Two biotech CEOs charged with defrauding investors over investigational HIV drug
Two US biotech CEOs have been highlighted for their roles in a conspiracy to defraud investors in CytoDyn, a company developing an investigational drug to treat human immunodeficiency virus (HIV).
Both Nader Pourhassen and Kazem Kazempour are alleged to have conspired to defraud investors through “false and misleading representations” relating to CytoDyn’s development of HIV-fighting drug leronlimab. Pourhassen was CytoDyn’s president and CEO at the time of
the alleged fraud, and Kazempour is the co-founder, president and CEO of Amarex Clinical Research, who managed CytoDyn’s clinical trials for leronlimab.
Evidence shows that the two CEOs allegedly deceived investors about the status of CytoDyn’s submissions to the FDA to artificially inflate the price of CytoDyn’s stock. Documents also show that, in April 2020, CytoDyn and Amarex repeatedly missed publicised timelines, and that Pourhassen allegedly directed Amarex to submit the company’s incomplete biologics license application (BLA) so CytoDyn could announce to investors that it had been submitted. However, both CEOs knew that the FDA would refuse an incomplete BLA.
There are also allegations that Pourhassen made false and misleading claims about CytoDyn’s investigation and development of leronlimab as a possible treatment for COVID-19, despite clinical studies failing to achieve necessary results for FDA approval.
“Financial crimes like securities fraud may not be violent, but they certainly are not victimless. The two individuals charged today capitalised on the hopes of investors and the public in supporting new treatments for ailments that affect people and their families. This indictment sends a message to all sophisticated white-collar criminals that no-one is beyond the reach of the FBI and our law enforcement partners and we do not tolerate the greedy intentions of those in such trusted positions,” stated Special Agent in Charge Thomas Sobocinski of the FBI Baltimore Field Office.