SEC Charges Ipsen Employee with Insider Trading in $247M Epizyme Deal

Cancer has become a significant focus in Ipsen's growth strategy, with the company's recent business moves highlighting its commitment to expanding its oncology portfolio and drug pipeline. However, an Ipsen employee, Dishant Gupta, has been charged with insider trading, allegedly profiting from stock transactions based on non-public information about Ipsen’s $247 million acquisition of a cancer drug developer.

The Securities and Exchange Commission (SEC) filed a complaint against Gupta, who has agreed to plead guilty. The penalty has not yet been decided, and the U.S. Attorney’s Office for the District of Massachusetts has also brought criminal charges against him.

Ipsen, headquartered in Paris with U.S. operations in Cambridge, Massachusetts, initiated discussions in early 2022 with Epizyme regarding the acquisition of its cancer drug, Tazverik. Tazverik received FDA approval in 2020 for treating follicular lymphoma. These discussions evolved into negotiations for the buyout of the entire company, culminating in the announcement of the acquisition on June 27, 2022.

Gupta, who lives in New Jersey and often worked from home, holds the position of director of data strategy and operations at Ipsen, which involves marketing and strategic pricing of products. The SEC alleges that Gupta used his position to gain insights into the market potential and strategy for Tazverik. In the months leading up to the acquisition announcement, Gupta conducted numerous internet searches related to the possible buyout of Epizyme.

The SEC complaint details that Gupta began purchasing Epizyme shares from April to June 2022, acquiring stock on 27 different days. Notably, between June 16 and June 24, 2022, Gupta bought approximately 200,000 shares, spending nearly $160,000.

The acquisition was publicly announced on June 27, just before the stock market opened in Europe. Gupta sold all his Epizyme shares by 9:30 am Eastern time, earning a profit of $260,078.27.

The SEC's case against Gupta, filed in the U.S. District Court for the District of Massachusetts, is case number 24-cv-12316. Gupta has entered a written agreement to plead guilty to one count of securities fraud, forfeiting his illegal gains and paying a civil fine. Additionally, he is barred from serving as an executive or director of any publicly traded company, pending court approval of the settlement terms.

Ipsen's oncology products are a major revenue driver, contributing over €2.3 billion to the company's €3.1 billion sales in 2023. The acquisition of Tazverik from Epizyme is one of several strategic moves Ipsen has made. The company also acquired Onivyde, a pancreatic cancer drug from Merrimack Pharmaceuticals, and has entered into deals for drugs still in development. In July, Ipsen secured global rights to a Phase 1-ready antibody drug conjugate (ADC) from Foreseen Biotechnology, following an April agreement for another ADC from Sutro Biopharma. Additionally, Ipsen has partnered with Marengo Therapeutics to develop T cell receptor therapies for cancer, underscoring its extensive interest in oncology.