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Former ImClone Chief Acquires Drug Company Three Rivers Pharma
Published: October 25, 2010
Samuel D. Waksal, the biotechnology executive whose insider trading landed him and his friend Martha Stewart in prison, is trying to make a comeback.
Mr. Waksal's new company, Kadmon Pharmaceuticals, announced on Monday that it had acquired Three Rivers Pharmaceuticals, a privately held company in Warrendale, Pa., that mainly sells drugs to treat hepatitis C. The price was more than $100 million, said David M. F. Pitts, a spokesman for Kadmon, which is based in New York.
Mr. Waksal, the founder and chief executive of ImClone Systems, was sentenced in 2003 to seven years and three months in prison for insider trading and other crimes. He alerted family members to sell their ImClone stock and tried to sell his own shortly before the company announced that the Food and Drug Administration was not going to approve its cancer drug.
Ms. Stewart also sold her ImClone stock and received a five-month prison sentence for lying to federal investigators about the sale.
But the cancer drug, Erbitux, eventually did win approval, and in 2008, ImClone was acquired by Eli Lilly & Company for $6.5 billion. Free since early 2009 after serving about five years, Mr. Waksal has been trying to raise money for Kadmon, which is privately held, and to acquire drugs for it to develop and sell. Mr. Waksal is prohibited by a settlement he made with the Securities and Exchange Commission from serving as a director or executive of a publicly traded company.
Mr. Pitts said Kadmon had acquired a company with antiviral technology called Flux Therapeutics co-founded by a Princeton professor, Thomas E. Shenk. Kadmon also bought a company called PhytoCeutica, which has a cancer drug derived from traditional Chinese medicine.
Mr. Pitts said Kadmon had raised more than $200 million in debt and equity, with a Japanese financial company, SBI Holdings, as the largest investor.
Three Rivers is supposed to provide Kadmon with an ongoing source of revenue to help develop other drugs. It sells versions of the drugs alpha interferon and ribavirin, mainstays of hepatitis C treatment.
While Three Rivers is believed to have a small market share, Mr. Waksal is banking on the prospect that sales will increase. New drugs from other companies that could reach the market as early as next year promise to make hepatitis C treatment more effective and shorter in duration. That could entice more people with the disease to undergo treatment. And, at least for several years, the new drugs will have to be used along with the existing drugs interferon and ribavirin.
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