March 29, 2024

Columbia Professor Is Linked to Insider Trading Case

He was described only as “Doctor 1” in a Massachusetts insider-trading complaint against a hedge fund operator.

Doctor 1 talked to the money manager in June 2010 about an unpublished study of an obscure drug, according to the complaint filed by the state’s securities regulator. The hedge fund bought more than $800,000 in stock in Questcor, the company whose sole product was that drug, and saw its value soar.

It turns out that Doctor 1 is an assistant medical professor at Columbia and a kidney expert , whose name is Dr. Andrew S. Bomback. He was identified by a comparison of the veiled references in the Massachusetts filing with a press release from Questcor Pharmaceuticals, the California company selling the drug.

“I’m actually surprised you were able to identify me,” Dr. Bomback said in a phone call.

While confirming his involvement, though, he denied any wrongdoing, as did the hedge fund manager, James A. Silverman of Cambridge, Mass. The securities case focuses on Mr. Silverman.

The civil case, however, first brought against Mr. Silverman last March, has spawned a new set of regulations in Massachusetts that will take effect later this year.

William F. Galvin, the Massachusetts secretary of state and securities regulator, has proposed a change in that state’s regulation of interactions between experts like Dr. Bomback and securities traders who may be tempted to seek out and act on information that could be construed as confidential.

The changes, effective Dec. 1, would force Massachusetts’ regulated investment advisers to obtain disclosure of all the areas that a consultant in an expert network is prohibited from discussing before the investment advisers could talk to that consultant. Mr. Galvin, in an interview, said the rule would clarify what was illegal.

“The bigger issue here is there were loopholes being exploited by companies to get insider information and basically corrupting the marketplace,” Mr. Galvin said.

He said that states were playing a much larger, everyday role in regulations under the Dodd-Frank Wall Street Reform Act of 2010, even as a few prominent federal cases made headlines.

Dr. Bomback’s role was that of an academic researcher with connections. His findings, including remarkable success on his own patients, have helped a drug market balloon, even as he signed a $50,000-a-year consulting contract with the drug maker, records show, and took thousands of dollars from an intermediary, Guidepoint Global, an expert network, that put him in touch with money managers.

In one sense, his research was limited to a retrospective case series reported in a fairly obscure medical journal, Drug Design, Development and Therapy. But in another sense, it was vitally important for the company and its investors.

Dr. Bomback reviewed every known patient in the nation who had tried the drug by the end of 2009 for a debilitating kidney disease known as nephrotic syndrome.

There were only 21 such patients total, eight of them in Dr. Bomback’s own practice. Most had failed other treatment and pinned their hopes on a kidney transplant or a lifetime of dialysis.

The study found that 9 of 11 of the patients with a certain type of nephrotic syndrome responded well to treatment. In doing so, the study has helped transform the drug, called H.P. Acthar Gel, from the status of an orphan to that of a potential blockbuster.

Questcor told investors this month that the expensive, injectable drug could have $1 billion sales for the niche condition Dr. Bomback studied. The drug costs more than $23,000 a vial; Questcor, betting on its value, had raised the price from $1,650 a vial in 2007. The drug is also sold for ultrarare infant spasms and select multiple sclerosis patients.

Dr. Bomback and other Columbia researchers continue to analyze Acthar in a company-sponsored clinical trial. As for the $50,000-a-year consulting agreement he signed with Questcor in January 2010, Dr. Bomback said it was changed in April 2010 to $10,000 a year for five years “to comply with new rules adopted by Columbia University limiting consulting fees.”

The university’s policy was actually last changed in July 2009, said Douglas Levy, a spokesman. It generally prohibits faculty with consulting payments over $10,000 from researching that company’s products.

Mr. Levy declined to discuss Dr. Bomback’s actions in detail, saying any university inquiry would be conducted and resolved privately.

Dr. Bomback said his pay for talking to money managers in the Guidepoint expert network was small: just $3,541 since Jan. 1, 2010.

The Massachusetts complaint portrays a sharp turnaround for Mr. Silverman’s hedge fund after he began paying Guidepoint $80,000 a year for the right to interview two experts a week. Most of them were conducting confidential research for various drug makers, the complaint said. They were supposed to talk about other things — a policy Guidepoint informs them about but does not track to ensure compliance.

