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DePinho Apologizes For Investment Advice: On CNBC He Recommended A Firm He Founded
A recent television appearance by MD Anderson Cancer Center
President Ronald DePinho raises questions about the compatibility
of his multiple roles. He is at once, a state employee, a scientist and
a major shareholder in a publically traded company.
Appearing on the CNBC program “Closing Bell with Maria Bartiromo”
on May 18, DePinho was introduced as president of MD Anderson and
was asked to provide investment advice based on data that would be
presented at the upcoming annual meeting of the American Society of
Thus prompted, DePinho proceeded to extol the virtues of AVEO
Pharmaceuticals, a company he co-founded.
DePinho’s investment advice to CNBC viewers marks the second
cluster of conflicts of interest to emerge during his presidency. Recently,
top-level scientists objected to the decision by Texas officials to award a
one-year $18-million grant to a technology “incubator” co-directed by
DePinho’s wife, Lynda Chin, a scientist at his institution.
The proposal didn’t go through regular channels of review, either at
MD Anderson or at the state agency (The Cancer Letter, May 25).
Responding to questions about his CNBC appearance, DePinho said
that he had made a “mistake” by giving investment advice and discussing
his role in AVEO.
“I am a public official in a position of trust, and I should never comment
on any of my personal holdings or give investment advice,” he said to The
Cancer Letter. “It was a mistake for me to do so on the CNBC interview.”
DePinho blamed the medium.
“It was live TV,” he said. “It was a very fast-moving interview, which
in the context of what Maria and I were talking beforehand, versus what we
were talking on air, etc. It unfolded the way it did. And it will not happen again.”
Apologies notwithstanding, the episode illustrates failure on the part of
the University of Texas System to manage DePinho’s conflicts. Analysis of this
new cluster of conflicts has to start with AVEO.
The company’s stock may indeed be a good pick for some investors,
though probably not for widows and orphans. AVEO is developing a drug called
tivozanib, a tyrosine kinase inhibitor. If approved—and renal cancer experts say
that approval is not a sure thing—tivozanib would become drug No. 8 and the
fifth drug in its class for the treatment of this relatively rare disease.
According to federal filings, DePinho and his family trust hold 590,440
shares in AVEO. For three days preceding DePinho’s appearance on CNBC, AVEO’s
stock price had been in a free-fall, trading at $11.28 per share just before DePinho
went on camera.