As a rule, principal investigators for clinical trials should not be trading in the stocks of companies whose drugs they are testing. But the feds allege that Dr. Edward Kosinski ignored this dictum and now faces charges of insider trading.
In two separate instances, Kosinski sold his shares in Regado Biosciences after receiving bad news about a clinical trial in which he was the principal investigator, according to a lawsuit filed on Thursday in federal court in Connecticut by the US Securities and Exchange Commission. In the first stock trade, he avoided $160,000 in losses, and in the second transaction he made more than $3,000 by exercising options.
The trades occurred in 2014, when Kosinski headed a trial testing the use of a drug for regulating clotting in patients undergoing coronary angioplasty. After he was given advance notice enrollment was being suspended because some patients experienced severe allergic reactions, he allegedly sold all 40,000 of his Regado shares the next day. He profited because Regado stock, not surprisingly, then dropped.