SEC v. George N. Demos, No. 3:25-cv-00539, Southern District of California (Mar. 10, 2025) — Complaint

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CHARLES E. CANTER (Cal. Bar No. 263197)
Email:  [email protected]

Attorney for Plaintiff
Securities and Exchange Commission
Katharine E. Zoladz, Regional Director
Brent Wilner, Associate Regional Director
Douglas M. Miller, Regional Trial Counsel
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Telephone: (323) 965-3998
Facsimile: (213) 443-1904

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

vs.
GEORGE N. DEMOS,

 Defendant.
    Case    No.

COMPLAINT

Jury Trial Demanded

Plaintiff Securities and Exchange Commission (“SEC”) alleges:
SUMMARY
1. This case involves insider trading by Defendant George N. Demos
(“Demos”) in the securities of biopharmaceutical company Acadia Pharmaceuticals
Inc. (“Acadia”).  Demos, at the time of his trading, was Acadia’s Vice President of
Drug Safety and Pharmacovigilance, where he had access to material nonpublic
information.
2. Acadia developed the antipsychotic drug pimavanserin, sold under the
brand name NUPLAZID.  In 2016, the U.S. Food and Drug Administration (“FDA”)
'25CV0539JLBRSH

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approved NUPLAZID for the treatment of hallucinations and delusions associated
with Parkinson’s disease psychosis.  In June 2020, Acadia submitted to the FDA a
supplemental new drug application for NUPLAZID (“NUPLAZID application”) for
the treatment of hallucinations and delusions associated with dementia-related
psychosis.  Approval of the NUPLAZID application had the potential to significantly
expand the market for NUPLAZID.
3. On July 20, 2020, Acadia publicly announced that the FDA had accepted
the NUPLAZID application for filing and would respond to the application by
April 3, 2021.  Acadia did not publicly announce that the FDA further notified
Acadia that the FDA planned to communicate its own proposed labeling for
NUPLAZID for dementia-related psychosis by March 3, 2021, if no major
deficiencies were identified during the review.
4. As a core member of the NUPLAZID labeling team, Demos knew of the
March 3, 2021 date by which the FDA planned to communicate its proposed labeling,
and knew that the labeling team was scheduled to meet on March 4 to discuss any
FDA labeling requests.  But March 3 came and went, and Demos learned that the
March 4 meeting was rescheduled to March 5 because, Demos was told, Acadia
management was “not quite ready yet to discuss FDA feedback.”  The meeting was
again rescheduled to Monday, March 8, 2021, and finally to Tuesday, March 9, 2021.
As a result of his access to this non-public information, Demos concluded that the
FDA had made an adverse decision about the proposed labeling.
5. Demos knew, or was reckless in not knowing, that this information was
material and non-public and that he was prohibited from trading on the basis of it.
6. On the morning of March 8, 2021, Demos, based on this material
nonpublic information exercised nearly all his vested Acadia stock options and
immediately sold his shares.
7. Later that same day, just a few hours after Demos sold his shares, Acadia
issued an aftermarket press release announcing that the FDA had notified Acadia on

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March 3, 2021, that the FDA had identified deficiencies in the NUPLAZID
application that precluded discussion of labeling and other issues.  The next day, on
March 9, 2021, Acadia’s shares closed about 45% lower than they had closed on
March 8, before the press release.
8.  By trading on the basis of material nonpublic information, Demos
avoided about $1.3 million in losses.
9. By knowingly or recklessly engaging in the conduct alleged in this
complaint, Demos violated Section 17(a) of the Securities Act of 1933 (“Securities
Act”), 15 U.S.C. § 77q(a), and Section 10(b) of the Securities Exchange Act of 1934
(“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated under the
Exchange Act, 17 C.F.R. § 240.10b-5.  The SEC seeks permanent injunctions,
disgorgement of all ill-gotten gains with prejudgment interest, civil penalties, and an
officer and director bar.
JURISDICTION AND VENUE
10. The Court has jurisdiction over this action under Section 22(a) of the
Securities Act, 15 U.S.C. § 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21A, and
27(a) of the Exchange Act, 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u-1, 78aa.
11. The SEC brings this action under Sections 20(b) and 22(a) of the
Securities Act, 15 U.S.C. §§ 77t(d), 77v(a), and Sections 21(d) and 21A of the
Exchange Act, 15 U.S.C. §§ 78u(d), 78u-1.  Demos, directly or indirectly, made use
of the means or instrumentalities of interstate commerce, of the mails, or of the
facilities of a national securities exchange in connection with the transactions, acts,
practices, and courses of business alleged in this complaint.
12. Venue is proper in this district under Section 22(a) of the Securities Act
and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), because certain of the
transactions, acts, practices, and courses of conduct constituting violations of the
federal securities laws occurred within this district and because Demos resides in this
district.

