By the time former ImClone Systems Inc. CEO Samuel Waksal gets out of prison, the cancer drug he helped develop could be on the market.
While a U.S. District Court judge in Manhattan was sentencing Waksal to seven years and three months Tuesday on charges related to insider trading, securities fraud and bank fraud, ImClone and its partner, Bristol-Myers Squibb Co., were no doubt working on the biologics license application for Erbitux (cetuximab) in colorectal cancer.
Waksal, a 55-year-old immunologist, must report to prison July 2. He also has been ordered to pay a little more than $4 million in fines and restitution.
Aside from charges related to events at ImClone, Waksal had to answer to conspiracy and wire fraud charges for evading $1.2 million in sales taxes stemming from art purchases over three years. (See BioWorld Today, Jan. 3, 2002; Jan. 27, 2002; Feb. 28, 2002; and Oct. 18, 2002.)
Last fall the doctor pleaded guilty to six counts including bank fraud, securities fraud, conspiracy to obstruct justice and perjury. Prior to Tuesday's sentencing, he had agreed to pay an $800,000 fine and never serve as an executive of a public company again.
Meanwhile, over at ImClone, no one is talking.
David Pitts, spokesman for the New York-based company, told BioWorld Today officials at ImClone had no official comment.
Since early 2002 when it was discovered that Waksal had advised his family and friend Martha Stewart to dump ImClone's stock ahead of the FDA's rejection of a rolling BLA for Erbitux, the company has been surrounded by scandal. To make matters worse, ImClone officials, including Waksal's brother and co-founder, Harlan Waksal, were unable to file their 2002 Form 10-K because they couldn't finalize audited financial statements after discovering Samuel had failed to withhold $60 million in taxes on executive stock options. At the time, Harlan was CEO, but ended up stepping aside and becoming chief scientific officer. (See BioWorld Today, May 1, 2003.)
Despite all this negative news, the company's stock began inching up on rumors that European partner Merck KGaA, of Darmstadt, Germany, recorded positive results on a pivotal Phase II trial of Erbitux. The stock was trading at about $9 in February. By comparison, on Tuesday the stock (NASDAQ:IMCLE) closed at $36.30 up 84 cents.
Merck's study demonstrated that Erbitux (cetuximab) in combination with irinotecan slowed progression of colorectal cancer, shrinking tumors by 50 percent or more in 22.9 percent of patients. (See BioWorld Today, June 3, 2003.)
After the Merck news broke, ImClone said it was ready to file another BLA sometime later this year.
Given ImClone's history with the FDA, when asked whether BMS would take a leadership role in preparing the BLA, Pitts said "no."
"The companies are working in a partnership, but ImClone will be submitting the BLA. Certainly there's a lot of dialogue between these two companies, and it is certainly a healthy dialogue. Bristol's resources are being put to use, but ImClone remains the company that will file the BLA," he said.
When Samuel Waksal spoke with investors, analysts and reporters following the FDA's rejection of the first BLA just after Christmas 2001, he said the failure was based on a missing "train of documentation," implying it was an easy fix.
But once the House Energy and Commerce Committee got its hands on the case, it became apparent that there was a little more to it.
According to committee members, ImClone misled the FDA about the protocol in its Phase II study, and submitted an amended version complete with patients who were ineligible for the trial. ImClone had been criticized early on for failing to compare Erbitux to Campostar. (See BioWorld Today, June 14, 2002; June 18, 2002; and Jan. 22, 2002.)