WASHINGTON A House committee on Friday said it will investigate New York-based ImClone Systems Inc.’s conduct in the development of its well-publicized drug for colorectal cancer.
House Energy and Commerce Committee Chairman Billy Tauzin (R-La.) and Oversight and Investigations Subcommittee Chairman James Greenwood (R-Pa.) have requested records and interviews related to clinical research of Erbitux (C225 or cetuximab). Erbitux has not been approved by the FDA.
Based on media accounts of an FDA “refuse-to-file” letter written to ImClone in late December, Tauzin and Greenwood have raised concerns that ImClone executives did not give investors and Wall Street analysts a full picture of problems related to Erbitux.
Samuel Waksal, ImClone’s president and CEO, could not be contacted by phone Friday. However, Jason Farber, a spokesman for the company, said, “We’ve received the request for information and we are cooperating.”
Tauzin and Greenwood outlined a series of questions related to Erbitux in letters sent to Samuel Waksal; Bernard Schwetz, acting commissioner of the FDA; and Peter Dolan, chairman and CEO of Bristol-Myers Squibb Co. in New York. Bristol-Myers Squibb is ImClone’s partner in development of Erbitux.
The controversy surrounding this promising drug hit a peak Dec. 28 when the FDA failed to accept ImClone’s rolling biologics license application for Erbitux. (A rolling application allows a company to submit its BLA in sections, if certain FDA criteria are met.)
Waksal responded by holding a conference call in which he told upwards of 800 listeners that the BLA was missing a “train of documentation” and that the company could rectify the situation by the end of the first quarter. (See BioWorld Today, Jan. 3, 2002.)
The poor news, characterized by Waksal as a “setback,” caused ImClone’s stock to fall 6.7 percent, or $3.13, to close at $43.33.
Friday, the company’s stock (NASDAQ:IMCL) closed at $21.15, down $8.93, or 29.7 percent.
But on Jan. 4, the Cancer Letter published excerpts from the RTF letter indicating that the problems with Erbitux were more than a mere “setback,” according to the Tauzin-Greenwood letter written to the companies and the FDA.
In particular, the letter suggests that the FDA had warned ImClone last August that its data would have to demonstrate that the drug Campostar was needed along with Erbitux. Those data were never submitted, according to the letter.
Furthermore, the FDA cited protocol violations in the clinical trials, specifically that the company reported three deaths within a month of the last Erbitux treatment compared to 21 identified by the FDA.
At the JPMorgan H&Q Healthcare conference two weeks ago, Waksal reportedly said ImClone put together a “faulty package and screwed up” by failing to provide proper documentation, according to the Tauzin-Greenwood letter, rather than more fully disclosing the extent of the problems.
Furthermore, according to the Jan. 9, 2002, edition of the Wall Street Journal, on Dec. 6, Harlan Waksal, ImClone’s chief operating officer, disposed of 700,000 ImClone shares valued at about $71 a share, or about $50 million in total.
On Oct. 29, ImClone executives and directors sold a combined 2.1 million company shares to Bristol-Myers for $150 million. Samuel Waksal sold 814,674 shares and Harlan Waksal sold 776,450 shares, or just more than 20 percent of each of their holdings, in the first sale by either executive since the mid-1990s. The sales were part of a tender offer by Bristol-Myers at the end of October in connection with the strategic agreement with ImClone.
Erbitux is an investigational monoclonal antibody designed to target and block the epidermal growth factor receptor.
ImClone was founded in 1986 by Samuel and Harlan Waksal, who are brothers. The company went public in 1991, raising $35 million, following a failed attempt in 1987.