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THE DEFENDANT
13. George N. Demos, age 64, is a resident of Rancho Santa Fe, California.
Demos is a medical doctor, though his medical license is expired.  Demos worked at
Acadia from October 15, 2014, to August 13, 2021, and in 2020, was promoted to
Vice President of Drug Safety and Pharmacovigilance.  He currently is a Vice
President at a publicly traded clinical-stage biotechnology company.
RELEVANT ENTITY
14. Acadia Pharmaceuticals Inc. is a Delaware corporation with its
principal place of business in San Diego, California.  Acadia is a biopharmaceutical
company focused on medications treating psychoses and neurological diseases.
Acadia’s common stock is registered under Section 12(b) of the Exchange Act and is
quoted on NASDAQ Stock Market under the ticker symbol “ACAD.”
THE ALLEGATIONS
A. Acadia seeks FDA approval of NUPLAZID for dementia-related
psychosis.
15. In 2016, NUPLAZID became Acadia’s first FDA-approved drug, which
Acadia began marketing and promoting for use in the treatment of hallucinations and
delusions associated with Parkinson’s disease psychosis.
16. NUPLAZID sales grew rapidly, from about $17 million in 2016 to
almost $442 million in 2020.
17. NUPLAZID’s FDA-approved label described the treatment of
Parkinson’s disease psychosis as NUPLAZID’s only indicated use.
18. Acadia, like other pharmaceutical companies, was prohibited from
promoting or marketing NUPLAZID’s use for any indication not described in the
product’s FDA-approved label.
19. Beginning in 2017, Acadia began evaluating NUPLAZID for use in the
treatment of hallucinations and delusions associated with dementia-related psychosis.
20. In October 2017, the FDA granted Acadia’s request for a Breakthrough

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Therapy Designation to pimavanserin, the active ingredient in NUPLAZID, for
dementia-related psychosis, indicating its potential as a substantial improvement over
other available drugs on the market.
21. In June 2020, after promising results in a clinical study, Acadia
submitted the NUPLAZID application requesting the FDA approve NUPLAZID for
an additional indicated use in the treatment of hallucinations and delusions associated
with dementia-related psychosis.
22. Because many more people suffer from dementia-related psychosis than
Parkinson’s disease psychosis, approval of the NUPLAZID application could have
significantly expanded the market for NUPLAZID.
23. On July 10, 2020, the FDA notified Acadia by letter that it had accepted
the NUPLAZID application for filing, and that the date by which the FDA expected
to complete its review of the application and notify Acadia if the application was
approved, was April 3, 2021.
24. The FDA’s July 2020 letter also informed Acadia that, if “major
deficiencies are not identified during the review, we plan to communicate proposed
labeling and, if necessary, any postmarketing requirement/commitment requests by
March 3, 2021.”
25. On or about July 20, 2020, Acadia publicly announced that the FDA had
accepted Acadia’s NUPLAZID for dementia-related psychosis application for filing,
with an “action date” of April 3, 2021. Acadia did not publicly disclose the March 3,
2021 labeling information date.
B. Demos receives material nonpublic information indicating that the FDA
will not provide a label for NUPLAZID for dementia-related psychosis.
26. As part of the NUPLAZID application, Acadia submitted proposed
labeling that expanded NUPLAZID’s label to include treatment of hallucinations and
delusions associated with dementia-related psychosis as an additional indicated use.
27. Demos was one of eight core members of the team Acadia had

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assembled to draft the proposed new labeling as part of the NUPLAZID application.
28. The March 3, 2021 proposed labeling response date was not public
knowledge, but Demos, as a core member of the labeling team, knew that the FDA
planned to communicate its proposed labeling information to Acadia on that date.
29. In the weeks before March 3, Demos and the labeling team began
planning and holding regular meetings to develop Acadia’s responses to potential
labeling proposals the FDA might make.
30. For example, on February 12, 2021, Acadia’s Executive Director of
Regulatory Affairs overseeing the NUPLAZID application (“Executive Director”)
emailed Demos: “Just wanting to touch base on the label and make sure we are ready
to duke it out with labeling negotiations.”
31. On February 24, the Executive Director emailed Demos and other
labeling team members to advise them that the FDA reported it was still on track to
provide its labeling communication around March 3.
32. In fact, even though Demos was scheduled to be on vacation from
March 1 through March 5, he planned to be available on March 3 in anticipation of
the FDA’s labeling communication expected that day.
33. A placeholder meeting of the labeling team was scheduled for March 4,
2021, which Demos planned to attend, to discuss the FDA’s potential labeling
feedback.
34. Instead of receiving proposed labeling on March 3, the Executive
Director received a letter from the FDA stating that deficiencies in the NUPLAZID
application precluded discussion of labeling at that time.
35. March 3 arrived, and Demos began to worry when he heard nothing
about the expected communication from the FDA.
36. At about 12:10 p.m. Pacific Time on March 3, Demos texted the
Executive Director, whom he would have expected to message him when the FDA
feedback arrived: “So anything? I’m in [a] ‘bad feeling’ state of mind[.]”

