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`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 1 of 11
`
`MONIQUE C. WINKLER (Cal. Bar No. 213031)
`STEVEN BUCHHOLZ (Cal. Bar No. 202638)
`MARC D. KATZ (Cal. Bar No. 189534)
` katzma@sec.gov
`DAVID ZHOU (NY Bar No. 4926523)
` zhoud@sec.gov
`TRACY S. COMBS (Cal. Bar No. 298664)
` combst@sec.gov
`
`Attorneys for Plaintiff
`SECURITIES AND EXCHANGE COMMISSION
`44 Montgomery Street, Suite 2800
`San Francisco, CA 94104
`(415) 705-2500 (Telephone)
`(415) 705-2501 (Facsimile)
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN FRANCISCO DIVISION
`
`
`SECURITIES AND EXCHANGE COMMISSION,
`
`
`
`Plaintiff,
`
`
`vs.
`
`MATTHEW PANUWAT,
`
`
`Defendant.
`
`
`
`
`
`
`
`Case No.
`
`
`
`COMPLAINT
`
`
`Plaintiff Securities and Exchange Commission (the “SEC”) alleges as follows:
`SUMMARY OF THE ACTION
`1.
`This is a case of insider trading by Matthew Panuwat, formerly a business
`development executive at Medivation Inc. (“Medivation”), a mid-sized oncology-focused
`biopharmaceutical company.
`2.
`On August 18, 2016, and in the course of Panuwat’s employment at Medivation,
`Panuwat received confidential, nonpublic information in an email from Medivation’s Chief
`
`COMPLAINT
`
`
`
`
`-1-
`
`CASE NO. _________
`
`
`

`

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`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 2 of 11
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`Executive Officer (“CEO”) that Medivation would be imminently acquired by pharmaceutical
`giant Pfizer, Inc. (“Pfizer”).
`3.
`As an employee and agent of Medivation, Panuwat owed Medivation a duty of
`trust and confidence, including a duty to refrain from using Medivation’s proprietary information
`for his own personal gain.
`4.
`Nonetheless, within minutes of receiving this highly confidential news from
`Medivation’s CEO, Panuwat misappropriated Medivation’s confidential information by
`purchasing—from his work computer—out-of-the-money, short-term stock options in Incyte
`Corporation (“Incyte”), another mid-cap oncology-focused biopharmaceutical company whose
`value he anticipated would materially increase when the Medivation acquisition announcement
`became public. Panuwat did not inform anyone at Medivation about his Incyte trades.
`5.
`On August 22, 2016, Medivation publicly announced it would be acquired by
`Pfizer in an all-cash tender offer at a significant premium to the price at which Medivation shares
`had been trading. Over the course of the trading day, the price of Medivation shares rose
`materially by approximately 20%. That same day, the stock price of Incyte rose materially by
`approximately 8% on the news of Medivation’s acquisition and the value of Panuwat’s Incyte
`stock options roughly doubled. By trading ahead of the announcement, Panuwat obtained illicit
`profits of $107,066.
`6.
`By engaging in this conduct, as further described herein, Panuwat violated and,
`unless restrained and enjoined by this Court, may continue to violate, Section 10(b) of the
`Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Exchange Act Rule
`10b–5 [17 C.F.R. § 240.10b–5].
`7.
`The SEC seeks an order from the Court enjoining Defendant from future violations
`of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; requiring him to pay a civil
`monetary penalty; barring him from serving as an officer or director of a public company; and
`providing for other appropriate relief.
`
`COMPLAINT
`
`
`
`
`-2-
`
`CASE NO. _________
`
`

