OBI Pharma Deeply Disappointed with Prosecutor’s Decision to Proceed with Cases. Facts should demonstrate Innocence.
Shi-Lin District prosecutors Office announced today (9 Jan 2017) the result of the investigation of OBI Pharma. To the company’s surprise and without concrete evidence, the prosecutors charged some of our colleagues with alleged insider trading in violation of the Securities and Exchange Act. In addition, the prosecutors charged Michael Chang, the Chairman of OBI Pharma, for alleged bribery of former president of Academia Sinica, Chi-Huey Wong, in connection with the company’s licensing of the next generation breast cancer drug, OBI-833, and technology use in the Large Scale Enzymatic Synthesis of Oligosaccharides. OBI Pharma is shocked and deeply disappointed with this decision and believes the facts will ultimately demonstrate the innocence of the Chairman and our colleagues. OBI Pharma plans to fully support the Chairman and colleagues in their fight for justice through the Taiwan Judicial System. OBI Pharma emphasizes that all research and development programs will continue and remain unaffected.
1. According to the reasoning of prosecution provided by the Shi-Lin Prosecutors Office, the material information was deemed available on 28th Aug 2015, when the company held an expert meeting. The prosecutor incorrectly claims OBI insiders received information prior to the unblinding of the company’s clinical trial, already deemed as a failed trial by the prosecution. Therefore, any selling of company shares by the insiders after the meeting would allegedly be considered insider trading. This false logic clearly demonstrates a serious misunderstanding of new drug clinical trials and the standards of unblinding processes. The purpose of the Aug 2015 meeting was solely to discuss the appropriate timing for unblinding. In fact, the attending experts suggested that the blinded data could be mature as early as Q1, 2016, and that OBI might consider publishing the trial results at the ASCO meeting in June 2016. Therefore, the company decided to execute the unblinding plan in Q1, 2016.
2. In regards to the charge against Michael Chang, the Chairman of OBI Pharma, related to alleged bribery of the former president of Academia Sinica, the prosecutor’s claims also do not match the facts:
(1) The Board of OBI Pharma agreed to issue 1,500 lots of technology shares to the Chairman in acknowledgement of his long-term contributions to the company and improvement of manufacturing technologies. However, the Ministry of Economic Affairs responded with a negative opinion on the definition of the technology shares. The Chairman of the company decided to waive those exact technology shares to prevent any delay of the development progress of the company. The 1,500 lots of shares were never issued, therefore the Chairman had no shares with which to allegedly bribe the former president of Academia Sinica, Chi-Huey Wong.
(2) In regards to the acquisition of the 3,000 lot of OBI Pharma shares by ex-president of Academia Sinica, Chi-Huey Wong, mentioned in the prosecutor’s reasons for prosecution, the records show the funding for the shares was fully paid by Chi-Huey Wong, not by Michael Chang. Although the facts demonstrate otherwise, the Shi-Lin Prosecutors Office still decided to charge the Chairman of the company with alleged bribery of Chi-Huey Wong.
New drug development is a long road with high risk and difficulties. OBI Pharma has encountered many difficulties since the unblinding. The company is frustrated and disappointed by the current situation but still firmly believes that the Taiwan judicial system is both fair and just, and will rely on only the facts which will eventually prove the innocence of its colleagues.
OBI Pharma will continue to advance its original goals, dedicated to the development of Taiwan biotechnology. OBI will continue to focus on human health and commit to the development of innovative drugs from Taiwan, and will not give up its vision until achieved.