George Demos, a former vice president at Acadia Pharmaceuticals Inc., has admitted to insider trading in federal court. Demos pleaded guilty to selling 60,000 company shares based on nonpublic information about the labeling process for a prescription drug with the Food and Drug Administration (FDA), thereby avoiding a $1.3 million loss.
Demos held the position of Vice President of Drug Safety and Pharmacovigilance at Acadia, where he was part of the drug label team. He acknowledged that he used his access to material information regarding Acadia's drug approval and labeling process with the FDA to sell his shares just two hours before negative news about the labeling process became public.
In 2020, Demos learned that Acadia had applied for FDA approval to expand the label for their product Nuplazid, intended for treating dementia-related psychosis. This expansion was expected to significantly increase revenue by broadening the patient base. However, in March 2021, Demos discovered that discussions with the FDA had stalled due to issues with the label. Acting on this information, he sold over 60,000 shares for $2,833,856.15 shortly before Acadia announced deficiencies in its application.
By selling his stock at $46.61 per share before a subsequent drop to $25.02 following the press release, Demos avoided a substantial financial loss totaling $1,313,263. As part of his plea agreement, he has agreed to forfeit this amount.
Demos is set to be sentenced on May 30, 2025, by U.S. District Judge Robert Huie. The case is being prosecuted by Assistant U.S. Attorney Janaki G. Chopra.
The charges against Demos include securities fraud under 15 U.S.C. § 78j(b), 78ff; 17 CFR § 240.10b-5, which carries a maximum penalty of twenty years in prison and a fine of $5 million or twice the gross gain or loss.
The Federal Bureau of Investigation conducted the investigation into this case.
