(Bloomberg) -- Republican congressman Chris Collins’ hot biotechnology stock pick just went south.
Collins suffered a paper loss of A$22 million ($16.7 million) after Innate Immunotherapeutics Ltd. said a mid-stage trial of its experimental treatment for multiple sclerosis showed no effect in helping patients. The New York congressman is the biggest shareholder in the Australian drugmaker. After the data was reported Tuesday, the shares fell 92 percent in Sydney to less than 5 Australian cents.
Innate’s stock, sold in an initial public offering in December 2013, had gradually risen through 2016 before soaring early 2017 to peak at $1.77 on Jan. 25.
Collins’ office didn’t return a call seeking comment.
Collins, one of President Donald Trump’s lead supporters in Congress, came under fire early this year for investing in the Sydney-based company while sitting on a House committee that oversees health-care policy. He personally owned about 17 percent of Innate’s shares, sits on the board of directors, and his children are also among the largest holders.
Some of Collins’ colleagues in Congress have also been getting into the company: Tom Price, now the Secretary of Health and Human Services, told Congress that he invested in the company in a discounted stock offering after Collins told him about it. And four other Republican House members bought shares in early 2017: Mike Conaway, Doug Lamborn, Billy Long and Markwayne Mullin. Price sold his shares in February.
The Office of Congressional Ethics is probing what role Collins, who has been an investor in Innate for 15 years, played in attracting investors to the company, the Buffalo News reported last month, citing people familiar with the matter.
A spokeswoman for Congressman Long said Tuesday that the lawmaker didn’t learn of Innate through a colleague, but rather through the news in January. The offices of Conaway, Lamborn and Mullin didn’t immediately return calls seeking comment.
It’s not that uncommon for U.S. lawmakers who sit on committees that handle health issues to hold investments in drug or health services companies. Almost a quarter of them do, according to a Bloomberg BNA analysis in January.
Collins owned 37.9 million Innate shares as of December, according to data compiled by Bloomberg, with his children holding 5.2 million shares each.
Members of the House must report certain securities transactions over $1,000 within 30 days of notice of the transaction, or not later than 45 days after the transaction itself. This year, Collins has filed one transaction form, in April: It didn’t include Innate, meaning his holding hadn’t changed at the time.