`

`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 3 of 11
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`JURISDICTION AND VENUE
`8.
`The SEC brings this action pursuant to Sections 21(d) and 21A of the Exchange
`Act [15 U.S.C. §§ 78u(d); 78u-1].
`9.
`This Court has jurisdiction over this action pursuant to Section 27 of the Exchange
`Act [15 U.S.C. § 78aa] and 28 U.S.C. § 1331.
`10.
`Defendant, directly or indirectly, made use of the means and instrumentalities of
`interstate commerce or of the mails in connection with the acts, transactions, practices, and courses
`of business alleged in this complaint.
`11.
`Venue is proper in this District pursuant to Section 27(a) of the Exchange Act
`[15 U.S.C. § 78aa(a)]. Acts, transactions, practices, and courses of business that form the basis for
`the violations alleged in this complaint occurred in the Northern District of California.
`12.
`Under Civil Local Rule 3-2(d), this civil action should be assigned to the San
`Francisco Division, because a substantial part of the events or omissions which give rise to the
`claims alleged herein occurred in San Francisco County.
`DEFENDANT
`13.
`Defendant Matthew Panuwat, age 44, resides in Walnut Creek, California. From
`September 2014 to January 2017, Panuwat worked in business development at Medivation. Prior
`to that time, Panuwat held licenses in the securities industry and was registered with the SEC as an
`associated person of an investment bank in San Francisco that acted as a broker and dealer in
`securities.
`14.
`At all relevant times, Panuwat was an expert in the biopharmaceutical industry. He
`has undergraduate and graduate biology- and pharmaceutical-related degrees, as well as an MBA
`from a top business school. At the time of his Incyte trades, he had spent over fifteen years in the
`biopharmaceutical industry, including eight years in the global healthcare investment banking
`division of a top investment bank and employment in business and strategic development at
`several biopharmaceutical companies. Panuwat had significant knowledge and experience
`concerning many aspects of the biopharmaceutical industry, including mergers and acquisitions.
`At all relevant times, Panuwat was aware of the nature of and prohibitions on insider trading
`
`COMPLAINT
`
`
`
`
`-3-
`
`CASE NO. _________
`
`

`

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`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 4 of 11
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`through his employment at various biopharmaceutical companies and in investment banking.
`Panuwat is currently an executive at another publicly-traded biopharmaceutical company.
`RELATED ENTITIES
`15. Medivation was a mid-cap, oncology-focused biopharmaceutical company
`incorporated in Delaware with its principal place of business in San Francisco, California until it
`was acquired by Pfizer Inc., a global pharmaceutical company, on September 28, 2016. Before its
`2016 acquisition, Medivation’s common stock was registered with the Commission pursuant to
`Section 12(b) of the Exchange Act and was listed on the Nasdaq Stock Market LLC (“Nasdaq”)
`under the ticker symbol “MDVN.” In connection with its acquisition by Pfizer, Medivation’s
`stock was delisted from Nasdaq and deregistered with the Commission.
`16.
`Incyte is a mid-cap, oncology-focused biopharmaceutical company incorporated in
`Delaware with its principal place of business in Wilmington, Delaware. Its common stock is
`registered with the Commission pursuant to Section 12(b) of the Exchange Act and is listed on
`Nasdaq under the ticker symbol “INCY.”
`FACTUAL ALLEGATIONS
`Panuwat Heads Business Development for Medivation and Pledges Not to Trade on
`Its Confidential Information.
`17.
`In 2016, Panuwat’s title at Medivation was Senior Director of Business
`Development. In that role, Panuwat was responsible for business development at Medivation and
`reported to the company’s Chief Financial Officer.
`18.
`Panuwat’s role at Medivation included finding, evaluating, and pursuing strategic
`opportunities to expand Medivation’s drug products and development pipeline, primarily through
`acquisitions and in-licensing. In that role, Panuwat closely tracked the stock prices, drug products,
`and development pipelines of other biopharmaceutical companies, including Incyte, as well as
`merger and acquisition activity in the biopharmaceutical industry.
`19.
`At Medivation, Panuwat was entrusted with confidential information involving
`actual or potential Medivation transactions, including actual or potential acquisitions of or by
`Medivation.
`
`A.
`
`COMPLAINT
`
`
`
`
`-4-
`
`CASE NO. _________
`
`

