Sam Waksal, Part of the Martha Stewart Insider Trading Scandal, Exits Kadmon as Company Files for $115 Million IPO
June 13, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Kadmon Corporation, headquartered in New York, filed on Friday with the U.S. Securities and Exchange Commission for an initial public offering (IPO) to raise $115 million. Kadmon with list on the New York Stock Exchange under the symbol KDMN.
Kadmon focuses on developing products for unmet medical needs. Its produce pipeline focuses on autoimmune and fibrotic diseases, oncology and genetic diseases. On June 3, Kadmon announced that its first patient had been dosed in a Phase II clinical trial of KD025 for idiopathic pulmonary fibrosis (IPF). IPF is a chronic, ultimately fatal disease that causes lung tissue scarring. KD025 is a rho-associated coiled-coil kinase 2 (ROCK2) inhibitor.
“This study marks Kadmon’s entry into the field of fibrosis, a disease area where we believe ROCK2 inhibition represents a promising new therapeutic approach,” ‘said Harlan Waksal, president and chief executive officer of Kadmon, in a statement. “Based on our preclinical studies demonstrating the potential anti-fibrotic effects of KD025, we believe our drug may have clinical utility in IPF, a significant unmet medical need.”
On April 14, the company released preclinical data regarding its anti-PD-L1/IL-15 bi-functional fusion protein, KD033, which stimulates long-lasting and persistent immunity to tumors. The data showed that KD033 suppressed tumor growth in various in vivo models, effectively blocked the PD-L1 pathway, and targeted IL-15 cytokine activity, activating natural killer (NK) and CD8+ T cells.
The company also markets Ribasphere, for hepatitis C infection, Qsymia for weight loss, and Tetrabenazine for movement disorders caused by Huntington’s disease.
The S-1 filing also indicated that the company’s founder, Sam Waksal, resigned from the company. Sam Waksal’s brother, Harlan, is the head of the company. Sam Waksal is famous, or perhaps infamous, for being involved in the insider trading case that sent Martha Stewart to prison. Along with Sam Waksal’s own prison sentence, the SEC barred him from serving as an officer in a public company, which is likely why he left Kadmon.
According to the filings, Sam Waksal will receive $3 million in severance, up to $6.75 million in various milestone payments, and up to $15 million as part of various development deals.
Basically what happened LINK http://www.cnbc.com/2015/01/13/martha-stewart-ordeal-changed-me-sam-waksal.html was that Sam Waksal, founder and chief executive officer of ImClone Systems just days before the U.S. Food and Drug Administration (FDA) was to reject its application for cancer drug Erbitux in 2001, attempted to unload company stock and told various family members and friends that they should, too. When news of the rejection was released, the shares plummeted.
In the case of Martha Stewart, she had unloaded ImClone shares based on illegally obtained information from her broker. Stewart served five months in federal prison and some time on house arrest.
Waksal, sentenced in 2003, didn’t get out of prison until 2009, a year after Eli Lilly acquired ImClone for $6.5 billion. Erbitux also was approved by the FDA in 2004.
Sam Waksal founded Kadmon, and brought in Harlan to act as chief executive officer. Harlan Waksal was also a co-founder of ImClone.