Washington Editor

WASHINGTON - The series of missteps surrounding the application process for ImClone Systems Inc.'s cancer drug, Erbitux, has forced the FDA to rethink some of its procedures.

Lester Crawford, the agency's deputy commissioner, has found himself in the unenviable position of responding to a congressional inquiry regarding the months and weeks leading up to an FDA refusal-to-file letter issued in December for Erbitux. Crawford began working for the FDA in February, and is expected run the agency until President Bush's nominee, Mark McClellan, assumes the position as director.

Members of the House Energy and Commerce Subcommittee on Oversight and Investigations Thursday questioned Crawford about specific drug-approval procedures and how some of them could be changed in order to help companies through the process and ultimately avoid another ImClone debacle.

Of particular interest to the subcommittee is the perception that former ImClone CEO Sam Waksal and his brother, Harlan Waksal, the current CEO, exaggerated the potential benefits of Erbitux, causing the company's stock price to reach as high as $70 a share. The company's position was further increased when it signed a landmark $2 billion deal with New York-based Bristol-Myers Squibb Co. to commercialize Erbitux in September 2001. (See BioWorld Today, Sept. 20, 2001.)

On Thursday, ImClone's stock (NASDAQ:IMCL) closed at $6.86, down 16 cents.

"They were out there hyping this drug and the FDA didn't say anything because its hands were tied?" asked Rep. Cliff Stearns (R-Fla.).

Stearns is referencing previous testimony by FDA officials who indicated a series of problems with the Erbitux rolling biologics license application (BLA), submitted last October. Several months ago, a senior FDA official told the subcommittee that she based her decision to grant Erbitux fast-track status on an outdated Phase II study. There was an implication that ImClone intentionally misled the FDA, a charge Harlan Waksal previously denied. (See BioWorld Today, June 14, 2002.)

Crawford reminded the committee that the Securities and Exchange Commission has jurisdiction over public companies that state mistruths about their business. But, he said, the FDA does have a certain amount of authority in that it can issue a "cease and desist" letter or it can suspend its review of an application if it determines that a company is making egregious claims.

Rep. Bart Stupak (D-Mich.) became annoyed when Crawford said ImClone was never issued such a letter. Stupak has long believed that the FDA lacks the necessary authority to take action against companies when they fail to comply with agency rules.

In defense of ImClone, Stearns asked whether some of the problems associated with the Erbitux application could have been avoided if the agency and company had met more frequently and engaged in more communication.

Since he wasn't part of the team that reviewed Erbitux, Crawford had difficulty answering the question beyond making the point that funds available under the reauthorized version of the Prescription Drug User Fee Act will allow the FDA to conduct additional meetings with companies in the drug-approval process. Furthermore, he said it's not difficult for companies with applications pending to get meetings with the FDA.

And in recent weeks, the agency introduced a plan to transfer some of the drug-approval procedures being conducted by the Center for Biologics Evaluation and Research to the Center for Drug Evaluation and Research in hopes of improving efficiency. (See BioWorld Today, Sept. 9, 2002.)

Crawford said it's too early to determine whether the final review of Erbitux will be conducted under the new system.

The latest news on Erbitux is that ImClone and Bristol-Myers Squibb are enrolling 250 people in a Phase II, multicenter, open-label study in patients with refractory metastatic colorectal cancer. (See BioWorld Today, Oct. 8, 2002.)

Crawford said the review process for Erbitux could be completed by as early as mid-2003.

Meanwhile, Sam Waksal reportedly is facing prison time on a number of felony charges including bank fraud, obstruction of justice and insider trading.

The company continues to operate and in recent months has enacted new insider-trading policies and has increased the number of officers who are required to file reports about their securities trading, according to Harlan Waksal's prepared testimony read to the subcommittee Thursday.

Indeed, according to subcommittee Chairman James Greenwood (R-Pa.), ImClone insiders sold $244 million in ImClone stock in the two months prior to the December FDA rejection letter, and the volume of trading Dec. 27 and 28 was "unusually high." (The rejection letter was issued Dec. 29.)

In her opening statement before the subcommittee, Catherine Vaczy, ImClone's vice president, legal and associate general counsel, said, "Regarding trading in company securities by officers and employees, we believe we have always had in place an appropriate insider-trading policy."