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ImClone Ex-CEO Waksal Is Back (3 Rivers Acquisition)
  "The Wall Street Journal broke the story this morning that Sam Waksal's Kadmon Pharmaceuticals has struck a deal to buy Three Rivers Pharmaceuticals for $100 million as he promises to take what he accomplished at ImClone and take "it to the next step to build a 21st century biotech company.".....Kadmon has raised $200 million from a group of investors who believe that Waksal, who spent five years behind bars for his notorious role in a clumsy insider trading scandal, can once again build a biotech company into a valuable commodity. Kadmon is focusing on new therapies for cancer and infectious diseases and Three Rivers, which already markets hepatitis C treatments, provides an operations and commercialization base that can be used to build the company into a fully integrated biotech outfit.....Three Rivers is at an inflection point," Waksal told the Journal. Later, in a statement, he added: "Kadmon is building a new paradigm for bringing pioneering medicines to market more rapidly and cost effectively. This includes the simultaneous execution of a dual strategy, combining an operating commercial business with novel compounds at various stages of clinical development."
Wall St Jnl Oct 24 2010
Former ImClone Chief Executive Samuel Waksal's new biotech venture is expected Monday to announce its first major acquisition, the purchase of closely held Three Rivers Pharmaceuticals LLC for more than $100 million, a person familiar with the matter said.
New York-based Kadmon Pharmaceuticals LLC is acquiring Three Rivers, of Warrendale, Pa., in a mostly cash transaction, although there is also some stock included in the deal, according to the person. Three Rivers will serve as Kadmon's operational and commercial base.
Kadmon, a private company started by Mr. Waksal and other partners, focuses on next-generation drugs in the areas of oncology, infectious diseases and immunology. Kadmon has raised over $200 million in debt and equity to make acquisitions and is backed by investors from Japan and China, among others, the person familiar with the matter said. Mr. Waksal is its chief executive.
Mr. Waksal founded ImClone Systems Inc. in 1984, building it into one of the hottest biotechnology firms of the last decade. But Mr. Waksal ran into trouble in 2002, when he was arrested for insider trading after attempting to sell ImClone shares after one of its drugs failed to obtain approval from the Food and Drug Administration. He spent about five years in prison and was released in 2009.
Homemaking diva Martha Stewart was also charged with obstruction of justice related to the sale of her ImClone stock after receiving a tip from her broker, who was also Mr. Waksal's broker. She served five months in prison.
ImClone was acquired by Eli Lilly & Co. in 2008 for $6.5 billion.
Three Rivers currently markets several products for the hepatitis C market, including Infergen, Ribasphere and RibaPak. The company also markets Amphotec, which is used to treat a systemic fungal infection and also is used for certain cancers. Three Rivers is also developing generic drugs in oncology.
"Three Rivers is at an inflection point," Mr. Waksal said in an interview. "Kadmon has the novel products in fields that have unmet needs and Three Rivers is a fully integrated commercial company. I'm taking what we did at ImClone and bringing it to the next step to build a 21st century biotech company."
Three Rivers CEO Donald Kerrish and a few other top executives will be leaving the company, which will be absorbed into Kadmon.
Kadmon is expected to keep Three Rivers headquarters in Warrendale, in addition to the Pennsylvania firm's manufacturing, distribution, commercial and administrative operations.
Kadmon has made several other smaller deals this year, including the acquisition of PhytoCeutica Inc., which is developing traditional Chinese medicine into FDA-approved prescription drugs for the treatment of cancer, as well as the drug XL647, which is being developed to treat lung cancer patients.
Kadmon hopes to develop a new model for small biotech firms who may be leery of the venture capital markets. Kadmon's pitch is that companies under its umbrella can focus on drug research and development without having to worry about continuously raising money.
Ex-ImClone CEO Waksal returns to biotech with deal
By Ransdell Pierson
NEW YORK | Mon Oct 25, 2010
NEW YORK (Reuters) - Sam Waksal, the former chief executive of ImClone Systems Inc, whose insider trading scam sent him and Martha Stewart to prison, on Monday announced an acquisition meant to catapult him back into the biotech game.
Waksal said his drug company Kadmon Pharmaceuticals has bought the privately held Three Rivers Pharmaceuticals, and that its treatments for hepatitis C, infections and cancer will be the backbone of his new enterprise.
"Hepatitis treatment is on the verge of major change," Waksal said in a release. "With Three Rivers as a cornerstone, Kadmon will play an important role in the evolution of this global market."
Kadmon did not provide financial details, although the Wall Street Journal valued the deal at more than $100 million. Waksal said Kadmon will keep Three Rivers' headquarters in Warrendale, Pennsylvania, and its manufacturing, distribution, commercial and administrative operations.
Waksal was convicted in 2002 of securities fraud, bank fraud, obstruction of justice and perjury. After paying $4.3 million in fines and serving five years in prison, he was released in February 2009.
The U.S. Securities and Exchange Commission barred Waksal from serving as a director or officer of any public company.
Three Rivers sells hepatitis C drugs, including the Infergen brand of interferon and its Ribasphere and RibaPak brands of the anti-viral drug ribavirin. But the products have tiny sales compared to leading interferons and ribavirins sold by drugmakers Merck & Co and Roche Holding AG for liver disease.
Three Rivers also sells Amphotec for treatment of invasive aspergillosis, a dangerous systemic fungal infection, and a generic form of AstraZeneca Plc's breast cancer treatment Arimidex (anastrozole). And it is developing new cancer medicines.
Neither Waksal nor Three Rivers could be immediately reached for comment.
Kadmon, whose lead investor is SBI Holdings Inc of Japan, said the Three Rivers purchase was financed through debt and equity capital.
Waksal, an immunologist, founded New York-based ImClone in 1984 and spearheaded development of its Erbitux drug for colon cancer. But when the U.S. Food and Drug Administration initially rejected the drug, Waksal tipped off relatives and friends to sell their ImClone shares before the rejection was made public.
Regulators became suspicious when his father and daughter sold $9.2 million of ImClone shares, and eventually arrested Waksal for attempting to dump his own shares and tipping off the others.
His close friend, Stewart, sold almost 4,000 shares just days before the FDA's rejection of Erbitux and served five months in prison for her role in the case.
Time Magazine has named Waksal one of the "Top 10 Crooked CEOs" in history, with a ranking of No. 7. Ponzi scheme Bernard Madoff heads the list.
Erbitux was approved in 2004 after ImClone provided the FDA persuasive new clinical data.
Eli Lilly bought ImClone for $6.5 billion in 2008 and generated third-quarter revenue of $95 million from Erbitux, which is also approved to treat head and neck cancer.
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