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Ex-Transkaryotic Chief Pays $1.2 Million in SEC Suit (Update1)
By David Scheer
July 10 (Bloomberg) -- Richard Selden, former chief executive officer of Transkaryotic Therapies Inc., agreed to pay almost $1.2 million to settle U.S. claims he withheld negative information about the company's Replagal drug from 2000 to 2002.
The Securities and Exchange Commission's 2005 civil lawsuit accused Selden, 49, of making positive statements to investors about Replagal's chance of winning U.S. approval, without disclosing the Food and Drug Administration said it flunked a trial and recommended more testing. He didn't admit or deny wrongdoing in settling, the SEC said in a statement today.
``Investors in biotech companies rely heavily on information the companies provide about their products in development,'' said David Bergers, the SEC's regional director in Boston. Companies must be truthful in ``every piece of information they provide to the public.''
A founder of the company, Selden allegedly avoided losses by selling 90,000 shares from May 2001 through February 2002, the SEC said in its complaint. The stock plunged 62 percent the day after the FDA information became public in October 2002, the regulator said.
Selden, who stepped down in 2003, was the only defendant to face federal claims after the SEC said in 2005 it wouldn't pursue sanctions against the company. Shire Ltd., the U.K.'s third-biggest drugmaker, purchased Cambridge, Massachusetts- based Transkaryotic that same year.
Thomas Dougherty, an attorney for Selden at Skadden, Arps, Slate, Meagher & Flom LLP in Boston, didn't immediately return a phone call seeking comment. U.S.-based spokesmen for Shire didn't immediately respond to phone calls seeking comment.
Replagal had been proposed as a treatment for Fabry's Disease, a painful genetic disorder that increases risk of stroke, heart attack and renal failure.
Transkaryotic said in 2004 it dropped efforts to win approval for Replagal in the U.S. after the FDA said the company would have to prove the treatment works better than a drug by Genzyme Corp.
To contact the reporter on this story: David Scheer in New York at dscheer@bloomberg.net.
Last Updated: July 10, 2008 16:51 EDT
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