, Zolgensma.
The US regulator warned earlier this month that Novartis was facing possible civil or criminal charges over manipulated data in early-stage testing of the drug on animals, sending shares down 3 per cent that day. The FDA stressed that trials in humans showed that Zolgensma was safe enough for approval, and did not recommend pulling it from the market.
The transaction, worth about $944,000, was executed on July 19 by an unnamed individual, according to a regulatory filing at the Swiss stock exchange. The filing says it was carried out by an “executive member of the board of directors” or a “member of the executive committee”. Other filings for similar transactions do not list the identities of those involved. Swiss law requires only the ties linking individuals to companies, but not the names, to be disclosed.
Novartis said the share sale was not related to Zolgensma. “As is usual in such cases, the transaction was thoroughly checked beforehand and then approved accordingly,” it said on Monday. “The person in question was not in possession of relevant material information.”
The company is facing an escalating backlash in the US amid allegations that it tampered with data that formed part of the approval package for Zolgensma, a gene therapy to treat spinal muscular atrophy that sells for $2.15m.
News of the share sale comes a week after the company disclosed it had put two senior scientists on administrative leave more than a month before it told the US agency about the botched data, which was collated at AveXis, a gene therapy outfit the Basel pharmaceutical group bought last year for $8.7bn.
Republican and Democratic senators have attacked Novartis over the data manipulation and called on the FDA to censure the drugmaker over its handling of the problem. The company waited until it had completed an internal investigation before it told the regulator, a month after the drug had been approved in May.
The FDA conducted an on-site inspection at Novartis’s laboratories in August, which was likely to have been triggered by the company’s disclosure of the irregularities in late June. The regulator took the unusual step of sending the drugmaker a letter listing its concerns — known as a Form 483 — close to when it made the probe public, Vas Narasimhan, the company’s chief executive, said in a call with analysts.
Novartis has until the end of this week to respond to the letter, a person briefed on the matter said. Executives have said they will respond robustly.
The issue marks the first big test for Dr Narasimhan, who became chief executive last year.
After it was disclosed that his predecessor, Joseph Jimenez, paid a company owned by President Donald Trump’s former personal lawyer, Michael Cohen, more than $1m for “advice”, Dr Narasimhan refocused the company on higher-value drugs, while promising greater transparency and accountability in its practices.
Novartis shares, which reached historic highs in July, boosted by upgraded quarter-on-quarter guidance, were flat on Monday.
This article has been amended since original publication to clarify the data tampering allegations
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