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37. A few minutes later, Demos’ manager also texted the Executive
Director: “What’s the word from [the] FDA?”
38. Before he received a response from the Executive Director, Demos
texted his manager: “Bad news I guess? [The Executive Director has] gone dark on
me....”
39. At about 2:30 p.m. Pacific Time (5:30 p.m. in the FDA’s time zone), the
Executive Director responded separately to both, first texting Demos, “And now
they’ve gone home for the day[,]” and then texting to Demos’ manager: “No label
yet...now they have gone home. Stay tuned...”
40. Demos’ manager forwarded the Executive Director’s response to Demos
via a group text that included another coworker with whom Demos and his manager
often discussed the NUPLAZID application.
41. On March 4, the labeling team meeting was postponed to March 5, and
Demos notified his coworkers in the group text.
42. Demos’ manager responded that “[n]o one has heard anything on our
end” and there had been “[a]nother day of radio silence.”
43. When Demos told the group that the March 4 labeling team meeting was
postponed to March 5, ostensibly because Acadia was “not quite ready yet to discuss
FDA feedback on the draft DRP [dementia-related psychosis] label,” Demos and his
coworkers discussed by group text that this message was inconsistent with the
Executive Director’s statement that there was “no label yet” from the FDA.
44. Demos responded to his coworkers’ group text: “Feedback was either
‘you’ve got to be kidding- try again with another well controlled study’ or NDD
[NUPLAZID for dementia-related psychosis] is not happening[.] Your label is
019/032 which is a marketing nightmare with aggression, agitation, and anxiety as
ADRs [adverse drug reactions] I’ll take that....”
45. On the morning of Friday, March 5, after telling the group that the
labeling team meeting for that day was canceled with an explanation from Acadia

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that “we haven’t received FDA feedback on DRP [dementia-related psychosis]
label,” Demos asked his coworkers in the group text, “How long can they hide?”
46. Demos’ manager responded: “Very worrisome now.”
47. Their coworker responded: “Yup. Assume clock is ticking and need to
say something soon.”
48. A few minutes later, Demos texted his coworkers: “This isn’t a bad
label[.] It’s no label....”
49. Later that day, the labeling team meeting was rescheduled for Monday,
March 8.
50. Over the weekend, on Sunday afternoon, March 7, the March 8 labeling
team meeting was rescheduled to Tuesday, March 9, again with an explanation that
Acadia had not yet received labeling feedback from the FDA.
51. On the morning of Monday, March 8, Demos texted his coworkers,
“So.... today’s labeling meeting moved to tomorrow....”
52. At about 9 a.m. Pacific Time, Demos texted his coworkers again, noting
that a different meeting on that day’s calendar, also concerning the NUPLAZID
application, “was just cancelled Lol[.]”
53. One of Demos’ coworkers replied, “They have to announce something
soon I would think[.]”
54. Demos knew, or was reckless in not knowing, that (1) the March 3, 2021
date by which Acadia expected labeling information from the FDA; (2) the days that
passed with Acadia repeatedly telling its employees that it had received “no label” or
“no feedback” on the proposed label from the FDA; (3) the continued postponement,
cancellation, and rescheduling of the labeling team meetings; and (4) the cancellation
of another NUPLAZID for dementia-related psychosis team meeting, was material
nonpublic information, which indicated there would be no label coming from the
FDA for NUPLAZID for dementia-related psychosis.
55. Demos also knew, or was reckless in not knowing, that he owed a duty

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of trust or confidence to keep the material nonpublic information he received
confidential, and to not trade on it.
56. Annually, and as recently as December 8, 2020, Demos certified that he
completed training on Acadia’s Code of Business Conduct and Ethics, which
expressly precluded trading Acadia stock on the basis of material nonpublic
information.
C. Demos sells Acadia stock on the basis of material nonpublic information.
57. As part of his compensation at Acadia, Demos was granted stock
options, which gave him the right, after the options vested, to buy specified numbers
of shares of Acadia stock at specified prices.
58. As of March 8, 2021, Demos held 64,599 vested option shares of
Acadia.
59. On March 8, 2021, at about 10:15 a.m. Pacific Time—a little over an
hour after discussing with his coworkers the NUPLAZID for dementia-related
psychosis meetings that had been rescheduled or canceled for that day—Demos
logged into his brokerage account, and at about 10:32 a.m. Pacific Time, Demos
exercised and sold 60,800 of his 64,599 vested option shares of Acadia, for an
average price of $46.62 per share.
60. Less than three hours later, after the 4:00 p.m. Eastern Time closure of
the NASDAQ market, Acadia announced that “the Company received a notification
from the U.S. Food and Drug Administration (FDA) on March 3, 2021, stating that,
as part of its ongoing review of the Company’s supplemental New Drug Application
(sNDA), the FDA has identified deficiencies that preclude discussion of labeling and
post-marketing requirements/commitments at this time.”
61. The next day, March 9, 2021, Acadia’s shares closed at $25.02 per share,
a decline of around 45% from the previous day’s close at $45.78 per share, on
volume more than 20 times its usual daily volume in the prior month.
62. By selling his shares in advance of the March 8 press release, Demos

