The former employer of New York City’s ex-Covid czar is being investigated for potential violations of federal securities laws after he seemingly blabbed to an unidentified woman that the company hired him to “spin” facts to the media about the monkeypox drug they manufactured.
Two New York City-based law firms launched probes this week into SIGA Technologies, on behalf of its investors, after the pharmaceutical firm’s former chief medical officer and executive president, Dr. Jay Varma, was caught making the comments on a hidden camera.
Varma, who served as a senior health adviser to former Mayor Bill de Blasio, seemingly admitted to using the media to “spin stories” to salvage SIGA’s monkeypox drug TPOXX and to preserve the company’s stock price, according to Levi & Korsinsky, one of the law firm’s investigating.
Highly edited clips of the secret recording between Varma and a so-called undercover operative were released Wednesday as part of conservative podcaster Steven Crowder’s series “Mug Club.”
Another law firm investigating possible security claims on behalf of investors of SIGA — Wolf Haldenstein Adler Freeman & Herz — noted the company had been conducting a clinical trial to evaluate the efficacy and safety of TPOXX in the treatment of Mpox.
But on Aug. 15, a clinical trial revealed the drug failed to “achieve its primary endpoint,” Wolf Haldenstein Adler Freeman & Herz said.
Varma reportedly said the apparent “spin” campaign was carried out to convince investors “not to dump the stock, thinking that the Company was worthless,” according to Wolf Haldenstein Adler Freeman & Herz.
Following the release of Varma’s comments, SIGA’s stock dropped by more than 15%, the law firm said.
Varma was fired from SIGA on Sept. 19 after he was caught on a secret recording publicly bragging about hosting sex parties and attending an underground Manhattan rave party during the height of the pandemic while serving as the city’s COVID czar.
He was also removed from the pharmaceutical firms’ board of directors.
SIGA released a statement Wednesday calling Varma’s comments “inaccurate and misleading.”
“We are deeply angered by his comments and behavior which do not reflect SIGA, the way we do business or our values,” SIGA stated.
“He is no longer affiliated with SIGA in any way.”
“His recent comments regarding SIGA and TPOXX represent his personal views and relate to areas of our business for which he was not responsible during his one year as a SIGA employee,” the statement continued.
The edited clips of Varma were reportedly filmed on hidden camera and were recorded between July 27 and Aug. 14 in New York City.
In the second video, Varma described the Food and Drug Administration approval process while discussing SIGA Technologies’ “tecovirimat,” or “TPOXX” drug.
“That’s why spinning it in the media is helpful. We want the FDA to approve our drugs, specifically for monkeypox, and right now it’s only considered experimental and they won’t approve it,” he said.
In the US, TPOXX is not approved by the FDA for the treatment of Mpox but can be used to treat patients as part of a clinical trial known as the Study of Tecovirimat for Human Mpox Virus (STOMP), according to SIGA Technologies.
The company’s website added that the STOMP trial is being conducted to evaluate the efficacy of TPOXX for the treatment of Mpox.
Varma then griped in the video filmed on Aug. 14 that his then-employer is “stuck with our drug” but people aren’t going to be “as confident in it because the data doesn’t look as strong as it should.”
“Sometimes you do a study, and this f—ing … nothing works at all, or people get really sick from it,” he said in the covert recording.
“The problem is, if you do another study, it’ll take a year or two to do it, because you have to get ethics approval, you gotta get money, you gotta get patients to come in.”
In the videos, Varma then gloated about how he “knows the reporters well,” and referenced a September interview with the New York Times on Mpox, which touted TPOXX as a drug used to treat Mpox infection.
Varma also described the World Health Organization’s “emergency authorization” process before explaining how he wants the media to report on TPOXX.
“So basically what we’re trying to get the media to say is, ‘Oh, the drug didn’t work because it was designed the wrong way. So they’re going to do another study, and it’ll probably work’ and in the meantime, people just prescribe it as an emergency drug. That’s what we want the story to be,” he said in the edited clip.
Varma added that the risk of Mpox spreading in the US is “very low” and is “almost certainly going to stay among gay men.”
“[Mpox] basically got into the sexual networks of gay men … and a lot of gay men have tons and tons of sexual partners and often don’t use condoms, so as a result, it’s spread more easily,” said the doctor, who previously boasted about hosting 10-person sex parties during the pandemic.
The identity of the woman Varma was speaking to — or where he met up with her — wasn’t clear. The nature of their relationship also wasn’t clear.
Additional reporting by Aneeta Bhole
