Wyeth Sales Managers Settle With SEC
TRENTON, N.J. (AP) _ Two Wyeth Inc. district sales managers have settled federal insider trading charges over company stock they sold on the eve of the release a medical study that sent the pharmaceutical company’s stock tumbling.
Mark Fisch and Edward Gregory each agreed to pay the amount they avoided losing by selling shares the day before Wyeth’s stock plunged, according to the federal Securities and Exchange Commission. The two men neither admitted nor denied SEC’s allegations.
``This is a situation where these individuals received confidential information as a result of their employment and unfairly tried to take advantage of that information,″ David Rosenfeld, assistant director of the SEC’s northeast regional office in Manhattan, said Thursday.
Rosenfeld said a consent judgment was filed at the U.S. District Court in Newark on Wednesday and the two men likely will be ordered by the court to pay within two weeks the amount they avoid losing, a civil penalty of the same amount and interest since last July.
``We have no comment,″ Doug Petkus, a spokesman for Madison, N.J.-based Wyeth, said Thursday
According to an SEC release, Fisch and Gregory each sold their entire holdings of Wyeth stock on July 8, 2002. That was the day before news broke that a study funded by the National Institutes of Health, the Women’s Health Initiative study, had found unexpectedly high risks of heart attack, stroke and breast cancer among women taking one of the company’s hormone replacement drugs, called Prempro.
Sales of Prempro and a second Wyeth hormone replacement drug, Premarin, have since nosedived as droves of menopausal women apparently decided the risks were not worth the relief the drugs can bring from symptoms such as hot flashes, night sweats and vaginal dryness.
Fisch and Gregory were told about the results of the study during a conference call with their supervisor on the morning of July 8, 2002, according to the SEC.
``Despite being told during the call and by e-mail that the information they were receiving was confidential and would not be made public until the following day, Fisch and Gregory sold their entire holdings of Wyeth stock shortly after learning the negative news,″ the release states.
Fisch sold 3,000 shares at $49 each for a total of $147,000, while Gregory sold 1,000 shares at $49.16 each for a total of $49,160. When the study findings were made public on July 9, Wyeth stock fell from an opening price of $45 to close at $37.30. Fisch and Gregory avoided losses of $35,100 and $11,860, respectively, by trading in advance of the news, SEC said. They will pay SEC that amount, plus an equal civil penalty.
Fisch, 70, of Livingston, N.J., supervises field sales representatives in parts of New Jersey, according to the SEC. Gregory, 68, of Clifton Park, N.Y., supervises field sales reps in New Jersey, New York and parts of New England.
When it reported second-quarter results last week, Wyeth said sales of the two drugs for the quarter fell to $277 million from $447 million a year earlier. Although the company recently launched low-dose versions of each pill, officials said sales for the full year are unlikely to reach Wyeth’s target of about $1.5 billion. That news again pushed the stock down.
The drugs had been the company’s biggest sellers, and Premarin once was the most-prescribed drug in this country.
Wyeth shares were down 37 cents to close at $45.58 on the New York Stock Exchange.
On the Net: http://www.wyeth.com