Samuel D. Waksal
|Samuel D. Waksal|
September 8, 1947 |
|Criminal charge||fraud, conspiracy, perjury|
|Criminal penalty||87 months imprisonment|
Samuel D. "Sam" Waksal (born September 8, 1947) is the founder and former CEO of the biopharmaceutical company ImClone Systems. He is also the founder 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 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.
Education and early career
Waksal was born September 8, 1947 in Paris, France as the son of Holocaust survivors. He earned a bachelor's degree in 1969 and a doctorate in immunobiology in 1974, both from The Ohio State University.
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. In September 2001, Bristol-Myers Squibb was intrigued enough by Erbitux to sign a $2 billion deal with the company in return for the marketing rights to the drug. In December 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. In 2004, Erbitux was approved by the FDA. In 2008, the drug generated over $1.5 billion in sales and was credited with aiding thousands of cancer patients. That same year, ImClone was sold to Eli Lilly and Company for $6.5 billion.
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.
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.
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. He was later transferred to the Federal Correctional Institution, Milan. On February 9, 2009, Waksal, Federal Bureau of Prisons (BOP) # 53803-054, was released from BOP custody.
In 2009, upon his release from prison Waksal began fundraising and launched the company Kadmon Pharmaceuticals in New York City. Waksal stepped down from the CEO position in 2014 as the company planned an IPO, because as part of his sentence he was barred from serving as an officer or director to any public company. With Waksal leaving the role, his brother Harlan began serving as CEO. Waksal remains with the company in the role of chief of innovation. In February 2016, Waksal left the Kadmon Pharmaceuticals but remained a shareholder in the company. In June 2016, the company announced it had filed the paperwork to undergo an IPO. In July 2016, the company raised $75 million in its IPO.
- "Former IMCloe Chief Acquires Drug Company". The New York Times. October 25, 2010. Retrieved September 5, 2016.
- "Waksal Gets 7-Plus Years". CNN Money. June 10, 2003. Retrieved September 5, 2016.
- "Samuel Waksal in Brief". The Baltimore Sun. October 15, 2002. Retrieved September 5, 2016.
- Stewart, James (2011). Tangled Webs: How False Statements are Undermining America: From Martha Stewart to Bernie Madoff. New York City: Penguin Press. ISBN 9781594202698.
- Pollack, Andrew (2002-01-24). "For ImClone Drug Entrepreneur, A Past of Celebrity and Notoriety". The New York Times. Retrieved 2012-04-04.
- Pollack, Andrew (February 13, 2004). "Technology; ImClone Cancer Drug Behind Martha Stewart Trial Is Approved by F.D.A.". The New York Times. Retrieved August 29, 2016.
- "Refusal to File Procedures for Biologic License Applications". US Department of Health and Human Services. Retrieved 9 December 2012.
- Kolker, Robert (March 15, 2009). "Sam Waksal was Right All Along*". New York Magazine. Retrieved August 29, 2016.
- Scannell, Kara (March 4, 2003). "Samuel Waksal Pleads Guilty to Evading Tax on Artwork". The Wall Street Journal. Retrieved September 5, 2016.
- Rose, Lacey. "Best Places to Go to Prison." Forbes. April 17, 2006. Retrieved on January 10, 2010.
- "Samuel Waksal." Federal Bureau of Prisons. Retrieved on January 10, 2010.
- Garde, Damian (February 2, 2016). "Waksal's Latest Biotech Play is Reportedly Trying to go Public After Two Misfires". FierceBiotech. Retrieved September 5, 2016.
- Pollack, Andrew (October 31, 2010). "ImClone Ex-Chief Embarks on New Biotech Venture". The New York Times. Retrieved September 5, 2016.
- Cyran, Robert (September 25, 2014). "Sam Waksal's New Biotech Venture Tests Investor Forgiveness". The New York Times. Retrieved September 5, 2016.
- Tirrell, Meg (February 2, 2016). "Waksal's Kadmon Said to Plan IPO, Without Waksal". CNBC. Retrieved September 5, 2016.
- Lash, Alex (June 13, 2016). "Kadmon Seeks IPO With Unusual Terms That Benefit Waksal, Debt Holders". Xconomy. Retrieved September 5, 2016.
- Carroll, John (June 10, 2016). "Sam Waksal Exited Kadmon With $25M Severance Deal Ahead of IPO". FierceBiotech. Retrieved September 5, 2016.
- Mukherjee, Sy (June 17, 2016). "Convicted Pharma Fraudster Waksal Calls Theranos a 'Scam'". Fortune. Retrieved September 5, 2016.
- Zuckerman, Gregory (July 26, 2016). "Redemption on Offer As Disgraced Executive Sam Wakssal's Startup Launches IPO". The Wall Street Journal. Retrieved September 5, 2016.
- Toobin, Jeffrey (22 March 2004). "A Bad Thing". The New Yorker. Retrieved 2 February 2016.
- ImClone Founder Pleads Guilty to Avoiding Sales Taxes, The New York Times, March 3, 2003
- ImClone founder Waksal sentenced to 7 years in prison, San Francisco Chronicle, June 10, 2003
- Sam Waksal: I Was Arrogant, CBS News, October 2, 2003
- Free Samuel Waksal argues that Waksal's insider trading should not be considered a crime and that he does not belong in jail
- Sam Waksal Political Contributions
- New York Post on his release from jail