Ex-Pfizer employee charged with illegal trading based on unreleased Covid pill trial data

Federal authorities charged a former Pfizer employee and his close friend Thursday with illegally trading shares based on non-public trial results on the pharmaceutical company’s Covid antiviral pill Paxlovid.

The Justice Department and the Securities and Exchange Commission both announced respective insider trading charges against the former employee, Amit Dagar, and his friend, Atul Bhiwapurkar.

Dagar, who helped manage and analyze certain clinical trial data, and Bhiwapurkar “participated in an insider trading scheme to reap illicit profits from options trading based on inside information” about the then-unreleased Paxlovid results in November 2021, according to the DOJ.

The two individuals sold their Pfizer call options at “significant profits” totaling more than $350,000, the DOJ said.

“The charges in this case relate to the personal conduct of a former Pfizer employee in violation of the company’s policies,” a Pfizer spokesperson told CNBC. “Pfizer is cooperating with the government’s investigation.”

Dagar, 44, of Hillsborough, New Jersey, was arrested Thursday morning and charged with four counts of securities fraud, each of which carries a maximum sentence of 20 years in prison, the DOJ said. He was also charged with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.

Bhiwapurkar, 45, of Milpitas, California, was also arrested early Thursday and charged with two counts of securities fraud and one count of conspiracy to commit securities fraud, according to the DOJ.

Attorneys for the defendants didn’t immediately respond to requests for comment.

The DOJ announced the charges along with several other allegations of illegal trading, including charges related to the Trump media merger.