A Yardley, Pennsylvania, man today admitted his role in an insider trading conspiracy that profited from yet-to-be public information concerning a pharmaceutical company that developed a drug to treat cancer, Acting U.S. Attorney William E. Fitzpatrick announced.
According to officials, Daniel Perez, 28, pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of securities fraud.
According to documents filed in the case and statements made in court:
Celator Pharmaceuticals Inc. (Celator) was a biopharmaceutical company headquartered in Ewing Township, that developed the drug Vyxeos to treat acute myeloid leukemia. In December 2012, Celator began Phase 3 clinical trials for Vyxeos, the results of which were highly confidential within the company. On March 14, 2016, Celator issued a press release announcing that the clinical trial results were positive.
Prior to the March 2016 announcement, Evan Kita, 27, of Yardley, who was a Celator employee from June 2013 through April 2016, learned that the Vyxeos clinical trials had produced positive results. Kita then shared that information with Perez and Richard Yu, 27, of Pennington, New Jersey, who both traded on the information.
Celator and Jazz Pharmaceuticals PLC (Jazz) – a publicly-traded company headquartered in Dublin, Ireland – on May 31, 2016, announced that they had entered an agreement for Jazz to purchase Celator in a transaction valued at approximately $1.5 billion. Jazz completed the acquisition of Celator in 2016, and now operates Celator as a wholly-owned subsidiary.
Officials said Kita learned of the potential acquisition prior to the public announcement from two close friends who still worked at Celator. Again, Kita shared the information with Perez and Richard Yu, who both traded on the information. Richard Yu, in turn, shared the information with his father, Chiang Yu, 55, of Pennington, who also traded on the information.
Perez admitted that the gain resulting from his insider trading scheme was more than $150,000, but less than $250,000.
The securities fraud charge carries a potential penalty of 20 years in prison and a $5 million fine. Kita, Richard Yu, and Chiang Yu pleaded guilty to their roles in the scheme on Aug. 31, 2017. Sentencing for all four defendants is currently set for April 18, 2017.