The former vice president of a Carmel Valley pharmaceutical company pleaded guilty Friday to a federal securities fraud count.
George Demos, 64, formerly of Acadia Pharmaceuticals Inc., admitted to insider trading for selling more than 60,000 Acadia shares just before news broke regarding an issue with one of the company’s products, according to the U.S. Attorney’s Office.
Prosecutors say the company had sought permission to expand the treatment parameters for Pimavanserin, sold under the brand name Nuplazid, meant for patients experiencing psychosis related to Parkinson’s disease. Acadia wanted to add treatment of dementia-related psychosis to the medication label.
The company had applied for FDA approval for the change, but when Demos learned those discussions had hit a roadblock, he sold his shares for over $2.8 million.
Less than two hours later, the company issued a press release regarding the FDA issues. The stock dropped 45% the next day. Demos avoided a $1.3 million loss by selling when he did, the U.S. Attorney’s Office said.
Demos is set to be sentenced May 30. As part of his plea agreement, he agreed to forfeit the funds that he originally avoided losing. He faces up to 20 years in prison.
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