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avoided losses of about $1,313,263.
FIRST CLAIM FOR RELIEF
Fraud in Connection with the Purchase or Sale of Securities
Violations of Section 10(b) of the Exchange Act and Rule 10b-5
63. The SEC realleges and incorporates by reference paragraphs 1 through
62 above.
64. Demos received material nonpublic information about the NUPLAZID
application in the course of his duties as Acadia’s Vice President of Drug Safety and
Pharmacovigilance and a core team member of the NUPLAZID labeling team.
Demos knew or was reckless in not knowing, that the information he possessed
concerning the NUPLAZID application was material nonpublic information.
65. As Acadia’s Vice President of Drug Safety and Pharmacovigilance and a
core team member of the NUPLAZID labeling team, Demos at all relevant times
owed a duty of trust or confidence to Acadia and its shareholders not to trade on the
basis of material nonpublic information about the NUPLAZID application.  Demos,
with scienter, breached that duty by trading Acadia stock on the basis of that material
nonpublic information on March 8, 2021.
66. By engaging in the conduct described above, Demos, directly or
indirectly, in connection with the purchase or sale of a security, by the use of means
or instrumentalities of interstate commerce, of the mails, or of the facilities of a
national securities exchange: (a) employed devices, schemes, or artifices to defraud;
(b) made untrue statements of a material fact or omitted to state a material fact
necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading; or (c) engaged in acts, practices, or
courses of business which operated or would operate as a fraud or deceit upon other
persons.
67. By engaging in the conduct described above, Demos violated, and unless
restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act,

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15 U.S.C. § 78j(b), and Rules 10b-5 thereunder, 17 C.F.R. § 240.10b-5.
SECOND CLAIM FOR RELIEF
Fraud in the Offer or Sale of Securities
Violations of Section 17(a) of the Securities Act
68. The SEC realleges and incorporates by reference paragraphs 1 through
62 above.
69. Demos learned material nonpublic information about the NUPLAZID
application in the course of his duties as Acadia’s Vice President of Drug Safety and
Pharmacovigilance and a core team member of the NUPLAZID labeling team.
Demos knew or was reckless in not knowing, that the information he possessed
concerning the NUPLAZID application was material nonpublic information.
70. As Acadia’s Vice President of Drug Safety and Pharmacovigilance and a
core team member of the NUPLAZID labeling team, Demos at all relevant times
owed a duty of trust or confidence to Acadia and its shareholders not to trade on the
basis of material nonpublic information about the NUPLAZID application.  Demos,
with scienter, breached that duty by trading Acadia stock on the basis of that material
nonpublic information on March 8, 2021.
71. By engaging in the conduct described above, Demos, directly or
indirectly, in the offer or sale of securities, by use of the means or instruments of
transportation or communication in interstate commerce or by use of the mails
(a) employed devices, schemes, or artifices to defraud; (b) obtained money or
property by means of untrue statements of a material fact or by omitting to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and (c) engaged in
transactions, practices, or courses of business which operated or would operate as a
fraud or deceit upon the purchaser.
72. By engaging in the conduct described above, Demos violated, and unless
restrained and enjoined will continue to violate, Section 17(a) of the Securities Act,

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15 U.S.C. § 77q(a).
PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that the Court:
I.
Issue findings of fact and conclusions of law that Demos committed the alleged
violations.
II.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
Civil Procedure permanently enjoining Demos and his officers, agents, servants,
employees, and attorneys, and those persons in active concert or participation with
him, who receive actual notice of the judgment by personal service or otherwise, and
each of them, from violating Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b),
and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5, and Section 17(a) of the
Securities Act, 15 U.S.C. § 77q(a).
III.
Order Demos to disgorge all funds received from his illegal conduct, together
with prejudgment interest thereon, under Exchange Act Sections 21(d)(5) and
21(d)(7), 15 U.S.C. §§ 78u(d)(5), 78u(d)(7).
IV.
Order Demos to pay civil penalties under Section 21A of the Exchange Act,
15 U.S.C. § 78u-1, and Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d).
V.
Enter an order against Demos, under Section 20(e) of the Securities Act, 15
U.S.C. § 77t(e), and Sections 2l(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2),
prohibiting him from acting as an officer or director of any issuer that has a class of
securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l or
that is required to file reports pursuant to Section 15(d) of the Exchange Act,
15 U.S.C. § 78o(d).

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VI.
Retain jurisdiction of this action in accordance with the principles of equity and
the Federal Rules of Civil Procedure to implement and carry out the terms of all
orders and decrees that may be entered, or to entertain any suitable application or
motion for additional relief within this Court’s jurisdiction.
VII.
Grant any other relief that this Court may determine to be just and necessary.
Dated:  March 7, 2025
  /s/ Charles E. Canter
Charles E. Canter
Attorney for Plaintiff
Securities and Exchange Commission

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CHARLES E. CANTER (Cal. Bar No. 263197) 
Email:  [email protected] 
 
Attorney for Plaintiff 
Securities and Exchange Commission 
Katharine E. Zoladz, Regional Director 
Brent Wilner, Associate Regional Director 
Douglas M. Miller, Regional Trial Counsel 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 
 
 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 
 

vs. 

