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What Imclone Knew: Don't Ask Congress

By Catherine Arnst Congress' search for a smoking gun in the ImClone Systems debacle has so far turned up nothing but a cap pistol. A seven-hour House hearing on June 13 did, however, bring to light the many failures to communicate that occurred -- among company executives, Food & Drug Administration regulators, and clinical investigators -- in the course of testing ImClone's experimental cancer drug Erbitux. This wasn't the information the lawmakers conducting the hearing were seeking, so they pretty much ignored it.

Another reason they didn't focus on it could be because much of the June 13 testimony revolved around esoteric medical concepts, such as targeted cancer treatments, tumor response rates, clinical-trial protocols, and combination therapies. It was all a bit much for committee members who had never talked to any of the doctors investigating the drug.

Even though they were talking to the best sources for evaluating the efficacy of cancer drugs, committee members seemed to be out of their league. Several asked for the pronunciation of the standard chemotherapy treatment for colon cancer (irintotecan, approved in the early 1990s), and even referred to the field of oncology as "onocology."

NEWSMAKERS. ImClone's Erbitux is one of a new generation of cancer treatments that blocks a growth signal that helps cancer cells to multiply and spread. The growth signal is found in more than 50% of all solid tumors. The theory is that, once blocked, the cancer can be held in check with minimal side effects.

A trial of the drug involving 123 late-stage colon cancer patients reportedly showed that tumors shrank by more than half in 22% of the sample, but the FDA rejected the application on numerous grounds -- although the primary objection was that that the results weren't well documented.

The hearing, by a subcommittee of the House Energy & Commerce Committee -- the same committee that's looking into the Enron scandal -- couldn't have been timed better for newshounds. On June 12, ImClone founder and former CEO Sam Waksal was arrested at his posh SoHo loft in New York on charges of insider trading. Along with close friend Martha Stewart, Waksal's two daughters, his father, and his sister all sold large blocks of ImClone's stock on Dec. 27, a day before the FDA rejected its application for Erbitux. The rejection sent ImClone's stock into a nosedive -- shares are now 80% below the $72 high reached in early December.

The normally voluble Waksal, who holds monthly salons in his loft attended by artists and celebrities, showed up but said nothing. Looking drawn, he took the fifth with a hoarse voice and quickly made his exit, surrounded by lawyers.

DESIGN QUESTIONS. His brother Harlan, an ImClone co-founder who became CEO three weeks ago, took the heat instead. Subcommittee Chairman James Greenwood (R-Pa.) and his colleagues tried to explore whether the Waksals had misled the public and patients by hyping a drug that never had a chance of winning approval. They peppered Harlan with often-hostile questions regarding what he knew about the FDA's concerns, and when he knew it.

Testimony from FDA and ImClone officials deflated one line of speculation: that the FDA had been telling ImClone all along that the small, Phase 2 clinical trial used for the Erbitux application was inadequate. Committee members spent hours dwelling on the alleged inadequacy of the trial's design. But FDA official Patricia Keegan, who oversaw ImClone's dealings with the agency, said she decreed in August, 2000, that the design "was not fatally flawed." And Waksal replied to repeated questioning that "this is the first time I've heard that the [design] wasn't acceptable."

However, the FDA staff was most definitely unhappy with the data submitted in support of Erbitux's application, and staffers decided on Nov. 30, 2001, to reject the application. They never told ImClone of that decision. Instead, staffers laid out four possible outcomes to their review in an early-December meeting with company execs. One was a letter stating that the FDA would refuse to file the application. They also hinted that ImClone might withdraw its application.

BRISTOL'S INPUT. Still, Harlan Waksal testified that ImClone still thought any deficiencies could be fixed. He said the small company didn't have the resources to ensure that all the doctors participating in the trial were strictly following the rules -- and it seems not all of them were. Thus, many of the patients admitted to the trial were not strictly eligible.

In an interesting sidelight, ImClone partner Bristol-Myers Squibb had apparently already figured this out even before it agreed to pay $1 billion for a 20% stake in ImClone, according to testimony at the hearing. As part of its due diligence, Bristol Regulatory Vice-President Laurie Smaldone said the company reanalyzed all the patient data from the Phase 2 trial of Erbitux.

By eliminating seemingly ineligible patients, Bristol came up with a response rate of only 13%, not the 22.5% claimed by ImClone. Nevertheless, Bristol decided to go ahead with the huge deal, because even a 13% response rate is considered good in very sick colon cancer patients, Smaldone testified.

NO EYE CONTACT. The hearing also brought to light a schism within the FDA. Keegan, the FDA official who oversees clinical-trials design and analysis for the Center for Biologics Evaluation & Research (CBER), which evaluates most biotech drugs, complained that the trial wasn't carried out properly, even though it was acceptable in theory. But Richard Pazdur, director of oncology drugs for the larger Center for Drug Evaluation & Research (CDER), which handles the bulk of drug approvals within the FDA, stated that the design of the Erbitux trial was always inadequate and that a much larger, randomized trial should have been demanded from the beginning.

"Good drug, bad development," he said bluntly. Keegan and Pazdur never looked at each other during this exchange, though they were sitting at the same table.

The one issue that most participants in the hearing agreed on is that Erbitux still holds promise. How much will likely not be clear for another year or two, as ImClone tries to climb out from under this mess and submit a new application. Sadly, the one constituency not heard from during the seven-hour hearing -- the desperately ill patients who are hoping Erbitux may help them before it's too late -- are the ones who'll suffer most during the wait. Senior Writer Arnst covered the ImClone hearing for BusinessWeek

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