Jan 09, 2017 Market Comments Off on Former Academia Sinica head indicted in cancer drug case (update)
Former Academia Sinica President Wong Chi-huey (???) has been indicted for corruption and misconduct as a public servant in a case involving the development of a cancer drug by biotech firm OBI Pharma Inc. (??), the Shilin District Prosecutors' Office announced Monday.
Prosecutors believe Wong profited from the 3 million OBI shares he received from OBI Chairman Michael Chang (???) in 2012, an act they say was illegal under the Anti-Corruption Act because Wong was a public servant at a government-funded institution.
According to prosecutors, Wong received 3 million OBI shares from Chang in 2012 that were priced at NT$31 (US$0.97) per share when the company was listed on the emerging stock market. The following year, the company was listed on the over-the-counter market at NT$310 per share.
The OBI Pharma scandal erupted in late February 2016 when its share price plunged after the company announced on Feb. 21 that the company's new cancer drug had not met expectations in its phase 2/3 clinical trial.
Wong defended the drug after the trial results were announced in his capacity as a biochemist, but when it was later learned that his daughter had shares in the company, there was the appearance of a conflict of interest, and the case snowballed from there.
Responding to the indictment, Wong issued a statement Monday evening saying that he was innocent of any wrongdoing and would work through the judicial process to clear his name.
Wong said as founder of Optimer Pharmaceuticals, the parent company of OBI Pharma, it was natural for him to possess OBI Pharma shares.
He also stressed that he purchased the shares with his own funds and that the purchase had nothing to do with Academia Sinica and during his capacity as the institution's director.
OBI Pharma's Chang, along with General Manager Amy Huang (???), Vice President Hsu Yo-gung (???), research and development director Yu Cheng-te (???), and administration division manager Liao Tsung-chih (???) have been indicted for insider trading, prosecutors said.
The prosecutors said the executives were already clear after an "experts meeting" on August 28, 2015 that the results of the clinical trial would not be successful and deliberately sold off shares of the company between September 2015 and January 2016.
They said Chang alone made NT$24.2 million in ill-gotten gains from dumping shares before the problem with the clinical trial was revealed publicly in February 2016.
The stock plunged from a close of NT$681 per share on Feb. 18, 2016 to NT$427 seven sessions later. It has since fallen as low as NT$240 in December but close back above NT$300 at NT$302 on Monday.
The investigation into the OBI case began last April, when Wong was summoned for questioning along with 10 others, including Chang, as a potential defendant in the case.
Prosecutors confirmed that Wong would be indicted Monday morning after a nearly year-long investigation.
Source: Focus Taiwan News Channel
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