Insider trading in pharma stocks common, study finds

US RESEARCH has pointed to likely “insider trading” in drug company stocks, as prices were seen to jump well in advance of the release of positive trial data.
In the 120 trading days before a drug company would release positive phase III trial data, mean stock prices were seen to increase 13.7%.
This was compared to a 0.7% stock price decline over 120 days ahead of the first public announcement of negative trial results.
The analysis took in the release of 23 positive and 36 negative late-stage trial results for experimental anti-cancer drugs, as announced by pharmaceutical companies listed on the US stock exchange from 2000 to 2009.
“One explanation for the observed trends is insider trading,” the authors said.
“[That is, trading] in which individuals make stock trades based on information before results are public or by providing non-public information to