(Updates Tuesday story with response from analyst)
By Sharon Begley
Dec 3 A former hedge-fund analyst who argued
that Dendreon Corp's therapeutic vaccine for prostate
cancer may hasten the death of patients has reached a settlement
with U.S. securities regulators over failure to disclose her
financial interests in the company.
Marie Huber, who trained as a biochemist at Cambridge
University in England and worked at an unnamed New York hedge
fund from 2007 to 2011, neither admitted nor denied the
Securities and Exchange Commission's findings, according to the
agency. Huber said she stood by her analysis of the vaccine,
The SEC settlement bars her from the securities industry for
six months and requires her to pay a $25,000 fine.
The SEC's administrative finding, dated last week, concluded
that, for a short period of time, Huber had a significant
financial stake in the perception of Dendreon.
From June 17 to July 12, 2010, it found, she purchased
$236,000 worth of options in Seattle-based Dendreon, essentially
betting that its stock price would drop. She also purchased such
options in her mother's account. In addition, the SEC said,
Huber shared her negative analysis of Provenge with friends and
family members who traded in Dendreon stock.
In a paper published in the Journal of the National Cancer
Institute in February 2012, Huber and three co-authors reported
that analysis. In documents JNCI requires authors to sign, she
declared no financial conflicts of interest, a claim she
repeated to Reuters for a story about the paper later that year
and which the SEC timeline confirms. For a link to the story,
Huber said at the time that neither she nor anyone she is
connected to stands to benefit financially from her analysis,
and that she was scrutinizing the Provenge clinical trial
because she wanted to help "vulnerable and desperate patients."
In a statement released by her attorney on Tuesday night,
Huber said, "I stand by the rigor of my scientific analysis and
I shall continue to follow-up on the concerns that I expressed
with regard to Provenge" in the 2012 JNCI paper.
"My primary motivation has always been the well-being of
patients and the safety and effectiveness of this treatment,"
Huber's statement said. "The accuracy of my research and
conclusions are not an issue in the SEC settlement."
The SEC's finding dates back to the spring of 2010, soon
after the Food and Drug Administration approved Provenge. Huber
had prepared a report on the vaccine for her hedge fund and
shared it with an analyst at another fund, after which she
purchased the Dendreon options.
She asked her employer to submit the report to a federal
agency that had solicited public comment on whether the Medicare
program for the elderly should cover Provenge. When the hedge
fund did not, according to the SEC account, Huber and the second
analyst emailed the report in July 2010 to some 450 people, from
a Gmail account in the name of Jonathan White and signed by "A
concerned physician, scientist and citizen."
The email said, "We must stand up against those that wish to
use the power of the sword to threaten legitimate scientific
discourse and concern for patient safety." Subsequently, two
cancer specialists and an immunologist co-authored the JNCI
paper with Huber.
The day after the mass email, Dendreon shares briefly fell
7.2 percent on heavy volume and Huber sold some of her options.
She "still suffered significant trading losses because most of
her positions remained unsold or unexercised since they were so
far out of the money," the SEC found.
The agency concluded that the signature on the emails was a
false statement and therefore a violation of the Securities Act.
The fact that the authors of the email were hedge fund analysts
who held about-to-expire Dendreon options "were material," the
SEC said, "because investors would have considered the identity,
motive, and financial self-interest" of Huber and the second
analyst "important to assessing the report and any decision to
buy or sell the securities of Dendreon."
(Editing by Michele Gershberg, Bernard Orr and Alden Bentley)