GEORGE N. DEMOS,   
 

 Defendant. 

 Case No. 
 
 
COMPLAINT 
 
 
Jury Trial Demanded 

 
 

Plaintiff Securities and Exchange Commission (“SEC”) alleges: 

SUMMARY 

1. This case involves insider trading by Defendant George N. Demos 

(“Demos”) in the securities of biopharmaceutical company Acadia Pharmaceuticals 

Inc. (“Acadia”).  Demos, at the time of his trading, was Acadia’s Vice President of 

Drug Safety and Pharmacovigilance, where he had access to material nonpublic 

information.   

2. Acadia developed the antipsychotic drug pimavanserin, sold under the 

brand name NUPLAZID.  In 2016, the U.S. Food and Drug Administration (“FDA”) 

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approved NUPLAZID for the treatment of hallucinations and delusions associated 

with Parkinson’s disease psychosis.  In June 2020, Acadia submitted to the FDA a 

supplemental new drug application for NUPLAZID (“NUPLAZID application”) for 

the treatment of hallucinations and delusions associated with dementia-related 

psychosis.  Approval of the NUPLAZID application had the potential to significantly 

expand the market for NUPLAZID.   

3. On July 20, 2020, Acadia publicly announced that the FDA had accepted 

the NUPLAZID application for filing and would respond to the application by 

April 3, 2021.  Acadia did not publicly announce that the FDA further notified 

Acadia that the FDA planned to communicate its own proposed labeling for 

NUPLAZID for dementia-related psychosis by March 3, 2021, if no major 

deficiencies were identified during the review.  

4. As a core member of the NUPLAZID labeling team, Demos knew of the 

March 3, 2021 date by which the FDA planned to communicate its proposed labeling, 

and knew that the labeling team was scheduled to meet on March 4 to discuss any 

FDA labeling requests.  But March 3 came and went, and Demos learned that the 

March 4 meeting was rescheduled to March 5 because, Demos was told, Acadia 

management was “not quite ready yet to discuss FDA feedback.”  The meeting was 

again rescheduled to Monday, March 8, 2021, and finally to Tuesday, March 9, 2021. 

As a result of his access to this non-public information, Demos concluded that the 

FDA had made an adverse decision about the proposed labeling. 

5. Demos knew, or was reckless in not knowing, that this information was 

material and non-public and that he was prohibited from trading on the basis of it.   

6. On the morning of March 8, 2021, Demos, based on this material 

nonpublic information exercised nearly all his vested Acadia stock options and 

immediately sold his shares.  

7. Later that same day, just a few hours after Demos sold his shares, Acadia 

issued an aftermarket press release announcing that the FDA had notified Acadia on 

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March 3, 2021, that the FDA had identified deficiencies in the NUPLAZID 

application that precluded discussion of labeling and other issues.  The next day, on 

March 9, 2021, Acadia’s shares closed about 45% lower than they had closed on 

March 8, before the press release. 

8.  By trading on the basis of material nonpublic information, Demos 

avoided about $1.3 million in losses. 

9. By knowingly or recklessly engaging in the conduct alleged in this 

complaint, Demos violated Section 17(a) of the Securities Act of 1933 (“Securities 

Act”), 15 U.S.C. § 77q(a), and Section 10(b) of the Securities Exchange Act of 1934 

(“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated under the 

Exchange Act, 17 C.F.R. § 240.10b-5.  The SEC seeks permanent injunctions, 

disgorgement of all ill-gotten gains with prejudgment interest, civil penalties, and an 

officer and director bar. 

JURISDICTION AND VENUE 

10. The Court has jurisdiction over this action under Section 22(a) of the 

Securities Act, 15 U.S.C. § 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21A, and 

27(a) of the Exchange Act, 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u-1, 78aa. 

11. The SEC brings this action under Sections 20(b) and 22(a) of the 

Securities Act, 15 U.S.C. §§ 77t(d), 77v(a), and Sections 21(d) and 21A of the 

Exchange Act, 15 U.S.C. §§ 78u(d), 78u-1.  Demos, directly or indirectly, made use 

of the means or instrumentalities of interstate commerce, of the mails, or of the 

facilities of a national securities exchange in connection with the transactions, acts, 

practices, and courses of business alleged in this complaint.  

12. Venue is proper in this district under Section 22(a) of the Securities Act 

and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), because certain of the 

transactions, acts, practices, and courses of conduct constituting violations of the 

federal securities laws occurred within this district and because Demos resides in this 

district. 

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THE DEFENDANT 

13. George N. Demos, age 64, is a resident of Rancho Santa Fe, California. 

Demos is a medical doctor, though his medical license is expired.  Demos worked at 

Acadia from October 15, 2014, to August 13, 2021, and in 2020, was promoted to 

Vice President of Drug Safety and Pharmacovigilance.  He currently is a Vice 

President at a publicly traded clinical-stage biotechnology company. 