`

`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 5 of 11
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`20.
`Panuwat agreed, at the outset of his employment with Medivation, that he would
`keep information he learned during his employment confidential and not make use of such
`information, except for the benefit of Medivation. Panuwat also signed Medivation’s insider
`trading policy, which prohibited employees from personally profiting from material nonpublic
`information concerning Medivation by trading in Medivation securities or the securities of another
`publicly traded company. The policy stated, “During the course of your employment…with the
`Company, you may receive important information that is not yet publicly disseminated…about the
`Company. … Because of your access to this information, you may be in a position to profit
`financially by buying or selling or in some other way dealing in the Company’s securities…or the
`securities of another publicly traded company, including all significant collaborators, customers,
`partners, suppliers, or competitors of the Company. … For anyone to use such information to gain
`personal benefit…is illegal. …” (Emphasis added.)
`B. Medivation Becomes an Acquisition Target.
`21.
`In April 2016, Medivation engaged investment banks to advise the company in
`assessing its strategic options in light of then-recent efforts by a French pharmaceutical company
`to acquire Medivation. Panuwat, who himself had years of experience as an investment banker
`and had specialized in deals involving the pharmaceutical industry, worked closely with
`Medivation’s investment bankers, and with other high-level Medivation executives, to explore
`Medivation’s alternatives, including a possible merger with another company.
`22.
`In the course of his work with the investment banks advising Medivation about its
`strategic options, Panuwat reviewed presentations authored by the bankers that discussed
`Medivation’s peer companies in the biopharmaceutical industry, i.e., companies that the
`investment banks concluded were comparable to Medivation based on their professional judgment.
`In particular, the bankers drew close parallels between Medivation and Incyte, including that both
`were valuable, mid-cap, oncology-focused companies with a profitable FDA-approved
`(commercial stage) drug on the U.S. market. Panuwat knew that, in 2016, large-cap
`pharmaceutical companies were interested in acquiring oncology-focused mid-cap
`biopharmaceutical companies with commercial-stage drugs; that there were only a few—including
`
`COMPLAINT
`
`
`
`
`-5-
`
`CASE NO. _________
`
`

`

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`Medivation and Incyte—left to acquire; and that each such acquisition was material to the
`remaining companies because it made them potentially more valuable acquisition targets and could
`thus positively affect the stock price of those companies. Panuwat also knew that the previous
`announcement of the acquisition of a mid-cap oncology-focused company in 2015 by a large-cap
`pharmaceutical company had resulted in the material increase of the stock prices of both
`Medivation and Incyte following the announcement.
`23.
`In the course of his work with the investment banks advising Medivation, Panuwat
`himself noted to the investment bankers that they might want to consider Incyte a comparable
`company to Medivation. During this time, and as part of his employment by Medivation, Panuwat
`also tracked both Incyte’s and Medivation’s stock prices closely, as well as the stock prices of
`other biopharmaceutical companies. Incyte was frequently listed as a peer mid-cap oncology
`company to Medivation in analyst reports in the 2015 to 2016 time period.
`24.
`During July and August 2016, Medivation explored whether other, larger
`pharmaceutical companies might have interest in acquiring Medivation, particularly at a price that
`was higher than that offered in the spring by the French pharmaceutical company.
`25.
`Panuwat was closely engaged in these discussions. As Medivation confidentially
`solicited bids from potential acquirers, the investment bankers and other Medivation executives
`shared information with Panuwat about the potential acquirers’ due diligence and share-price bids.
`Panuwat was closely involved in coordinating Medivation’s responses to various due diligence
`requests during that time and participated in meetings of Medivation’s board of directors
`concerning Medivation’s strategic alternatives with respect to a potential merger.
`
`Panuwat Trades Incyte Options to Capitalize on Medivation’s Material Nonpublic
`Information.
`26.
`In August 2016, Panuwat learned confidential information through his employment
`that Medivation was going to be imminently acquired at a significant premium to the company’s
`stock price.
`27.
`On August 12, 2016, Medivation’s investment bankers sent Panuwat a summary of
`bids by potential acquirers indicating that at least five potential acquirers were offering an all-cash
`
`C.
`
`COMPLAINT
`
`
`
`
`-6-
`
`CASE NO. _________
`
`

