ImClone Systems

ImClone Systems Incorporated (NasdaqNM|IMCL) is a biopharmaceutical company dedicated to developing biologic medicines in the area of oncology. It was founded in 1984 and is headquartered in New York City. It is traded on the NASDAQ stock exchange under the symbol IMCL. On October 6, 2008, it accepted a $6.5 billion acquisition offer from Eli Lilly and Company. The deal is expected to close in late 2008 or early 2009. [http://www.nytimes.com/2008/10/07/business/07drug.html?_r=1&ref=business&oref=slogin]

Insider trading scandal

ImClone's stock price dropped sharply at the end of 2001 when its drug Erbitux, an experimental monoclonal antibody failed to get the expected Food and Drug Administration (FDA) approval. It was later revealed by the U.S. Securities and Exchange Commission that numerous executives sold their stock before the announcement of the decision after the close of trading on December 28.

Its founder, Samuel D. Waksal, was arrested in 2002 on insider trading charges for informing friends and family to sell their stock, and attempting to sell his own. His daughter, Aliza Waksal, sold $2.5 million in shares on December 27. His father, Jack Waksal, sold $8.1 million in shares over the 27th and 28th. Company executives followed suit. John B. Landes, the general counsel, sold $2.5 million in shares on December 6. Ronald A. Martell, the vice president for marketing and sales, sold $2.1 million in shares on December 11. Four other executives sold shares in the following weeks as well. Later, founder Waksal pleaded guilty to various charges, including securities fraud, and on June 10, 2003, was sentenced to seven years and three months in prison.

Martha Stewart, the founder of Martha Stewart Living Omnimedia (Waksal had dated Stewart's daughter) also became embroiled in the scandal after it emerged that she sold about $230,000 in ImClone shares on December 27, just a day before the announcement of FDA decision. Although Stewart maintained her innocence, she was found guilty and sentenced on July 16, 2004 to five months in prison, five months of home confinement, and two years probation for lying about a stock sale, conspiracy, and obstruction of justice.

Ultimately a new clinical trial and FDA filing prepared by Imclone's partner Merck KGaA ("German Merck," not to be confused with the US company of similar name) resulted in an FDA approval of Erbitux in 2004 for use in colon cancer.

A Congressional hearing on improprieties at ImClone, held in October 2002, unveiled a culture of corruption dating back to 1986. This was the year that ImClone CEO Waksal first forged the signature of the company's general counsel John Landes (one of the three original employees of the company) for financial gain. Nonetheless, Landes defended Waksal's illegal actions at the hearings before the Subcommittee on Oversight and Investigations, portraying the forgery as "a good-faith misunderstanding," to which Representative James Greenwood replied "My children know better than that, Mr. Landes." Further questioning about this and subsequent forgeries on Waksal's part revealed that neither Landes, the chief legal officer of the company, or the company's outside directors reported Waksal's actions to proper authorities or made any moves to have Waksal removed as CEO. Instead, testimony revealed that they initiated their own internal investigation, which was never concluded. The decades-long tolerance for Waksal's fraud, starting from the company's earliest days, provoked Representative Peter Deutsch to refer to the ongoing misconduct as "wacky."

The FDA's February 2004 announcement of approval for use of Erbitux for treatment of colrectal cancer reported that conclusions were drawn from a trial involving 329 patients, of which 10.8% responded when Erbitux was used by itself, delaying tumor growth by 1.5 months. When used in conjunction with a standard treatment irinotecan, 22.9% of patients responded and tumor growth was delayed by approximately 4.1 months.

In September 2001, Bristol-Myers Squibb committed $2 billion (including a $1 billion up-front cash payment) for less than 20% of ImClone due to what was called at the time the drug's "blockbuster" potential.

In January 2006, the company was put up for sale but failed to find any buyers, likely due to the fact that Erbitux by that time faced significant competition in the medical marketplace. ImClone directors withdrew the sale of the company in mid-2006.

In April 2007, The Wall Street Journal reported that "Bristol-Myers Squibb Co. and ImClone Systems Inc. said their cancer drug, Erbitux, failed to significantly prolong the lives of people with pancreatic cancer in a new study, marking yet another setback in the drug industry's efforts to find a better treatment for this deadly disease."

Compassionate use controversy

The FDA approved the aforementioned colorectal cancer drug, Erbitux, on February 12, 2004. In May 2001, while ImClone was still seeking approval for the drug (then known as IMC-C225), the CBS news program "60 Minutes" aired a story about two cancer patients' struggles to obtain "compassionate use" of the drug. One ultimately succeeded; the other failed despite repeated pleas to ImClone officials. It was alleged in the story that ImClone was arbitrary in who received the drug and had no written criteria for compassionate use.

Carl Icahn acquisition

On October 25, 2006, a group led by billionaire investor Carl Icahn acquired a majority of stock thereby giving him control of the board. Within hours of the announcement, interim CEO Joseph Fischer resigned, and Icahn announced that other members of the Board of Directors would not be re-elected.

Takeover offer from Bristol-Myers Squibb, and subsequent bidding showdown

On July 31, 2008, Bristol-Myers Squibb offered to take over ImClone for $60 a share cash. The offer was made by letter addressed to ImClone's chairman of the board, Carl Icahn.

On September 10, 2008, An undisclosed company and CEO offered to take over ImClone for $70 a share, financing approach was not disclosed. The offer is conditioned on the results of a due diligence review of ImClone's business and technology by the undisclosed party, to be completed September 28th, 2008.

