Samuel D. Waksal : biography
Samuel D. "Sam" Waksal, Ph.D., (born 8 September 1947) is the founder and former CEO of the biopharmaceutical company ImClone Systems. He is also the founder and CEO of Kadmon Pharmaceuticals which was financed with private capital and commenced operations in New York City in 2010. At ImClone, Waksal led the company to develop the landmark cancer drug Erbitux (cetuximab). During the course of its review process with Food and Drug Administration (FDA) Waksal became involved in an insider trading scandal revolving around improper communications with personal friends and family members. He was convicted of several securities violations, served time in federal prison, and was released.
On January 23, 2011, Mr. Waksal was interviewed by Maria Bartiromo on Wall Street Week. At that time, he declared his intention to start a new biotech company. He is currently the chairman and CEO of Kadmon Pharmaceuticals in New York City.
Education and early career
Samuel Waksal was born September 8, 1947 in Paris, France as the son of Holocaust survivors. Waksal earned a bachelor’s degree in 1969 and a doctorate in immunobiology in 1974, both from The Ohio State University.
Over the next 15 years, he worked as a medical researcher at Stanford University, the National Cancer Institute, Tufts University and Mount Sinai Hospital, New York. However, his academic career was plagued by numerous ethical problems, including misrepresenting the source of material and fabricating lab results.
Undaunted, Waksal founded ImClone in 1984. The company was engaged in several research and development projects before filing its first Biologic License Application with the FDA in 2001. When it won the rights to develop Erbitux, a cancer antibody, the drug’s clinical success caused ImClone’s stock to reach a high of $70 a share. Bristol-Myers Squibb was intrigued enough by Erbitux to buy a large stake in the company in return for the rights to the drug. In December of 2001 however the FDA issued a Refuse to File decision effectively turning down ImClone’s application due to concerns about the structure of the clinical trials.
Criminal activity and conviction
Waksal became aware of the FDA’s rejection on Christmas Day 2001. Unable to get the FDA to reconsider, ImClone began drafting a press release announcing the Erbitux rejection. This was due to be released at the close of business on December 28. Until then, under federal securities law, Waksal was barred from selling his ImClone stock or telling anyone about the pending rejection. However public release of the Erbitux rejection would open up a number of financial problems. It would also expose the fact he had pledged a warrant to buy ImClone shares as collateral for a loan from Bank of America despite having already executed the warrant in 2000. If Bank of America discovered the warrant was no longer valid Waksal could be charged with bank fraud. He tipped off several of his friends and family to sell their ImClone stock. When Waksal’s broker at Merrill Lynch, Peter Bacanovic, became aware of the pending rejection he alerted their mutual friend, Martha Stewart, that ImClone was about to lose a good deal of its value.
Waksal was arrested June 12, 2002 on insider trading charges. On October 15, he pleaded guilty to charges of securities fraud, bank fraud, obstruction of justice, and perjury.
On March 3, 2003 he pleaded guilty to charges of conspiracy and wire fraud for avoiding $1.2 million in sales taxes on $15 million in artwork. The art included works by Mark Rothko, Richard Serra, Roy Lichtenstein, and Willem de Kooning, purchased between June 2000 and October 2001. He did not pay the necessary taxes at the time of purchase, but did pay the taxes in the Fall of 2002.
On June 10, 2003, Waksal was sentenced to seven years and three months in prison and ordered to pay more than $4 million in fines and back taxes, all the maximum punishments allowable under law. Waksal wanted to go to Federal Prison Camp, Eglin, but instead he went to Federal Correctional Institution, Schuylkill.Rose, Lacey. "." Forbes. April 17, 2006. Retrieved on January 10, 2010. He was later transferred to the Federal Correctional Institution, Otisville in New York state. Waksal, Federal Bureau of Prisons (BOP) # 53803-054, was released from BOP custody on February 9, 2009."." Federal Bureau of Prisons. Retrieved on January 10, 2010.