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 LLC 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 in New Yo ...

. 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 a ...

(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 respo ...

(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 on September 8, 1947, in Paris, France, to a

Jewish Jews (, , ), or the Jewish people, are an ethnoreligious group and nation, originating from the Israelites of History of ancient Israel and Judah, ancient Israel and Judah. They also traditionally adhere to Judaism. Jewish ethnicity, rel ...

family, the son of

Holocaust The Holocaust (), known in Hebrew language, Hebrew as the (), was the genocide of History of the Jews in Europe, European Jews during World War II. From 1941 to 1945, Nazi Germany and Collaboration with Nazi Germany and Fascist Italy ...

survivors. He earned a

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

in 1969 and a

doctorate A doctorate (from Latin ''doctor'', meaning "teacher") or doctoral degree is a postgraduate academic degree awarded by universities and some other educational institutions, derived from the ancient formalism '' licentia docendi'' ("licence to teach ...

immunobiology Immunology is a branch of biology and medicine that covers the study of immune systems in all organisms. Immunology charts, measures, and contextualizes the physiological functioning of the immune system in states of both health and diseases; ...

in 1974, both from

The Ohio State University The Ohio State University (Ohio State or OSU) is a public university, public Land-grant university, land-grant research university in Columbus, Ohio, United States. A member of the University System of Ohio, it was founded in 1870. It is one ...

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

Stanford University Leland Stanford Junior University, commonly referred to as Stanford University, is a Private university, private research university in Stanford, California, United States. It was founded in 1885 by railroad magnate Leland Stanford (the eighth ...

, 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 in Medford and Somerville, Massachusetts, United States, with additional facilities in Boston and Grafton, as well as Talloires, France. Tufts also has several Doctor of Physical Therapy p ...

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 Madi ...

. 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, doing business as Bristol Myers Squibb (BMS), is an American multinational pharmaceutical company. Headquartered in Princeton, New Jersey, BMS is one of the world's largest pharmaceutical companies and consist ...

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, Trade name, doing business as Lilly, is an American multinational Medication, pharmaceutical company headquartered in Indianapolis, Indiana, with offices in 18 countries. Its products are sold in approximately 125 count ...

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

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 Lynch, Pierce, Fenner & Smith Incorporated, doing business as Merrill, and previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investm ...

, 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 business woman, writer, and television personality. As the founder of Martha Stewart Living Omnimedia, focusing on home and hospitality, she gained success through a variety ...

, 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 informati ...

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.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 ...

obstruction of justice In United States jurisdictions, obstruction of justice refers to a number of offenses that involve unduly influencing, impeding, or otherwise interfering with the justice system, especially the legal and procedural tasks of prosecutors, investiga ...

, and

perjury Perjury (also known as forswearing) 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 insta ...

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

conspiracy A conspiracy, also known as a plot, ploy, or scheme, is a secret plan or agreement between people (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder, treason, or corruption, especially with a political motivat ...

and

wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical (e.g., the U.S. Postal Service) or electronic (e.g., a phone, a telegram, a fax, or the Internet) mail system to defraud another, and are U.S. fede ...

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

Mark Rothko Mark Rothko ( ; Markus Yakovlevich Rothkowitz until 1940; September 25, 1903February 25, 1970) was an American abstract art, abstract painter. He is best known for his color field paintings that depicted irregular and painterly rectangular reg ...

Richard Serra Richard Serra (November 2, 1938 – March 26, 2024) was an American artist known for his large-scale Abstract art, abstract sculptures made for Site-specific art, site-specific landscape, urban, and Architecture, architectural settings, a ...

Roy Lichtenstein Roy Fox Lichtenstein ( ; October27, 1923September29, 1997) was an American pop artist. He rose to prominence in the 1960s through pieces which were inspired by popular advertising and the comic book style. Much of his work explores the relations ...

, and

Willem de Kooning Willem de Kooning ( , ; April 24, 1904 – March 19, 1997) was a Dutch-American abstract expressionist artist. Born in Rotterdam, in the Netherlands, he moved to the United States in 1926, becoming a US citizen in 1962. In 1943, he married pa ...

, 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 Biancur Field, Auxiliary Field 6, Eglin Air Force Base in Florida. Lacey Rose of ''Forbes (magazine), Forbes'' wrote that it "was once considered so cushy that t ...

, 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 Federal law enforcement in the United States, federal law enforcement agency of the United States Department of Justice that is responsible for all List of United States federal prisons, federal prisons ...

(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 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– ...

, 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 university, private Medical research, biomedical Research university, research and graduate-only university in New York City, New York. It focuses primarily on the biological and medical sciences and pro ...

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