Samuel D. Waksal (born September 8, 1947) is the founder and former CEO of the

biopharmaceutical A biopharmaceutical, also known as a biological medical product, or biologic, is any pharmaceutical drug product manufactured in, extracted from, or semisynthesized from biological sources. Different from totally synthesized pharmaceuticals, t ...

company

ImClone Systems ImClone Systems Incorporated was a biopharmaceutical company dedicated to developing biologic medicines in the area of oncology. It was founded in 1984 and had its corporate headquarters in Bridgewater, New Jersey, and its research headquarters i ...

. 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, sold under the brand name Erbitux, is an epidermal growth factor receptor (EGFR) inhibitor medication used for the treatment of metastatic colorectal cancer and head and neck cancer. Cetuximab is a chimeric (mouse/human) monoclonal ant ...

(cetuximab). During the course of its review process with the

Food and Drug Administration The United States Food and Drug Administration (FDA or US FDA) is a List of United States federal agencies, federal agency of the United States Department of Health and Human Services, Department of Health and Human Services. The FDA is respon ...

(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 A bachelor's degree (from Middle Latin ''baccalaureus'') or baccalaureate (from Modern Latin ''baccalaureatus'') is an undergraduate academic degree awarded by colleges and universities upon completion of a course of study lasting three to six ...

in 1969 and a

doctorate A doctorate (from Latin ''docere'', "to teach"), doctor's degree (from Latin ''doctor'', "teacher"), or doctoral degree is an academic degree awarded by universities and some other educational institutions, derived from the ancient formalism ''l ...

immunobiology Immunology is a branch of medicineImmunology for Medical Students, Roderick Nairn, Matthew Helbert, Mosby, 2007 and biology that covers the medical study of immune systems in humans, animals, plants and sapient species. In such we can see there ...

in 1974, both from

The Ohio State University The Ohio State University, commonly called Ohio State or OSU, is a public land-grant research university in Columbus, Ohio. A member of the University System of Ohio, it has been ranked by major institutional rankings among the best public ...

. Over the next 15 years, he worked as a medical researcher at

Stanford University Stanford University, officially Leland Stanford Junior University, is a private research university in Stanford, California. The campus occupies , among the largest in the United States, and enrolls over 17,000 students. Stanford is consider ...

, the

National Cancer Institute The National Cancer Institute (NCI) coordinates the United States National Cancer Program and is part of the National Institutes of Health (NIH), which is one of eleven agencies that are part of the U.S. Department of Health and Human Services. ...

Tufts University Tufts University is a private research university on the border of Medford and Somerville, Massachusetts. It was founded in 1852 as Tufts College by Christian universalists who sought to provide a nonsectarian institution of higher learning. ...

and

Mount Sinai Hospital, New York Mount Sinai Hospital, founded in 1852, is one of the oldest and largest teaching hospitals in the United States. It is located in East Harlem in the New York City borough of Manhattan, on the eastern border of Central Park stretching along Madis ...

. However, he often faced scrutiny for misrepresenting the source of material and fabricating lab results.

ImClone Systems

Waksal founded

in 1984. The company was engaged in several research and development projects before filing its first

Biologic License Application A biologics license application (BLA) is defined by the U.S. Food and Drug Administration (FDA) as follows: The biologics license application is a request for permission to introduce, or deliver for introduction, a biologic product into inters ...

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 The Bristol Myers Squibb Company (BMS) is an American multinational pharmaceutical company. Headquartered in New York City, BMS is one of the world's largest pharmaceutical companies and consistently ranks on the ''Fortune'' 500 list of the lar ...

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 Eli Lilly and Company is an American pharmaceutical company headquartered in Indianapolis, Indiana, with offices in 18 countries. Its products are sold in approximately 125 countries. The company was founded in 1876 by, and named after, Colonel ...

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 expose Waksal to a number of financial problems beyond the near-certainty of ImClone's stock sliding. For example, Waksal had pledged a warrant to buy ImClone shares as collateral for a loan from

Bank of America The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank w ...

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 Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many ins ...

. He tipped off several of his friends and family to sell their ImClone stock. When Waksal's broker at

Merrill Lynch Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment bank ...

, Peter Bacanovic, became aware of the pending rejection, he alerted their mutual friend,

Martha Stewart Martha Helen Stewart (, ; born August 3, 1941) is an American retail businesswoman, writer, and television personality. As founder of Martha Stewart Living Omnimedia, she gained success through a variety of business ventures, encompassing pub ...

, that ImClone was about to lose a good deal of its value. Waksal was arrested June 12, 2002 on

insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...

charges. On October 15, he pleaded guilty to charges of

securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in los ...

obstruction of justice Obstruction of justice, in United States jurisdictions, is an act that involves unduly influencing, impeding, or otherwise interfering with the justice system, especially the legal and procedural tasks of prosecutors, investigators, or other gov ...

, and

perjury Perjury (also known as foreswearing) is the intentional act of swearing a false oath or falsifying an affirmation to tell the truth, whether spoken or in writing, concerning matters material to an official proceeding."Perjury The act or an inst ...

