Peizer Shot With Insider Trading Charges, Sarepta Soars After FDA Approval

According to Gordon Gekko “Greed is good”. But if you're someone by the name of Terren Peizer… well then all greed gets you is a cell mate named Bubba on cell block C. If you haven’t heard yet, Terren Peizer, a health industry CEO who once was the golden boy of Wall Street's notorious junk-bond king, Michael Milken, is officially facing some serious charges for insider trading. And it ain’t lookin good. 

Source: Youtube 

You see, while this story contains corporate drama, shady feels, and a sequence of events that could rival any Netflix series…

Terren Peizer wasn’t just any CEO; he was the former chairman of Ontrak (NASDAQ:OTRK), a healthcare company focusing on substance abuse and mental health issues. And like mentioned above, he was also a protégé of Michael Milken, aka the junk-bond king who pleaded guilty to securities fraud back in the 80s - oh the foreshadowing. 

Source: Wall Street Journal

But it gets even better, Peizer ended up dodging prosecution back then by cooperating AGAINST Milken, who later got a pardon from Donald Trump. 

Fast forward to today, and it seems like Peizer couldn’t shake off those Wall Street bad habits, because according to reports, the man played a little too fast and loose with Rule 10b5-1 trading plans. These plans are supposed to be a safe harbor for executives to sell their stock without raising eyebrows. You set up a plan to sell shares at a future date, regardless of what’s happening in the market. The idea is to show you’re not trading on insider info. But Peizer? He used these plans to dump nearly $20 million worth of Ontrak shares before bad news hit the fan. 

You see, back in the spring of 2021, Ontrak was in a precarious spot. They’d already lost a big contract with Aetna, and losing Cigna, their other major customer, would be catastrophic. Peizer knew this but went ahead and set up his first trading plan on May 10, 2021. He started selling shares the next day—just a week before Cigna hinted they might be pulling the plug.

Peizer’s defense argued that he relied on his management team’s advice, which said he wasn’t trading on any nonpublic information. But come on, the timing was just too perfect. He set up another trading plan in August, right after learning Cigna was definitely ending their contract. 

When the news broke, Ontrak’s stock plummeted by 44%. 

But while Peizer thought he’d played a smooth hand in covering his tracks. The Justice Department and the SEC weren’t buying Peizer’s story. They argued that he abused the 10b5-1 plans to avoid massive losses by selling shares before the public knew what was coming. Nicole Argentieri, head of the DOJ’s criminal division, made it clear: “We will not let corporate executives who trade on inside information hide behind trading plans they established in bad faith.”

Source: LinkedIn 

So after a nine-day trial, a Los Angeles jury found Peizer guilty of one count of securities fraud and two counts of insider trading. He’s now facing a maximum of 25 years in prison for the securities fraud charge and up to 20 years for each insider trading count. Sentencing is scheduled for October, and let’s just say it’s not looking good for the fallen CEO. 

In fact, with the way things are looking, the only thing Peizer has left to hope for is who they’ll pick to play him in Netflix’s next hit docu-series. So yeah, I guess he has that going for him at least. 
 

Sarepta's Stock Soars After FDA Approval 

It’s Saturday, and apparently there’s a new stock that’s making waves faster than all the other meme stocks on Reddit. In fact, as of yesterday this stock is already up over 40% after the FDA gave them the green light for an expanded use of their groundbreaking Duchenne muscular dystrophy (DMD) gene therapy. So, grab your avocado toast, your over priced latte, or whatever else you have on summer weekends and let’s dive into why Sarepta Therapeutics (NASDAQ:SRPT) needs to be on your watchlist come Monday morning. 

But first, a little background for those who skipped biology class. Duchenne muscular dystrophy is a genetic disorder that mainly affects boys and leads to progressive muscle degeneration. (Think Darius Goes West). But while DMD is caused by mutations in the DMD gene, it’s more importantly responsible for making dystrophin, a protein essential for muscle function. Without it, muscles waste away, leading to severe complications and a life expectancy that’s tragically short.

Darius Weems - Source: TED BLOG 

Which is why Sarepta Therapeutics, founded way back in 1980, has been on a mission to tackle rare diseases through genetic medicine. They’re like the Tony Stark of biotech, using cutting-edge gene therapy, RNA technology, and gene editing to fight the bad guys in our DNA. With over 40 programs in their pipeline, these guys aren’t just playing around—they’re here to change lives.

Enter Elevidy, which is Sarepta’s flagship product for DMD. This is a one-dose, adeno-associated virus (AAV)-based gene therapy. In simpler terms, it’s like sending a tiny, friendly virus to deliver a working version of the dystrophin gene directly into muscle cells. The goal? To produce the essential dystrophin protein and slow down or even halt muscle degeneration. 

Source: Sarepta Therapeutics 

However, up until this point in time, this level of gene therapy has only been approved for ambulatory DMD patients aged 4 and 5. But with the FDA’s recent decision to expand Elevidy and approve it for all DMD patients aged four and above, whether they can walk or not, ignites a seismic deal for Sarepta.This is like swapping out your cheap ordinary PBA beer for a top-shelf whiskey—except way more important. 

Source: Parent Project Muscular Dystrophy 

In fact, Sarepta’s Q1 2024 earnings report shows just how transformative Elevidys has been. They reported a 55% year-over-year increase in net product revenue, hitting $359.5 million. Elevidys alone raked in $133.9 million. Since its initial approval, it’s achieved over $334 million in cumulative sales, outperforming other gene therapies by a mile.

Interestingly, while the impact is significant and broadens the range of Sarepta’s gene-therapy scope, this FDA approval wasn’t without drama. Initially, some FDA reviewers weren’t convinced that Elevidys worked based on the data. But Peter Marks, the FDA’s top biologics official, overruled them. He cited additional evidence and patient testimonies, essentially saying, “Uhhh guys… this thing actually works.” Giving anyone with eyes a clear view that with this expanded approval, Sarepta is gearing up for a surge in demand. 

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In addition to reaching a broader market, they’re hiring new employees to boost their manufacturing, commercialization, and research capabilities. It’s like when a startup gets a huge investment and suddenly starts hiring everyone with a LinkedIn profile.

So what does this mean for next week's trading? Well simply put, Sarepta presents a compelling opportunity. 

It’s no secret that they’re leading the charge in genetic medicine and have a robust pipeline of therapies. But Sarepta isn’t resting on their laurels. They’re conducting additional clinical trials to expand Elevidys to even younger patients and those who can’t walk anymore. They’re also partnering with Roche to market Elevidys outside the U.S., aiming to bring this life-changing therapy to a global audience.

So while the search results for Sarepta’s stock continueS to soar this weekend, understand that it’s for good reason. They’ve taken a devastating condition like DMD and offered hope through groundbreaking science. And as they continue to push boundaries, both patients and investors have a lot to look forward to. So as you enjoy the weekend's festivities… don’t neglect adding Sarepta into the mix of possibilities. It’s definitely not fun getting the FOMO bug after the fact: 

Stocks.News does hold positions in Netflix as mentioned in the article.