Magazine faults ties of Vioxx critic Topol to fund
Wed Dec 1, 2004 05:42 PM ET
NEW YORK, Dec 1 (Reuters) - A prominent cardiologist who became a chief critic of Merck & Co.'s (MRK.N: Quote, Profile, Research) arthritis drug Vioxx several years before it was withdrawn has been an advisor to a hedge fund that shorted Merck's stock, according to the latest edition of Fortune magazine.
Fortune said Dr. Eric Topol, chairman of cardiology at the Cleveland Clinic, began serving on the scientific advisory board of the $176 million Biomedical Value hedge fund long before Merck withdrew Vioxx in September. It said the fund is run by Great Point Partners of Greenwich, Connecticut.
Great Point Partners said it could not immediately comment on the report.
The magazine said marketing material produced by the fund in April 2004 said advisors such as Topol were expected to "provide 'heads up' in adance of major medical meetings to 'get the jump' on trading/investment strategies."
Fortune said an October 2004 presentation by the fund said its board of advisors were "active participants in the fund" and a source of investment ideas.
The article said the fund had performed strongly, in part by shorting Merck, and in a September 2004 performance summary had praised Topol for highlighting the dangers of Vioxx since 2002.
Topol said in a statement that the Fortune article had used "innuendos and speculations" to challenge his credibility and that he had no knowlege of any investment by the fund in Merck and never discussed Vioxx with the fund.
Topol, whose hospital is considered by many to be the best cardiology center in the United States, said the fund paid him $12,000 a year as a retainer but that he did not invest in it.
Moreover, Topol said he had never seen the marketing material referred to by Fortune and that he had severed his relationship with Great Point to avoid an appearance of a conflict of interest.
Fortune also questioned Topol's past role as chairman of the advisory board of Canadian drugmaker Forbes Medi-Tech (FMI.TO: Quote, Profile, Research) , which is developing a cholesterol drug.
It said Topol received one million stock options from the company after being given the position in January. The same day, the article said the company announced it had raised $10.75 million from a group of investors, including Great Point Partners, and touted the financing and Topol's appointment as a strong endorsement of its experimental drugs.
Fortune said Topol left the Canadian company's board in November, after the drug performed poorly in a clinical trial, and forefeited all his options.
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