GOP Lawmaker Loses $17 Million as Favorite Stock Plunges
A Republican congressman’s hot biotechnology stock pick just went south.
Rep. Chris Collins suffered a paper loss of $16.7 million (A$22 million) after Innate Immunotherapeutics Ltd. said a mid-stage trial of its experimental treatment for multiple sclerosis showed no effect in helping patients. The New York congressman is the biggest shareholder, with 17 percent of the Australian drugmaker. After the data was reported Tuesday, the shares fell 92 percent in Sydney to less than 5 Australian cents.
Innate’s stock, sold in an initial public offering in December 2013, had gradually risen through 2016 before soaring early 2017 to peak at $1.77 on Jan. 25.
“For those that invested in Innate including me, we all were sophisticated investors who were aware of the inherent risk,” Collins said in an emailed statement.
Collins, one of President Donald Trump’s early supporters in Congress, came under fire early this year for investing in the Sydney-based company while sitting on a House committee that oversees health-care policy. Along with his shares, he sits on Innate’s board of directors, and his children are also among the largest holders.
Some of Collins’ colleagues also got into the company, buying shares in early 2017, near the stock’s peak. Republican Representatives Mike Conaway of Texas, Doug Lamborn of Colorado, Billy Long or Missouri and Markwayne Mullin of Oklahoma all bought in January.
Conaway bought less than $15,000 worth, Long and Lamborn between $15,001 and $50,000 worth, and Mullin between $100,001 and $250,000, according to filings. None of them have filed that they’ve sold shares before the stock lost almost all of its value.
Tom Price, now the Secretary of Health and Human Services, told Congress that he also invested in the company, as part of a discounted stock offering, after Collins told him about it. He sold his shares in February.
The Office of Congressional Ethics is probing what role Collins, who has been an investor in Innate for 15 years, played in attracting investors to the company, the Buffalo News reported last month, citing people familiar with the matter. A spokesman for Collins said at the time that the lawmaker had followed the rules on his personal finances.
A spokeswoman for Long said Tuesday that the lawmaker didn’t learn of Innate through a colleague, but rather through the news in January. Conaway, Lamborn and Mullin’s offices didn’t return calls seeking comment.
It’s not that uncommon for U.S. lawmakers who sit on committees that handle health issues to hold investments in drug or health services companies. Almost a quarter of them do, according to a Bloomberg BNA analysis in January.
Collins owned 37.9 million Innate shares as of December, according to data compiled by Bloomberg, with his children holding 5.2 million shares each.
Members of the House must report certain securities transactions over $1,000 within 30 days of notice of the transaction, or not later than 45 days after the transaction itself. This year, Collins has filed one transaction form, in April: It didn’t include Innate, meaning his holding hadn’t changed at the time.
Doni Bloomfield and Brandon Kochkodin