RELEVANT ENTITY  

14. Acadia Pharmaceuticals Inc. is a Delaware corporation with its 

principal place of business in San Diego, California.  Acadia is a biopharmaceutical 

company focused on medications treating psychoses and neurological diseases.  

Acadia’s common stock is registered under Section 12(b) of the Exchange Act and is 

quoted on NASDAQ Stock Market under the ticker symbol “ACAD.”      

THE ALLEGATIONS 

A. Acadia seeks FDA approval of NUPLAZID for dementia-related 

psychosis. 

15. In 2016, NUPLAZID became Acadia’s first FDA-approved drug, which 

Acadia began marketing and promoting for use in the treatment of hallucinations and 

delusions associated with Parkinson’s disease psychosis.   

16. NUPLAZID sales grew rapidly, from about $17 million in 2016 to 

almost $442 million in 2020.   

17. NUPLAZID’s FDA-approved label described the treatment of 

Parkinson’s disease psychosis as NUPLAZID’s only indicated use.   

18. Acadia, like other pharmaceutical companies, was prohibited from 

promoting or marketing NUPLAZID’s use for any indication not described in the 

product’s FDA-approved label.   

19. Beginning in 2017, Acadia began evaluating NUPLAZID for use in the 

treatment of hallucinations and delusions associated with dementia-related psychosis.   

20. In October 2017, the FDA granted Acadia’s request for a Breakthrough 

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Therapy Designation to pimavanserin, the active ingredient in NUPLAZID, for 

dementia-related psychosis, indicating its potential as a substantial improvement over 

other available drugs on the market. 

21. In June 2020, after promising results in a clinical study, Acadia 

submitted the NUPLAZID application requesting the FDA approve NUPLAZID for 

an additional indicated use in the treatment of hallucinations and delusions associated 

with dementia-related psychosis. 

22. Because many more people suffer from dementia-related psychosis than 

Parkinson’s disease psychosis, approval of the NUPLAZID application could have 

significantly expanded the market for NUPLAZID.   

23. On July 10, 2020, the FDA notified Acadia by letter that it had accepted 

the NUPLAZID application for filing, and that the date by which the FDA expected 

to complete its review of the application and notify Acadia if the application was 

approved, was April 3, 2021. 

24. The FDA’s July 2020 letter also informed Acadia that, if “major 

deficiencies are not identified during the review, we plan to communicate proposed 

labeling and, if necessary, any postmarketing requirement/commitment requests by 

March 3, 2021.”  

25. On or about July 20, 2020, Acadia publicly announced that the FDA had 

accepted Acadia’s NUPLAZID for dementia-related psychosis application for filing, 

with an “action date” of April 3, 2021. Acadia did not publicly disclose the March 3, 

2021 labeling information date. 

B. Demos receives material nonpublic information indicating that the FDA 

will not provide a label for NUPLAZID for dementia-related psychosis. 

26. As part of the NUPLAZID application, Acadia submitted proposed 

labeling that expanded NUPLAZID’s label to include treatment of hallucinations and 

delusions associated with dementia-related psychosis as an additional indicated use.   

27. Demos was one of eight core members of the team Acadia had 

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assembled to draft the proposed new labeling as part of the NUPLAZID application. 

28. The March 3, 2021 proposed labeling response date was not public 

knowledge, but Demos, as a core member of the labeling team, knew that the FDA 

planned to communicate its proposed labeling information to Acadia on that date. 

29. In the weeks before March 3, Demos and the labeling team began 

planning and holding regular meetings to develop Acadia’s responses to potential 

labeling proposals the FDA might make. 

30. For example, on February 12, 2021, Acadia’s Executive Director of 

Regulatory Affairs overseeing the NUPLAZID application (“Executive Director”) 

emailed Demos: “Just wanting to touch base on the label and make sure we are ready 

to duke it out with labeling negotiations.”  

31. On February 24, the Executive Director emailed Demos and other 

labeling team members to advise them that the FDA reported it was still on track to 

provide its labeling communication around March 3. 

32. In fact, even though Demos was scheduled to be on vacation from 

March 1 through March 5, he planned to be available on March 3 in anticipation of 

the FDA’s labeling communication expected that day. 

33. A placeholder meeting of the labeling team was scheduled for March 4, 

2021, which Demos planned to attend, to discuss the FDA’s potential labeling 

feedback. 

34. Instead of receiving proposed labeling on March 3, the Executive 

Director received a letter from the FDA stating that deficiencies in the NUPLAZID 

application precluded discussion of labeling at that time.   

35. March 3 arrived, and Demos began to worry when he heard nothing 

about the expected communication from the FDA.  

36. At about 12:10 p.m. Pacific Time on March 3, Demos texted the 

Executive Director, whom he would have expected to message him when the FDA 

feedback arrived: “So anything? I’m in [a] ‘bad feeling’ state of mind[.]”  

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37. A few minutes later, Demos’ manager also texted the Executive 

Director: “What’s the word from [the] FDA?” 

38. Before he received a response from the Executive Director, Demos 

texted his manager: “Bad news I guess? [The Executive Director has] gone dark on 

me….” 

