Out of Prison and Back in Biotech: Former ImClone CEO Sam Waksal's Comeback Plan

Former ImClone Systems CEO Sam Waksal, whose insider trading scandal landed him and close friend Martha Stewart behind bars, is getting back into the biotech game.

Waksal got in trouble for dumping stock -- and tipping off his friends and family to do the same -- ahead of an FDA delay on ImClone's cancer drug Erbitux (cetuximab). He was sentenced to seven years in prison after pleading guilty to securities fraud, bank fraud, conspiracy, perjury and obstruction of justice. Erbitux later gained FDA approval; meanwhile, Eli Lilly (LLY) bought ImClone for $6.5 billion.

The SEC permanently barred Waksal from serving as a director or officer of any public company, but the world of privately-held biotechs remains his oyster. TheStreet.com's Adam Feuerstein reported that Waksal is now seeking $50 million from investors for Kadmon Pharmaceuticals, a private biotech that would acquire and develop drugs for cancer and infectious diseases.

Interestingly, it appears that publicity-savvy Waksal started laying the groundwork for his venture from behind bars. BioCentury reported that his lawyer incorporated Kadmon LLC in 2003 and snapped up the Kadmon.com web site in 2008. After being released from a halfway house early last year, Waksal wasted no time landing a profile in New York Magazine and giving speeches at places like New York University. Last month, he was making the rounds at the J.P. Morgan healthcare conference.

Kadmon reportedly has a management team in place and research programs involving statins for influenza and antibodies for cancer, as well as plans to make an acquisition in the cancer space. But will investors pony up the dough?

Waksal is confident, according to New York Magazine:

Waksal insists his insider-trading conviction isn't hindering his business plans. "There's no scientist out there that has been wary of me," he says. "And guys in the venture-capital world I dealt with before -- it's as if I wasn't gone a day!"