Mr. Silverman’s fund, Risk Reward Capital, had lost 16 percent of its value in 2007, but after joining Guidepoint in 2008, it gained 55 percent in 2009 and 52 percent in 2010, the complaint said. State authorities also accuse him of illegal trading in another company, Ariad Pharmaceuticals, with help from unidentified Guidepoint experts, which he also denies.

Article source: http://feeds.nytimes.com/click.phdo?i=352e3acc098b543a554f8ed67fbbf2bb

Study Links Smoking Drug to Cardiovascular Problems

The finding added to previous warnings about the pill’s connection to psychiatric problems and cardiovascular risks for people with a history of heart disease.

It posed a new challenge to a product that has been prescribed to 13 million people and had $755 million in sales last year.

Officials of Pfizer, the manufacturer of Chantix, and the Food and Drug Administration responded that they had been planning to conduct a joint analysis of clinical trials on whether Chantix posed heart risks, due next year.

“This would have raised a red flag for us if the flag hadn’t already been flying,” Dr. Celia Winchell, a team leader with the agency’s Center for Drug Evaluation and Research, said in an interview.

Pfizer, in a statement, said the analysis in the Canadian Medical Association Journal was based on too few heart or cardiovascular events to draw conclusions about the risks. The company said Chantix brought “immediate and substantial” health benefits to smokers who quit.

The senior author of the new report, Dr. Curt D. Furberg, a Wake Forest medical professor, said there were better ways to quit and called for removal of the drug from the market.

“It piles up,” he said. “I don’t see how the F.D.A. can leave Chantix on the market.”

The lead author, Dr. Sonal Singh, assistant professor of medicine at Johns Hopkins University, said the agency and Pfizer had failed to pursue signs of cardiovascular risk since Chantix was approved in 2006.

“The F.D.A. should have already put it on their warning label,” Dr. Singh said. “The risk is substantial, the risk is present in smokers without heart disease, and Pfizer knew about this for five years.”

Last month, the agency issued a safety notice about cardiovascular risk from Chantix use by people with a history of cardiovascular disease, based on a study of 700 people.

The new report is broader, analyzing 14 randomized clinical trials involving 8,200 patients, excluding those with cardiovascular disease so that it gives a better picture of which heart problems the drug could cause in otherwise healthy people trying to quit smoking.

The new study, known as a meta-analysis, compiled data from 14 random, blinded, placebo-controlled clinical trials that tracked cardiovascular outcomes. It found 52 out of 4,908 people taking Chantix had serious cardiovascular events, a rate of 1.06 percent, compared with 27 out of 3,308 people taking a placebo, a rate of 0.82 percent. While the absolute difference is only 0.24 percent, the weighted, relative difference is 72 percent.

“We have known for many years that Chantix is one of the most harmful prescription drugs on the U.S. market, based on the number of serious adverse effects reported to the F.D.A.,” Dr. Furberg said in a statement. “It causes loss of consciousness, visual disturbances, suicides, violence, depression and worsening of diabetes. To this list we now can add serious cardiovascular events.”

Dr. Furberg, who once directed clinical trials for the government and writes widely about drug safety, has been paid as an expert witness in cases against Pfizer. Dr. Singh and two other researchers said they had no conflicts of interest.

When combining studies of smokers with and without pre-existing disease, the study found that doctors could expect to get one extra cardiac event associated with Chantix for every 28 smokers they treated with the drug. The researchers also estimated one additional person would quit for every 10 treated with Chantix.

The benefit of Chantix was emphasized in a separate commentary in the journal by Dr. J. Taylor Hays of the Mayo Clinic in Rochester, Minn. He described the meta-analysis as “timely and important” but said it lacked overall size and standardization. Dr. Hays, who has been paid by Pfizer to study Chantix, said the benefits of quitting smoking outweighed the risks of the drug.

Chantix is selling well overseas. In Japan, for instance, some pharmacies ran out for a while recently, even as the drug failed to meet expectations in the United States because of health warnings and bad publicity.

Article source: http://feeds.nytimes.com/click.phdo?i=1729a233034b0a086ee9bd68b29a075c