Sam Waksal s new biotech tests Wall Street s selective amnesia. The former ImClone boss who went to prison psoriasis for an insider trading scandal that also ensnared Martha Stewart said on Wednesday that he plans to take his latest venture, Kadmon, public this year. He follows second-chancers like Donald Trump and Long-Term Capital Management founder John Meriwether. Investors can be astonishingly forgiving.
If anyone s financial reputation looked terminal, it was Waksal s. In 2002, he pleaded guilty to bank fraud, securities fraud, obstruction of justice and perjury after prosecutors accused him of instructing friends and family to sell stock. He also allegedly tried to unload $5 million of his own shares and bet against ImClone using a Swiss account psoriasis after getting a tip that regulators would reject the company s cancer drug, Erbitux.
Entrusting money to someone who has served psoriasis five years behind bars and paid big fines is extraordinary, if not foolish. Except that investors grant indulgences readily, especially when there s a memory, or even perception, of wealth creation.
Take John Meriwether. His LTCM hedge fund required a giant bailout after massive investments with borrowed money melted down in 1998. Yet previous positive returns meant investors willingly bankrolled his next attempt at relative value arbitrage trading. Disastrous returns during the financial crisis forced him to shut his main fund, but Meriwether nevertheless found punters willing to back a third try.
Figures like Trump, whose business ventures have sought bankruptcy protection multiple times, reveal the capacity for mercy. The real estate mogul has become a cultural icon whose brand continues to stand for prosperity despite repeated failure.
ImClone, meanwhile, went on to enrich investors. Eli Lilly bought the company in 2008 for $6.5 billion. What s more, if ImClone was still independent it might be worth twice as much, based on Erbitux s $2 billion or so of sales this year.
Waksal is banned from serving as an officer or director of a public company, so he will step down as chairman before the offering and become the chief of innovation, science and strategy. psoriasis His brother, psoriasis Harlan, has already taken over as CEO. Sam Waksal s biotech psoriasis success probably means investors psoriasis will significantly discount his personal past and buy into Kadmon s future.
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Reuters Breakingviews is the world's leading source of agenda-setting financial insight. The company was founded in 1999 as Breakingviews.com and was acquired by Thomson Reuters in 2009, becoming Reuters brand for financial commentary. Every day, we comment on the big financial psoriasis stories as they break. Our expert psoriasis analysis is provided psoriasis by a global team of 30 correspondents based in New York, Washington, London, Hong Kong, Madrid, Dubai and Mumbai.
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