The Cell Game: Sam Waksal's Fast Money and False Promises--and the Fate of ImClone's Cancer Drug

It began with a promising cancer drug, the brainchild of a gifted researcher, and grew into an insider trading scandal that ensnared one of America's most successful women. The story of ImClone Systems and its "miracle" cancer drug, Erbitux, is the quintessential business saga of the late 1990s. It's the story of big money and cutting-edgescience, celebrity, greed, and slipshod business practices; the story of biotech hype and hope and every kind of excess.

At the center of it all stands a single, enigmatic figure named Sam Waksal. A brilliant, mercurial, and desperate-to-be-liked entrepreneur, Waksal was addicted to the trappings of wealth and fame that accrued to a darling of the stock market and the overheated atmosphere of biotech IPOs. At the height of his stardom, Waksal hobnobbed with Martha Stewart in New York and Carl Icahn in the Hamptons, hosted parties at his fabulous art-filled loft, and was a fixture in the gossip columns. He promised that Erbitux would "change oncology," and would soon be making $1 billion a year.

But as Waksal partied late into the night, desperate cancer patients languished, waiting for his drug to come to market. When the FDA withheld approval of Erbitux, the charming scientist who had always stayed just one step ahead of bankruptcy panicked and desperately tried to cash in his stock before the bad news hit Wall Street.

Waksal is now in jail, the first of the Enron-era white-collar criminals to be sentenced. Yet his cancer drug has proved more durable than his evanescent profits. Erbitux remains promising, the leading example of a new way to fight cancer, and patients and investors hope it will be available soon.

Excerpt

Chapter One

Cancer Cells Are Smart

Six feet tall, trim, with white hair, a long-featured face, and intelligenthazel eyes, Dr. John Mendelsohn was one of the most accomplishedcancer fighters in the world. He wasn't loud or physically imposing, buthis fecund mind, forthright demeanor, and implacable resolve drewpeople to him naturally. The son of a traveling salesman from Cincinnati,Mendelsohn had proven himself a brilliant researcher and teacher,an exceptional administrator and fund-raiser. Yet he was not the kindwho took his talents for granted. John Mendelsohn was driven to "usescience to improve life."

One prize had eluded him, maddeningly, for over two decades: thecommercialization of the monoclonal antibody C225, a potentially revolutionarycancer drug. C225, later called "Erbitux," was Mendelsohn'sbrainchild. It had alternately inspired and vexed him since 1980, whenhe and a small group of collaborators at the University of California,San Diego (UCSD), had made their earliest discoveries about "targetedtreatment" cancer drugs. The lack of time and money had been theirmain constraints, as in most creative undertakings, but their novel ideasabout how to fight cancer had also met with academic hostility and commercialresistance. Several times Mendelsohn had arranged deals withpharmaceutical companies to develop C225, only to have the agreement fall apart. He was quick to note that this is the nature of science, that developingnew drugs is a risky and difficult business, that any worthwhilequest requires trial and error. "You haven't crossed home plate untilyou've crossed home plate," he'd say stoically.

Mendelsohn was convinced that C225 would one day extend thelives of many cancer victims, that it would be the most significant personalcontribution he could make to the war on cancer. When he spokeof his campaign to bring the cancer drug C225 from idea to the laboratoryto the marketplace and "get it into patients," Mendelsohn's voicewould tighten, his brow would furrow, and his eyes would blaze intensely - revealing for just a moment the steely determination that laybeneath his genial exterior.

At the end of May 2001, Mendelsohn, who was 64, was the guest ofhonor at a luncheon in New York City for more than 100 members ofthe nation's social and intellectual elite. The gathering was a fund-raiserfor Houston's M. D. Anderson Cancer Center, the nation's largest cancerhospital, which Mendelsohn had run since 1996. The lunch was attendedby President George H. W. Bush, a friend from Houston who saton the board of visitors at the Anderson, and it was hosted by MartinZweig, a Wall Street tycoon. Encompassing the entire top floor of theopulent Pierre Hotel, on 59th Street and Fifth Avenue, the Zweig apartmentwas like a castle in the sky: the walls were eclectically decoratedwith Renoir paintings, Beatles memorabilia, and the sparkling whitedress Marilyn Monroe had worn to sing "Happy Birthday" to PresidentKennedy in 1962. Framed by its expansive windows were breathtakingviews over the long greensward of Central Park and around the gray,crenellated cityscape of midtown Manhattan. As he stood in that fabulousaerie at the start of the new century, nibbling canapés, graciouslyaccepting compliments and some $475,000 in donations for M. D.Anderson, no one could begrudge Mendelsohn his feelings of relief,fulfillment, and cautious optimism.

The week before, C225 had been the star of the 37th annual ASCOconference (American Society for Clinical Oncology), the largest gatheringof cancer specialists in the world. There, ImClone Systems, Inc.,the small Manhattan biotech firm that had licensed Mendelsohn's drug,had made a stunning announcement: in clinical trials, 22.5 percent ofcolon cancer patients who had used a cocktail of C225 and irinotecan, astandard chemotherapy, had responded positively, meaning their tumors shrank by more than fifty percent. This was the best response rateever achieved in patients who previously had no hope for survival. Theoncology community had reacted with a thundering ovation. There hadbeen a burst of media coverage. ImClone's stock began to climb. And,to cap it all off, ImClone's CEO, Sam Waksal, had begun secret negotiationswith the pharmaceutical giant Bristol-Myers Squibb for a landmarkdeal that finally promised to bring C225 to market.

Circulating in the noosphere of the Zweig apartment, Mendelsohn'sgaze slipped out the window, and over the breathtaking views tofix on the bright, indefinite horizon. After all of the false starts and setbacks,he wondered, what could possibly go wrong now?

The history of modern biotechnology began on April 25, 1953, whenJames Watson and Francis Crick announced in the British journal Naturethat they had unlocked the three-dimensional structure of the DNA(deoxyribonucleic acid) molecule. DNA is the "master molecule," thestructure of which is encoded with the information needed to createand direct the chemical processes of life. The gracefully spiraled structure,known as the double helix, was the key to understanding the technologyof life. Watson and Crick's discovery would earn them the NobelPrize (Watson was only 34 years old at the time), and would raise manyintriguing questions, foremost of which was: Could DNA be manipulated?Could life itself be manipulated?

It was a question, and a challenge, that would motivate an entiregeneration of scientists to produce some of the most exhilarating medicaldiscoveries in history. It would also set off a philosophical debate:biotechnology was seen as either a Promethean quest to save mankindor a Faustian meddling. In his 1969 book about the discovery of DNA,The Coming of the Golden Age: A View of the End of Progress, Gunther Stentdescribed man's ability to manipulate DNA as a sign of the end to socialand economic evolution ...

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Excerpted from The Cell Gameby Prud'homme, Alex Excerpted by permission.
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