39. At about 2:30 p.m. Pacific Time (5:30 p.m. in the FDA’s time zone), the 

Executive Director responded separately to both, first texting Demos, “And now 

they’ve gone home for the day[,]” and then texting to Demos’ manager: “No label 

yet…now they have gone home. Stay tuned…”  

40. Demos’ manager forwarded the Executive Director’s response to Demos 

via a group text that included another coworker with whom Demos and his manager 

often discussed the NUPLAZID application. 

41. On March 4, the labeling team meeting was postponed to March 5, and 

Demos notified his coworkers in the group text. 

42. Demos’ manager responded that “[n]o one has heard anything on our 

end” and there had been “[a]nother day of radio silence.”  

43. When Demos told the group that the March 4 labeling team meeting was 

postponed to March 5, ostensibly because Acadia was “not quite ready yet to discuss 

FDA feedback on the draft DRP [dementia-related psychosis] label,” Demos and his 

coworkers discussed by group text that this message was inconsistent with the 

Executive Director’s statement that there was “no label yet” from the FDA.   

44. Demos responded to his coworkers’ group text: “Feedback was either 

‘you’ve got to be kidding- try again with another well controlled study’ or NDD 

[NUPLAZID for dementia-related psychosis] is not happening[.] Your label is 

019/032 which is a marketing nightmare with aggression, agitation, and anxiety as 

ADRs [adverse drug reactions] I’ll take that….”  

45. On the morning of Friday, March 5, after telling the group that the 

labeling team meeting for that day was canceled with an explanation from Acadia 

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that “we haven’t received FDA feedback on DRP [dementia-related psychosis] 

label,” Demos asked his coworkers in the group text, “How long can they hide?”  

46. Demos’ manager responded: “Very worrisome now.”  

47. Their coworker responded: “Yup. Assume clock is ticking and need to 

say something soon.” 

48. A few minutes later, Demos texted his coworkers: “This isn’t a bad 

label[.] It’s no label….” 

49. Later that day, the labeling team meeting was rescheduled for Monday, 

March 8.  

50. Over the weekend, on Sunday afternoon, March 7, the March 8 labeling 

team meeting was rescheduled to Tuesday, March 9, again with an explanation that 

Acadia had not yet received labeling feedback from the FDA. 

51. On the morning of Monday, March 8, Demos texted his coworkers, 

“So…. today’s labeling meeting moved to tomorrow….” 

52. At about 9 a.m. Pacific Time, Demos texted his coworkers again, noting 

that a different meeting on that day’s calendar, also concerning the NUPLAZID 

application, “was just cancelled Lol[.]” 

53. One of Demos’ coworkers replied, “They have to announce something 

soon I would think[.]” 

54. Demos knew, or was reckless in not knowing, that (1) the March 3, 2021 

date by which Acadia expected labeling information from the FDA; (2) the days that 

passed with Acadia repeatedly telling its employees that it had received “no label” or 

“no feedback” on the proposed label from the FDA; (3) the continued postponement, 

cancellation, and rescheduling of the labeling team meetings; and (4) the cancellation 

of another NUPLAZID for dementia-related psychosis team meeting, was material 

nonpublic information, which indicated there would be no label coming from the 

FDA for NUPLAZID for dementia-related psychosis.  

55. Demos also knew, or was reckless in not knowing, that he owed a duty 

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of trust or confidence to keep the material nonpublic information he received 

confidential, and to not trade on it. 

56. Annually, and as recently as December 8, 2020, Demos certified that he 

completed training on Acadia’s Code of Business Conduct and Ethics, which 

expressly precluded trading Acadia stock on the basis of material nonpublic 

information. 

C. Demos sells Acadia stock on the basis of material nonpublic information.  

57. As part of his compensation at Acadia, Demos was granted stock 

options, which gave him the right, after the options vested, to buy specified numbers 

of shares of Acadia stock at specified prices. 

58. As of March 8, 2021, Demos held 64,599 vested option shares of 

Acadia. 

59. On March 8, 2021, at about 10:15 a.m. Pacific Time—a little over an 

hour after discussing with his coworkers the NUPLAZID for dementia-related 

psychosis meetings that had been rescheduled or canceled for that day—Demos 

logged into his brokerage account, and at about 10:32 a.m. Pacific Time, Demos 

exercised and sold 60,800 of his 64,599 vested option shares of Acadia, for an 

average price of $46.62 per share. 

60. Less than three hours later, after the 4:00 p.m. Eastern Time closure of 

the NASDAQ market, Acadia announced that “the Company received a notification 

from the U.S. Food and Drug Administration (FDA) on March 3, 2021, stating that, 

as part of its ongoing review of the Company’s supplemental New Drug Application 

(sNDA), the FDA has identified deficiencies that preclude discussion of labeling and 

post-marketing requirements/commitments at this time.” 

61. The next day, March 9, 2021, Acadia’s shares closed at $25.02 per share, 

a decline of around 45% from the previous day’s close at $45.78 per share, on 

volume more than 20 times its usual daily volume in the prior month. 

