Houston Congressman's Stock Purchase Under Scrutiny: Update

HOUSTON, TX — Innate Immunotherapeutics, a little-known Australian biotech firm that is testing a drug it hopes will successfully treat some symptoms of multiple sclerosis, is getting coverage in the American media, but not for the reasons the company hoped for.

Texas U.S. Rep. John Culberson purchased shares in the firm in January, a day after the company's price spiked. Insider trading suspicions are swarming around the company's shares, and Culberson — along with a half-dozen other House Republicans who took positions in the stock, some within hours or days of one another — are caught up in the maelstrom.

In addition to Culberson, Texas Republican Rep. Mike Conaway also bought shares in the company, whose largest investor is New York Rep. Chris Collins. Collins is reportedly being investigated by the Office of Congressional Ethics in relation to his holdings in Innate.

Innate's share price spiked at an all-time high of $1.83 (Australian dollars) on Jan. 25, and closed at 4.6 cents a share on June 27. Recent clinical trial results have proved disappointing for the company's drug.

Culberson has said that his interest in the drug, and Innate, was sparked by "press reports," but the Houston politician has not said which reports he was referring to. As reported by the Houston Chronicle and other publications, at the time Culberson and Conaway bought their shares, news reports about Innate were focused on purchases of the stock made by Collins and then-Georgia Rep. Tom Price, who now heads the U.S. Department of Health and Human Services.

The Hill newspaper reported earlier this month that at least a half-dozen GOP lawmakers had reported hearing Collins "talking up" Innate at various time. The quoted lawmakers spoke anonymously.

Culberson, 60, who purchased between $1,000 and $15,000 of the stock on Jan. 26, is facing a challenge to his seat — which he has held for nine terms — in the form of Dr. Jason Weston, a research physician at MD Anderson Cancer Center. Weston has made public queries about Culberson's interest in the company, which back in January was mostly unknown.

A call to Culberson's office for comment was not immediately returned.

For more, see the story at the Houston Chronicle

Correction: June 29, 2017: Rep. Culberson purchased shares in Innate one day after the price of the stock spiked, not one day before, as this story originally reported.

— Image: Office of John Culberson