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Analyst who cast doubt on Provenge vaccine settles with SEC

By Sharon Begley

(Reuters) - A former hedge-fund analyst who argued that Dendreon Corp's therapeutic vaccine for prostate cancer may hasten the death of patients has reached a settlement with U.S. securities regulators over failure to disclose her financial interests in the company.

Marie Huber, who trained as a biochemist at Cambridge University in England and worked at an unnamed New York hedge fund from 2007 to 2011, neither admitted nor denied the Securities and Exchange Commission's findings, according to the agency. Huber said she stood by her analysis of the vaccine, Provenge.

The SEC settlement bars her from the securities industry for six months and requires her to pay a $25,000 fine.

The SEC's administrative finding, dated last week, concluded that, for a short period of time, Huber had a significant financial stake in the perception of Dendreon.

From June 17 to July 12, 2010, it found, she purchased $236,000 worth of options in Seattle-based Dendreon, essentially betting that its stock price would drop. She also purchased such options in her mother's account. In addition, the SEC said, Huber shared her negative analysis of Provenge with friends and family members who traded in Dendreon stock.

In a paper published in the Journal of the National Cancer Institute in February 2012, Huber and three co-authors reported that analysis. In documents JNCI requires authors to sign, she declared no financial conflicts of interest, a claim she repeated to Reuters for a story about the paper later that year and which the SEC timeline confirms. For a link to the story, see: http://www.reuters.com/article/2012/03/30/us-provenge-idUSBRE82T07420120330

Huber said at the time that neither she nor anyone she is connected to stands to benefit financially from her analysis, and that she was scrutinizing the Provenge clinical trial because she wanted to help "vulnerable and desperate patients."

In a statement released by her attorney on Tuesday night, Huber said, "I stand by the rigor of my scientific analysis and I shall continue to follow-up on the concerns that I expressed with regard to Provenge" in the 2012 JNCI paper.

"My primary motivation has always been the well-being of patients and the safety and effectiveness of this treatment," Huber's statement said. "The accuracy of my research and conclusions are not an issue in the SEC settlement."

The SEC's finding dates back to the spring of 2010, soon after the Food and Drug Administration approved Provenge. Huber had prepared a report on the vaccine for her hedge fund and shared it with an analyst at another fund, after which she purchased the Dendreon options.

She asked her employer to submit the report to a federal agency that had solicited public comment on whether the Medicare program for the elderly should cover Provenge. When the hedge fund did not, according to the SEC account, Huber and the second analyst emailed the report in July 2010 to some 450 people, from a Gmail account in the name of Jonathan White and signed by "A concerned physician, scientist and citizen."

The email said, "We must stand up against those that wish to use the power of the sword to threaten legitimate scientific discourse and concern for patient safety." Subsequently, two cancer specialists and an immunologist co-authored the JNCI paper with Huber.

The day after the mass email, Dendreon shares briefly fell 7.2 percent on heavy volume and Huber sold some of her options. She "still suffered significant trading losses because most of her positions remained unsold or unexercised since they were so far out of the money," the SEC found.

The agency concluded that the signature on the emails was a false statement and therefore a violation of the Securities Act. The fact that the authors of the email were hedge fund analysts who held about-to-expire Dendreon options "were material," the SEC said, "because investors would have considered the identity, motive, and financial self-interest" of Huber and the second analyst "important to assessing the report and any decision to buy or sell the securities of Dendreon."

(Editing by Michele Gershberg, Bernard Orr and Alden Bentley)

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