62. By selling his shares in advance of the March 8 press release, Demos 

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avoided losses of about $1,313,263. 

FIRST CLAIM FOR RELIEF 

Fraud in Connection with the Purchase or Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 

63. The SEC realleges and incorporates by reference paragraphs 1 through 

62 above. 

64. Demos received material nonpublic information about the NUPLAZID 

application in the course of his duties as Acadia’s Vice President of Drug Safety and 

Pharmacovigilance and a core team member of the NUPLAZID labeling team.  

Demos knew or was reckless in not knowing, that the information he possessed 

concerning the NUPLAZID application was material nonpublic information. 

65. As Acadia’s Vice President of Drug Safety and Pharmacovigilance and a 

core team member of the NUPLAZID labeling team, Demos at all relevant times 

owed a duty of trust or confidence to Acadia and its shareholders not to trade on the 

basis of material nonpublic information about the NUPLAZID application.  Demos, 

with scienter, breached that duty by trading Acadia stock on the basis of that material 

nonpublic information on March 8, 2021.  

66. By engaging in the conduct described above, Demos, directly or 

indirectly, in connection with the purchase or sale of a security, by the use of means 

or instrumentalities of interstate commerce, of the mails, or of the facilities of a 

national securities exchange: (a) employed devices, schemes, or artifices to defraud; 

(b) made untrue statements of a material fact or omitted to state a material fact 

necessary in order to make the statements made, in the light of the circumstances 

under which they were made, not misleading; or (c) engaged in acts, practices, or 

courses of business which operated or would operate as a fraud or deceit upon other 

persons. 

67. By engaging in the conduct described above, Demos violated, and unless 

restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act, 

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15 U.S.C. § 78j(b), and Rules 10b-5 thereunder, 17 C.F.R. § 240.10b-5. 

SECOND CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Section 17(a) of the Securities Act 

68. The SEC realleges and incorporates by reference paragraphs 1 through 

62 above. 

69. Demos learned material nonpublic information about the NUPLAZID 

application in the course of his duties as Acadia’s Vice President of Drug Safety and 

Pharmacovigilance and a core team member of the NUPLAZID labeling team.  

Demos knew or was reckless in not knowing, that the information he possessed 

concerning the NUPLAZID application was material nonpublic information. 

70. As Acadia’s Vice President of Drug Safety and Pharmacovigilance and a 

core team member of the NUPLAZID labeling team, Demos at all relevant times 

owed a duty of trust or confidence to Acadia and its shareholders not to trade on the 

basis of material nonpublic information about the NUPLAZID application.  Demos, 

with scienter, breached that duty by trading Acadia stock on the basis of that material 

nonpublic information on March 8, 2021.  

71. By engaging in the conduct described above, Demos, directly or 

indirectly, in the offer or sale of securities, by use of the means or instruments of 

transportation or communication in interstate commerce or by use of the mails 

(a) employed devices, schemes, or artifices to defraud; (b) obtained money or 

property by means of untrue statements of a material fact or by omitting to state a 

material fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and (c) engaged in 

transactions, practices, or courses of business which operated or would operate as a 

fraud or deceit upon the purchaser. 

72. By engaging in the conduct described above, Demos violated, and unless 

restrained and enjoined will continue to violate, Section 17(a) of the Securities Act, 

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15 U.S.C. § 77q(a). 

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court: 

I. 

Issue findings of fact and conclusions of law that Demos committed the alleged 

violations. 

II. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure permanently enjoining Demos and his officers, agents, servants, 

employees, and attorneys, and those persons in active concert or participation with 

him, who receive actual notice of the judgment by personal service or otherwise, and 

each of them, from violating Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), 

and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5, and Section 17(a) of the 

Securities Act, 15 U.S.C. § 77q(a). 

III. 

Order Demos to disgorge all funds received from his illegal conduct, together 

with prejudgment interest thereon, under Exchange Act Sections 21(d)(5) and 

21(d)(7), 15 U.S.C. §§ 78u(d)(5), 78u(d)(7).  

IV. 

Order Demos to pay civil penalties under Section 21A of the Exchange Act, 

15 U.S.C. § 78u-1, and Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d).  

V. 

Enter an order against Demos, under Section 20(e) of the Securities Act, 15 

U.S.C. § 77t(e), and Sections 2l(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2), 

prohibiting him from acting as an officer or director of any issuer that has a class of 

securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l or 

that is required to file reports pursuant to Section 15(d) of the Exchange Act, 

15 U.S.C. § 78o(d). 

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VI. 

Retain jurisdiction of this action in accordance with the principles of equity and 

the Federal Rules of Civil Procedure to implement and carry out the terms of all 

orders and decrees that may be entered, or to entertain any suitable application or 

motion for additional relief within this Court’s jurisdiction. 

VII. 

Grant any other relief that this Court may determine to be just and necessary. 

Dated:  March 7, 2025  

  /s/ Charles E. Canter  
Charles E. Canter 
Attorney for Plaintiff 
Securities and Exchange Commission 
 

 
 

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