`

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`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 7 of 11
`
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`acquisition of Medivation at a premium per share over Medivation’s then-current share price and
`that all the potential acquirers were prepared to move forward quickly.
`28.
`On Sunday, August 14, 2016, Panuwat attended a meeting of the Medivation board
`of directors at which the board authorized its investment bankers to send letters to the final bidders
`for Medivation, including Pfizer, soliciting final merger agreement comments by August 18, 2016
`and final bids to acquire the company by August 19, 2016. Prior to the August 14, 2016 board
`meeting, Medivation’s investment bankers sent Panuwat copies of these proposed letters, which
`were marked “Confidential.”
`29.
`Several of the emailed communications Panuwat received from the investment
`bankers during this time indicated that certain potential acquirers of Medivation were intent on
`moving forward with an acquisition quickly and that Monday, August 22, 2016 was the target date
`for a public announcement of the acquisition.
`30.
`On Thursday, August 18, 2016, Medivation’s CEO sent a group of Medivation
`executives, including Panuwat, an email relaying that Pfizer’s head of business development had
`called and expressed overwhelming interest in acquiring Medivation and said that Pfizer’s CEO
`would call Medivation’s CEO later that day to reiterate that message and resolve final details with
`respect to an impending acquisition of Medivation by Pfizer.
`31.
`Panuwat learned the foregoing information through his employment at Medivation,
`and he knew or was reckless in not knowing that the information was material and nonpublic.
`Panuwat also knew, or was reckless in not knowing, that the information concerning Medivation’s
`imminent acquisition was material not only to Medivation, but also to Incyte, a peer company in
`the biopharmaceutical industry that was also publicly-traded, mid-cap, and oncology-focused.
`Medivation’s undisclosed acquisition would have been viewed by a reasonable investor in
`Medivation or Incyte as having significantly altered the total mix of information made available.
`The public announcement of Medivation’s acquisition at a significant premium to its then-current
`share price would likely have a positive impact on Incyte’s stock price. For example, the
`acquisition of Medivation also made Incyte a more attractive target for acquisition.
`32.
`By virtue of his employment at Medivation, as well as the confidentiality and
`
`COMPLAINT
`
`
`
`
`-7-
`
`CASE NO. _________
`
`

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`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 8 of 11
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`insider trading policies that he signed, Panuwat owed Medivation a duty to keep this material
`nonpublic information confidential, and to refrain from trading on Medivation’s confidential
`information.
`33.
`Nonetheless, within minutes of receiving the Medivation CEO’s email on August
`18, 2016, and while knowing or being reckless in not knowing that such entrusted information was
`material and nonpublic, Panuwat used this information concerning the Medivation acquisition to
`trade. Specifically, Panuwat logged on to his personal brokerage account from his work computer
`and purchased 578 Incyte call option contracts with strike prices of $80, $82.50, and $85 per
`share—significantly above Incyte’s stock price of $76 to $77 per share at the time—and the
`soonest possible expiration date, September 16, 2016. Panuwat was aware that Incyte was not
`expected to make any significant announcement, such as issuing a quarterly earnings report, before
`the options expiration date. Rather, Panuwat anticipated that Incyte’s stock price would jump
`within less than a month on public disclosure of the upcoming Medivation acquisition
`announcement. Panuwat had never traded Incyte stock or options before.
`34.
`Panuwat did not seek pre-clearance or authorization of his Incyte options trades
`from anyone at Medivation, nor did he inform anyone at Medivation about his Incyte options
`trades. Panuwat’s undisclosed, self-serving use of Medivation’s information to purchase
`securities, in breach of his duty of trust and confidence, defrauded Medivation and undermined the
`integrity of, and investor confidence in, the securities markets.
`35. On Saturday, August 20, 2016—two days after Panuwat purchased the Incyte call
`options—Medivation signed a merger agreement with Pfizer. As reflected in prior analyst reports,
`Medivation’s investment bankers included Incyte as a comparable publicly-traded company in
`their fairness opinions regarding the $81.50 price per share offered by Pfizer to acquire
`Medivation. The $81.50 price per share offered by Pfizer represented a significant premium over
`the prior, publicly-known unsolicited acquisition proposal of $52.50 per share by the French
`pharmaceutical company in April 2016.
`36.
`On Monday, August 22, 2016, before market open, and four days after Panuwat
`purchased the Incyte options, Medivation publicly announced that it had entered into an agreement
`
`COMPLAINT
`
`
`
`
`-8-
`
`CASE NO. _________
`
`