. On March 3, 2003, he pleaded guilty to charges of

conspiracy A conspiracy, also known as a plot, is a secret plan or agreement between persons (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder or treason, especially with political motivation, while keeping their agree ...

and

wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical or electronic mail system to fraud, defraud another, and are Federal crime in the United States, federal crimes there. Jurisdiction is claimed by the ...

for avoiding $1.2 million in sales taxes on $15 million in artwork. The art included works by

Mark Rothko Mark Rothko (), born Markus Yakovlevich Rothkowitz (russian: Ма́ркус Я́ковлевич Ротко́вич, link=no, lv, Markuss Rotkovičs, link=no; name not Anglicized until 1940; September 25, 1903 – February 25, 1970), was a Latv ...

Richard Serra Richard Serra (born November 2, 1938) is an American artist known for his large-scale sculptures made for site-specific landscape, urban, and architectural settings. Serra's sculptures are notable for their material quality and exploration o ...

Roy Lichtenstein Roy Fox Lichtenstein (; October 27, 1923 – September 29, 1997) was an American pop artist. During the 1960s, along with Andy Warhol, Jasper Johns, and James Rosenquist among others, he became a leading figure in the new art movement. Hi ...

, and

Willem de Kooning Willem de Kooning (; ; April 24, 1904 – March 19, 1997) was a Dutch-American abstract expressionist artist. He was born in Rotterdam and moved to the United States in 1926, becoming an American citizen in 1962. In 1943, he married painter El ...

, 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 Federal Prison Camp, Eglin was a Federal Bureau of Prisons minimum security prison at Auxiliary Field 6, Eglin Air Force Base in Florida. Lacey Rose of ''Forbes'' wrote that it "was once considered so cushy that the term "Club Fed" was actually co ...

, but instead he went to

Federal Correctional Institution, Schuylkill The Federal Correctional Institution, Schuylkill (FCI Schuylkill) is a medium-security United States federal prison for male inmates in Pennsylvania. It is operated by the Federal Bureau of Prisons, a division of the United States Department of Ju ...

. He was later transferred to the

Federal Correctional Institution, Milan The Federal Correctional Institution, Milan (FCI Milan) is a U.S. federal prison in Michigan, with most of the prison in York Township, and a portion in Milan. It is operated by the Federal Bureau of Prisons. This prison is a low-security facil ...

. On February 9, 2009, Waksal,

Federal Bureau of Prisons The Federal Bureau of Prisons (BOP) is a United States federal law enforcement agency under the Department of Justice that is responsible for the care, custody, and control of incarcerated individuals who have committed federal crimes; that i ...

(BOP) # 53803-054, was released from BOP custody.

Kadmon Pharmaceuticals

In 2009, upon his release from prison Waksal began fundraising and launched the company Kadmon Pharmaceuticals in New York City. Waksal was forced to step down from the CEO position in 2014 as the company planned an

IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...

, because his sentence also ruled that he was banned from serving as an officer or director to any public company for life. With Waksal leaving the role, his brother Harlan began serving as CEO. Waksal remained with the company and transitioned into 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

. In July 2016, the company raised $75 million in its IPO.

Personal life

Waksal is divorced from Cynthia F. Waksal; they had two children: Aliza and Elana. His daughter, Elana, is married to Jarrett Posner, son of

Steven Posner Steven Neil Posner (pronounced POZ-ner; January 11, 1943 – November 29, 2010) was an American corporate raider who worked together on a number of major hostile takeovers with his father, Victor Posner, though the two would later have a falli ...

and grandson of

Victor Posner Victor Posner (September 18, 1918 – February 11, 2002) was an American businessman. He was one of the highest-paid business executives of his generation. He was a pioneer of the leveraged buyout and became notorious for asset strippin ...

. Waksal dated

's daughter,

Alexis Alexis may refer to: People Mononym * Alexis (poet) ( – ), a Greek comic poet * Alexis (sculptor), an ancient Greek artist who lived around the 3rd or 4th century BC * Alexis (singer) (born 1968), German pop singer * Alexis (comics) (1946–197 ...

, for several years prior to his criminal conviction. As of 2016 he was reported to hold executive positions with the New York Biotechnology Association and the New York Council for the Humanities, and is also a member of the board of advisors of

Rockefeller University The Rockefeller University is a private biomedical research and graduate-only university in New York City, New York. It focuses primarily on the biological and medical sciences and provides doctoral and postdoctoral education. It is classif ...

References

External links

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

on his release from jail {{DEFAULTSORT:Waksal, Sam 1947 births Living people French emigrants to the United States American immunologists 20th-century American Jews People convicted of obstruction of justice American perjurers American health care chief executives American prisoners and detainees Businesspeople in the pharmaceutical industry Corporate crime Prisoners and detainees of the United States federal government People convicted of insider trading American people convicted of fraud American businesspeople convicted of crimes Ohio State University alumni 21st-century American Jews