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Big Pharma VP Dumps Stock BEFORE FDA Bad News, Dodges $1.3M Loss!

  
March 10, 2025


  
  

    

      
      

    

  




  



        


SEC v. George N. Demos — U.S. Securities and Exchange Commission Litigation Release No. 26262, dated March 10, 2025.


The SEC charged George Demos, former VP at Acadia Pharmaceuticals, with insider trading. Demos allegedly sold nearly all his Acadia stock options and shares on March 8, 2021, based on material nonpublic information about negative FDA feedback on a drug application. Acadia announced the FDA's concerns later that day, and its stock price dropped significantly, allowing Demos to avoid approximately $1.3 million in losses.




In Plain English
Imagine you work for a company that makes a new medicine. You find out some secret, bad news about whether the medicine will be approved by the government's health agency, the FDA. Before this bad news is made public, you quickly sell all your company stock. Later, the bad news comes out, and the company's stock price plummets. You avoided losing a lot of money because you knew the secret information before everyone else.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.


How the Alleged Scheme Worked
  1. Acadia's Drug Application Acadia Pharmaceuticals was seeking FDA approval for its drug NUPLAZID to treat psychosis related to dementia. The FDA had accepted the application for review, with a target date for communicating proposed labeling by March 3, 2021.
  2. Demos's Access to Information George Demos, as Acadia's Vice President of Drug Safety and Pharmacovigilance, was part of the NUPLAZID labeling team and had access to confidential information about the FDA's review process.
  3. FDA's Adverse Notification Instead of communicating proposed labeling by March 3, 2021, the FDA notified Acadia on that date that deficiencies in the application precluded discussion of labeling.
  4. Demos Learns of Delays Demos became aware that internal meetings to discuss FDA feedback were repeatedly rescheduled, first from March 4 to March 5, then to March 8, and finally to March 9, 2021. He was told management was 'not quite ready yet to discuss FDA feedback.'
  5. Demos's Conclusion Based on these delays and the information he possessed, Demos concluded that the FDA had made an adverse decision regarding the NUPLAZID application's labeling.
  6. The Trade On the morning of March 8, 2021, Demos exercised nearly all of his vested Acadia stock options and immediately sold the acquired shares.
  7. Public Announcement Later on March 8, 2021, after the market closed, Acadia announced that the FDA had identified deficiencies in the NUPLAZID application on March 3, 2021.
  8. Market Reaction The following day, March 9, 2021, Acadia's share price closed approximately 45 percent lower than it had on March 8, reflecting the negative news.
  9. Loss Avoided By selling his shares before the public announcement of the FDA's negative feedback, Demos allegedly avoided losses of about $1.3 million.


The Enforcement Action
On March 7, 2025, the SEC filed charges against George Demos, a former Vice President at Acadia Pharmaceuticals Inc., for insider trading. Demos allegedly sold nearly all his vested Acadia stock options and shares on March 8, 2021, based on material nonpublic information that the FDA had identified deficiencies in Acadia's supplemental new drug application for its Parkinson's disease psychosis drug. Acadia announced this negative FDA feedback after market close on March 8, and its stock price fell approximately 45% the next day. Demos is alleged to have avoided losses of about $1.3 million. Demos consented to a judgment permanently enjoining him from violating charged provisions, prohibiting him from serving as an officer or director of a public company for five years, and authorizing the court to determine disgorgement, prejudgment interest, and civil penalties. The settlement is subject to Court approval. In a parallel action, the U.S. Attorney's Office for the Southern District of California filed criminal charges against Demos.


Named in this action: George N. Demos.


Original SEC litigation release ↗ · Browse all cases