By Peter Loftus
Federal authorities arrested a Bristol-Myers Squibb Co. (BMY)
executive Thursday on charges that he used inside information about
the drug maker's acquisition targets to make more than $300,000 in
illicit profits from stock-option trading.
The U.S. Attorney's Office in New Jersey charged Robert
Ramnarine, the drug maker's assistant treasurer for capital
markets, with three counts of insider trading.
Bristol-Myers issued a statement Thursday saying Mr. Ramnarine
has been placed on administrative leave effective immediately.
"Bristol-Myers Squibb has clear and strict policies prohibiting
trading on material non-public information and is cooperating with
the government's investigation," the company said.
Mr. Ramnarine, of East Brunswick, N.J., allegedly purchased
options in three companies that Bristol was targeting: ZymoGenetics
Inc., Pharmasset Inc. and Amylin Pharmaceuticals Inc. (AMLN).
Bristol-Myers purchased ZymoGenetics for $829 million in 2010
and agreed in June to acquire Amylin for $5.3 billion. Gilead
Sciences Inc. (GILD) acquired Pharmasset for $11 billion earlier
this year.
Mr. Ramnarine served as director and executive director of
pensions and savings investments at Bristol-Myers from 2008 until
July 2012, when he was named to assistant treasurer of capital
markets, according to a criminal complaint filed against Mr.
Ramnarine in U.S. District Court in New Jersey.
The complaint said Mr. Ramnarine was involved in evaluating
potential Bristol-Myers acquisition targets in those roles, and had
a duty not to use material, non-public information for his personal
benefit.
According to the complaint, Bristol-Myers began negotiating with
ZymoGenetics about a deal in May 2010, and announced an agreement
in September 2010. Before the public announcement, Mr. Ramnarine
purchased ZymoGenetics call options, which he sold after the
announcement for a profit of $30,551, according to the
complaint.
Bristol-Myers also explored a potential acquisition of
Pharmasset in October and November of 2011 before withdrawing from
discussions, which cleared the way for Gilead's acquisition,
according to the complaint.
Before the November announcement of the Gilead purchase of
Pharmasset, Mr. Ramnarine purchased Pharmasset call options that
eventually netted him about $225,026 in illicit profits, the
complaint said.
According to the complaint, Bristol-Myers made a preliminary
offer to acquire Amylin for $25 to $27 per share in May, ultimately
agreeing to pay $31 per share in June. Before the public
announcement, Mr. Ramnarine purchased Amylin options that resulted
in profits of $55,784, according to the complaint.
Mr. Ramnarine is in custody and scheduled to make an initial
court appearance in federal court in Newark, N.J., Thursday
afternoon.
A call to a phone listing for a Robert Ramnarine of East
Brunswick, N.J., wasn't immediately returned.
Write to Peter Loftus at peter.loftus@dowjones.com
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