Speed Reads

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GOP congressman reportedly loses $17 million in a single day thanks to a bad drug gamble

Stock in an Australian biotech company that was questionably promoted to members of the House by Rep. Chris Collins (R-N.Y.) plummeted from $1.77 a share to just 5 cents on Tuesday, after the company announced its multiple sclerosis drug had failed trials, The Buffalo News reports. "The news is dire for both the company and investors," Australia's Money Morning wrote, as shareholders' hopes had hinged on the promising drug's success.

Collins is the firm's biggest shareholder; he owns about a fifth of the company, Innate Immunotherapeutics, with his two children. He personally lost $17 million Tuesday, Bloomberg reports.

"Sophisticated investors know there's a risk and as you now know, there was never any inside information that would indicate otherwise," Collins told The Buffalo News, defending his decision to promote the company's stock to his colleagues.

The Buffalo News added:

...Unusual trading activity Friday "suggests that somebody with knowledge of the results was front-running the announcement," [analyst Sean] O'Neill said. "That’s something I'd hope the regulator will be looking closer at."

Collins told The Buffalo News Tuesday morning that he did not sell any of his shares in Innate before its price collapsed. [The Buffalo News]

Health and Human Services Secretary Tom Price, a former congressman from Georgia, invested in Innate Immunotherapeutics at Collins' suggestion, a topic that was raised and criticized during his confirmation hearing earlier this year. Collins had reportedly bragged "off the House floor … about how he had made people millionaires from a stock tip." Price sold his shares in February for $250,000.