On September 23, 2008, Bristol-Myers Squibb upped its offer to take over ImClone to $62 a share. In addition, Bristol threatened to take the offer to the share holders for a proxy battle with the intention of replacing the current Board of Directors headed by Carl Icahn.

On October 6, 2008, Imclone agreed to be acquired by Eli Lilly for $6.5 billion ($70/share).

ee also

* ImClone stock trading case
* Accounting scandals
* Corporate abuse

External links

* [http://www.imclone.com/ ImClone Systems]

Articles

* [http://aolsvc.health.webmd.aol.com/content/article/33/1728_81850.htm Dying Patients Find Experimental Drugs Hard to Get.] , "WebMD Medical News," June 20, 2001
* [http://www.fda.gov/ola/2001/compassionateuse0620.html. Statement by Robert Temple, M.D., Associate Director for Center for Drug Evaluation and Research, Food and Drug Administration.] , "The Committee on Government Reform, U.S. House of Representatives," June 20, 2001
* [http://www.boston.com/yourlife/health/diseases/articles/2003/09/23/for_some_untested_drug_is_a_last_chance/ For some, untested drug is a last chance.] , "The Boston Globe", September 23, 2003
* [http://web.archive.org/web/20050326061406/http://energycommerce.house.gov/107/hearings/06132002Hearing587/print.htm An Inquiry into the ImClone Cancer-Drug Story.] , "U.S. House Committee on Energy and Commerce, Subcommittee on Oversight and Investigations", June 13, 2002
* [http://www.cbsnews.com/stories/2001/05/03/60minutes/main289212.shtml Controversial Compassionate Use.] , "60 Minutes", May 3, 2001
* [http://www.findarticles.com/cf_dls/m0EIN/2001_Dec_28/81172317/p1/article.jhtml ImClone Systems Incorporated Announces Decision by The FDA Not To Accept For Filing The ERBITUX Biologics License Application.] , "BusinessWire", December 28, 2001
* [http://www.nytimes.com/2002/07/15/business/15XSELL.html ImClone Stock Sales Disclosed] , "The New York Times", July 15, 2002
* [http://www.nytimes.com/2002/07/15/business/15MART.html A Closer Look at Martha Stewart's Trades] , "The New York Times", July 15, 2002
* [http://www.nytimes.com/2003/03/03/business/03CND-MARTHA.html ImClone Founder Pleads Guilty to Avoiding Sales Taxes] , "The New York Times", March 3, 2003
* [http://sfgate.com/cgi-bin/article.cgi?f=/news/a/2003/06/10/national1256EDT0601.DTL ImClone Founder Waksal Sentenced to 7 Years in Prison] , "San Francisco Chronicle", June 10, 2003
* [http://www.msnbc.msn.com/id/5444565 'I will be back,' Stewart vows after sentencing] , "AP", July 17, 2004

FDA

* [http://www.fda.gov/bbs/topics/NEWS/2004/NEW01024.html FDA Approves Erbitux for Colorectal Cancer] , February 12, 2004

Data

* [http://biz.yahoo.com/ic/15/15468.html Yahoo! - ImClone Systems Incorporated Company Profile]
* [http://money.cnn.com/quote/quote.html?shownav=true&symb=IMCL Today's stock price and chart]

References


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • ImClone stock trading case — A U.S. Securities and Exchange Commission and U.S. Attorney probe of trading in the shares of ImClone Systems resulted in a widely publicized criminal case, which resulted in prison terms for media celebrity Martha Stewart, ImClone chief… …   Wikipedia

  • IMCL — Imclone Systems Corporation (delisted) (Business » NASDAQ Symbols) …   Abbreviations dictionary

  • Cetuximab — Vorhandene Strukturdaten …   Deutsch Wikipedia

  • Erbitux — Cetuximab Größe 145,8 kDa Bezeichner Externe IDs CAS Nu …   Deutsch Wikipedia

  • Joseph Schlessinger — Joseph Schlessinger, Ph.D. is Chair of the Pharmacology Department at Yale University School of Medicine in New Haven, Connecticut. His area of research is signaling through tyrosine phosphorylation which is important in many areas of cellular… …   Wikipedia

  • Economic Affairs — ▪ 2006 Introduction In 2005 rising U.S. deficits, tight monetary policies, and higher oil prices triggered by hurricane damage in the Gulf of Mexico were moderating influences on the world economy and on U.S. stock markets, but some other… …   Universalium

  • Law, Crime, and Law Enforcement — ▪ 2006 Introduction Trials of former heads of state, U.S. Supreme Court rulings on eminent domain and the death penalty, and high profile cases against former executives of large corporations were leading legal and criminal issues in 2005.… …   Universalium

  • Martha Stewart — For the actress born in 1922, see Martha Stewart (actor). Martha Stewart Stewart at the 2011 Tribeca Film Festival Vanity Fair party Born Martha Helen Kos …   Wikipedia

  • Samuel D. Waksal — Infobox Criminal subject name = Samuel D. Waksal image size = image caption = date of birth = September 8, 1947 place of birth = Paris, France date of death = place of death = charge = fraud, conspiracy, perjury penalty = 87 months imprisonment… …   Wikipedia

  • Cetuximab — ? Monoclonal antibody Type Whole antibody Source Chimeric (mouse/human) Target EGF receptor Clinical data AHFS/Drugs.com …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.