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`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 9 of 11
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`and plan of merger whereby it would be acquired by Pfizer at a price of $81.50 per share, a 21.4%
`premium over its closing price of $67.16 per share on Friday, August 19, 2016, and a 69.8%
`premium to the average closing prices for the shares for the 52-week period ended on August 19,
`2016. At market open on August 22, 2016, Medivation’s stock price climbed materially to $80.62,
`a 20% increase over the prior trading day’s closing price of $67.16.
`37.
`Incyte’s stock price also materially increased on August 22, 2016. Incyte’s stock
`price, which had closed at $76.11 on Friday, August 19, 2016, opened at $79.80, reached a high of
`$84.39, and closed at $81.98 on Monday, August 22, 2016, approximately 8% higher than the
`prior trading day’s close. A number of other mid-cap biopharmaceutical companies’ stock prices
`also materially increased on the day of the Medivation acquisition announcement. Analyst reports
`published on August 22 and 23, 2016 noted the positive impact of the Medivation acquisition
`announcement on Incyte’s and other peer biopharmaceutical companies’ stock prices.
`38.
`As a result of his trading in Incyte call options in advance of the August 22, 2016
`Medivation announcement, Panuwat generated ill-gotten gains of $107,066.
`FIRST CLAIM FOR RELIEF
`Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder
`39.
`The SEC re-alleges and incorporates by reference Paragraph Nos. 1 through 38.
`40.
`By engaging in the conduct described above, Defendant Panuwat, directly or
`indirectly, in connection with the purchase or sale of securities, by the use of means or
`instrumentalities of interstate commerce, or the mails, with scienter:
`(a)
`Employed devices, schemes, or artifices to defraud;
`(b) Made untrue statements of material fact or omitted to state material facts
`necessary in order to make the statements made, in the light of the
`circumstances under which they were made, not misleading; and
`Engaged in acts, practices, or courses of business which operated or would
`operate as a fraud or deceit upon other persons, including purchasers and
`sellers of securities.
`
`(c)
`
`COMPLAINT
`
`
`
`
`-9-
`
`CASE NO. _________
`
`

`

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`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 10 of 11
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`41.
`By reason of the foregoing, Defendant Panuwat violated, and unless restrained and
`enjoined is likely in the future to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]
`and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. Panuwat is currently a Chief Business Officer
`at another publicly-traded biopharmaceutical company where he plays a similar role to his
`Medivation employment, is privy to similarly material non-public information, and is presented
`with opportunities to violate the securities laws again.
`PRAYER FOR RELIEF
`WHEREFORE, the SEC respectfully requests that this Court:
`I.
`Permanently enjoin Defendant Panuwat from directly or indirectly violating Section 10(b)
`of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
`II.
`Issue an order requiring Defendant Panuwat to pay a civil monetary penalty pursuant to
`Section 21A of the Exchange Act [15 U.S.C. § 78u-1].
`III.
`Prohibit Defendant Panuwat from serving as an officer or director of any entity having a
`class of securities registered with the SEC pursuant to Section 12 of the Exchange Act [15 U.S.C.
`§ 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C.
`§ 78o(d)], pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)].
`IV.
`Retain jurisdiction of this action in accordance with the principles of equity and the Federal
`Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees
`that may be entered, or to entertain any suitable application or motion for additional relief within
`the jurisdiction of this Court.
`
`V.
`Grant such other and further relief as this Court may determine to be just and necessary.
`
`
`
`
`
`COMPLAINT
`
`
`-10-
`
`CASE NO. _________
`
`

`

`
`
`
`
`
`
`
`
` /s/ Tracy S. Combs
`MARC D. KATZ
`DAVID ZHOU
`TRACY S. COMBS
`Attorneys for Plaintiff
`SECURITIES AND EXCHANGE COMMISSION
`
`Case 3:21-cv-06322-SK Document 1 Filed 08/17/21 Page 11 of 11
`
`
`
`
`
`Respectfully submitted,
`
`
`Dated: August 17, 2021
`
`
`
`
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`COMPLAINT
`
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`-11-
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`CASE NO. _________
`
`