The Drug That Could Have Been
When a young company called ImClone said it had a hot new cancer drug, its stock leapt on the bet that it would get an OK from the FDA. Now the stock has tanked, ImClone's charismatic CEO is indicted, and, Martha Stewart is in trouble, too. But the big losers are cancer victims. Here's the real story behind ImClone and why it failed to win the FDA's approval
Pressure from cancer patients to get Erbitux was also mounting. A 60 Minutes segment highlighted the drug's remarkable efficacy, but showed that most patients couldn't get the treatment. On June 20, in Washington, the House Committee on Government Reform held a hearing. "We tried to get Abigail into narrowly defined clinical trials but she did not qualify," said Frank Burroughs of his daughter, who had died two weeks earlier from head and neck cancer. "We worked very hard to acquire the drugs on a compassionate-use basis, but got nowhere." Compassionate-use programs allow patients not eligible for a clinical trial to use the drug, but ImClone did not have one. Sam Waksal told the committee that supply of the drug was limited; committee members told the FDA to hurry up and get the drug approved.
Meanwhile, investors were seeing dollar signs. ImClone's stock price jumped from $27 in April to $53 in July. At the same time, pharmaceutical giant Bristol-Myers Squibb was talking to ImClone about buying a 20 percent stake in ImClone and the rights to market the drug. (The deal would eventually earn the Waksals $111 million.) Bristol-Myers Squibb was desperate to find a new drug, especially in the area of oncology. It was doing well selling to cancer specialists, but with its blockbuster cancer drug Taxol recently off patent, the company needed a new product.
Yet Bristol-Myers medical experts were cautious. "On the whole this remains a very high risk opportunity," Bristol-Myers Senior Vice President Laurie Smaldone wrote in a June E-mail to senior executive Peter Ringrose. She noted that the Erbitux-only trial had not yet been completed and that "there is no agreement that we could find that is reassuring regarding activity level needed for approval." (Indeed, there never was such agreement.) A Bristol-Myers analysis also found the response rate in Study 9923 to be 13 percent instead of ImClone's stated 22.5 percent. But on September 4, Bristol-Myers senior executives recommended a "go." Smaldone now says the company viewed the FDA's consideration of a combination study for a fast-track approval as a "validator." The $2 billion investment deal between Bristol-Myers and ImClone was a public shot in the arm for Sam Waksal's claims. "We don't have any worries about the FDA," Waksal told a group of investors on September 19. Tony Russo, an investor-relations expert at Noonan Russo Presence, says the deal with Bristol-Myers made ImClone suddenly seem "like a very safe bet." And in October, the investment bank UBS Warburg predicted that Erbitux sales could reach over $1 billion by 2006, assuming it was approved by the FDA in the first half of 2002.
The FDA struggles
The deal spurred patient advocates to press ImClone. In November, in a series of conference calls with advocacy groups, ImClone said it might begin a program within 90 days: It would allow 30 patients per month to gain access to Erbitux outside of clinical trials. Frank Burroughs, cofounder of the Abigail Alliance for Better Access to Developmental Drugs, says that seemed low. Still, he said, "I thought it was better to get one started, and that 30 patients is better than none."
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