Martha Stewart Sold ImClone Shares
Fri Jun 7, 1:06 AM ET
WASHINGTON -- Add media entrepreneur Martha Stewart to the list of acquaintances of former ImClone Systems (NasdaqNM: IMCL - News) Inc. Chief Executive Samuel Waksal who sold shares in the company just before the stock tumbled, Friday's Wall Street Journal reported.
Her sale in the last week of December came just before ImClone's application for a heralded drug prospect was turned away by federal regulators, precipitating the stock's collapse, according to congressional investigators.
There is no indication that Ms. Stewart received any advance word from ImClone officials about the pending action by the Food and Drug Administration (news - web sites). Her attorney insists that there wasn't.
A congressional subcommittee exploring the ImClone matter was recently informed of the stock sale by ImClone lawyers. While not specifically investigating the stock sales by Ms. Stewart or members of Dr. Waksal's family, the subcommittee has gathered information on the trades as part of a broader inquiry into whether ImClone stock was improperly manipulated and whether FDA secrecy laws allowed that to happen.
On Dec. 28 , the FDA informed the New York -based biotech concern that it wouldn't consider its application for approval of Erbitux, a promising cancer drug. The company plans to resubmit the application with new data, but in the interim ImClone shares have fallen more than 80%.
Ms. Stewart -- who built her empire, Martha Stewart Living Omnimedia Inc., out of her magic touch with cooking and decorating -- is a longtime friend of the former ImClone CEO. Dr. Waksal resigned last month after months of controversy over the company's handling of Erbitux.
According to her attorney, John F. Savarese, of law firm Wachtell, Lipton, Rosen & Katz, Ms. Stewart's sale, involving about 3,000 shares of ImClone, occurred on Dec. 26 or 27. The sale was executed, he said, because Ms. Stewart had a predetermined price at which she planned to sell the stock. That determination, made more than a month before that trade, was to sell if the stock ever went less than $60, he said. At the time of the sale, the stock was trading at about $60. As of 4 p.m. Thursday, ImClone shares tumbled $1.28, or about 15%, to $7.40 on the Nasdaq Stock Market.
Wall Street Journal Staff Reporters Chris Adams and Geeta Anand contributed to this report.
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