For Sanofi, snapping up Biogen spinout Bioverativ for $11.6 billion bolstered its rare disease franchise by adding hemophilia drugs Eloctate and Alprolix. But for a Swiss man, catching an early whiff of the deal has allegedly brought some illegal gains—and now, a civil and a criminal case in the U.S.
Roland Mathys, 32, is charged with insider trading before Sanofi’s Bioverativ acquisition, U.S. prosecutors unveiled Thursday. Using nonpublic information from a Sanofi executive vice president, the Swiss businessman allegedly bought 1,607 Bioverativ call options over a week in January 2018 and profited more than $4.7 million after the company’s stock soared at the official acquisition news later that month.
The indictment against Mathys carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, the U.S. attorney for the Southern District of New York, Geoffrey Berman, said in a statement. Separately, the U.S. Securities and Exchange Commission (SEC) has brought a parallel civil case against him.
According to the U.S. attorney, a Sanofi EVP told his son that the French pharma was acquiring Bioverativ. The son then disclosed the information to Mathys, who’s a close friend and former co-worker. Mathys immediately bought Bioverativ call options with strike prices between $65 to $75 apiece for a total of about $170,000, the suit claims.
Before that, Bioverativ’s shares had never closed at or above $64.12 since the company had started trading on Nasdaq, the suit notes. The final price Sanofi was offering? $105 per share, as the pair unveiled on Jan. 22.
The prosecutors didn’t name the Sanofi executive or his son as defendants in the suit. According to the now-disclosed indictment, they are both citizens of Switzerland and Italy.
It’s not yet clear whether Sanofi has been aware of the situation or has taken any action, given that the SEC moved to freeze Mathys’ proceeds in February of last year. The company didn’t immediately reply to a FiercePharma request for comment.
The entire Sanofi C-suite has gone through a dramatic makeover in the past year or so, and it will soon welcome a new CEO in former Novartis pharma chief Paul Hudson to replace Olivier Brandicourt. But an examination of the company’s exec roster did turn up only one name that at least matches the citizenship description.
That person is Roberto Pucci, Sanofi’s former EVP and head of human resources. The timing of his departure also matches up. Last July, Sanofi announced Pucci’s retirement from the company at the age of 54 after more than nine years of service with the company. At that time, Brandicourt praised him as “an excellent partner in our journey to reshape the organization to align with Sanofi’s evolving business ambitions and a great coach to our team.”
What’s more, in the unnamed exec’s conversation with his son, i.e., Mathys’ friend, he “spoke of how busy he expected to be in the coming weeks as a result” of the buy, according to the SEC complaint. An HR chief would also presumably be busy as two companies merge and integrate.
In a declaration Mathys made at the request of his handler at Credit Suisse on Jan. 26, he stated that the Bioverativ transactions were made “only on publicly available information and/or personal market analysis,” and that he was surprised by the success, the U.S. attorney said. But later, he acknowledged the insider trading to the friend.
“[T]he friend told Mathys that not only was Mathys in trouble for his trades, but that the friend and his father, the Sanofi insider, could also be in trouble because of Mathys’ trading in Bioverativ,” the SEC said in its complaint. “Mathys did not deny the SEC’s allegations, and did not offer alternative reasons for his trades, but instead apologized to the friend for creating trouble for the friend and the Sanofi insider.”