A prominent UCLA cancer researcher may face investigation by the
Securities and Exchange Commission after he was accused last week
of selling confidential information about two potential new cancer
drugs to a group of Wall Street investors.
The accusation was part of a Seattle Times investigative report
published on Aug. 7, which named Dr. Robert Figlin, a kidney cancer
specialist at UCLA, as one of at least 26 cases uncovered by The
Times in which doctors had given investors “confidential and
critical details” about their drug research.
The SEC confirmed Tuesday that it would investigate the
practices described in The Times’ report. This announcement
came after the finance committee chairman, Sen. Charles Grassley,
R-Iowa, sent a letter to the SEC and the Department of Justice
asking it to review The Times’ findings.
“Selling drug secrets violates a trust that is fundamental
to the integrity of both scientific research and our financial
markets,” Grassley said in the letter.
Figlin said in both The Times’ report and in an interview
Friday that he had done nothing wrong.
“I was providing expert consultation,” Figlin said
Friday. “The only information that I provided was publicly
available information. I have no stock or financial interest in any
of the companies, nor am I in a position to have information that
would help someone decide what to do with trading stock.”
According to The Times, Figlin was recorded on July 18 holding a
paid conference call with a number of investors. During that call,
he allegedly disclosed detailed information about when Pfizer, a
large pharmaceutical corporation for which Figlin is a consultant,
would file for FDA approval for Sutent, a possible new drug for
kidney cancer.
Figlin also allegedly told investors that he was betting Sutent
would provide a survival benefit, or allow patients using it to
live longer. Knowing that a drug offers a survival benefit would
give investors better information as to whether they should buy or
sell that drug company’s stock.
But Figlin denied that he had provided actual information on
Sutent’s possible success.
“It was my hope that there would be a survival benefit,
because I’m a cancer doctor,” Figlin said. “I in
no way said that I knew that there was a survival benefit, and just
to be clear, there is no information available anywhere that says
that there is a survival benefit.”
In addition to the SEC probe, UCLA will be mounting its own
investigation into its doctors’ research practices.
Dr. Gerald Levey, dean of the David Geffen School of Medicine,
said in an e-mail statement Friday that he had asked a small group
of faculty members to “undertake a fact-finding process,
review applicable university policies and make recommendations, if
any, regarding these consulting activities.”
Figlin said he was aware of the investigation and would
cooperate with whatever Levey asked him to do.
“We want to make sure that UCLA is protected in every way
from these kinds of allegations in the future,” Figlin
said.
Investing companies that trade in biotech stock have a strong
financial interest in gathering information on potential drugs.
According to The Times, the success or failure of a single drug can
dramatically impact a biotech company’s stock.
If investors find out that a particular drug is expected to fail
before the test results are made public, they can sell their stock
in the company before the stock value plummets. Trading based on
such “insider” information is illegal, but according to
The Times, the practice is becoming increasingly common.
“Everybody does this. … It’s now common
practice,” Ben McGraw, a former Wall Street analyst and the
chief executive of a California biotech company, told The
Times.