Text of
Printed Hearing
The Committee on Energy and Commerce
W.J. "Billy" Tauzin, Chairman
An Inquiry into the ImClone Cancer-Drug Story
Subcommittee on Oversight and Investigations
June 13, 2002
09:30 AM
2123 Rayburn House Office Building
<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:80678.wais]
AN INQUIRY INTO THE IMCLONE CANCER-DRUG STORY
=======================================================================
HEARINGS
before the
SUBCOMMITTEE ON
OVERSIGHT AND INVESTIGATIONS
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
JUNE 13 and OCTOBER 10, 2002
__________
Serial No. 107-142
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
U.S. GOVERNMENT PRINTING OFFICE
80-678 WASHINGTON : 2002
___________________________________________________________________________
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COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
RICHARD BURR, North Carolina BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
GREG GANSKE, Iowa BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
TOM DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland LOIS CAPPS, California
STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
ERNIE FLETCHER, Kentucky
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Oversight and Investigations
JAMES C. GREENWOOD, Pennsylvania, Chairman
MICHAEL BILIRAKIS, Florida PETER DEUTSCH, Florida
CLIFF STEARNS, Florida BART STUPAK, Michigan
PAUL E. GILLMOR, Ohio TED STRICKLAND, Ohio
RICHARD BURR, North Carolina DIANA DeGETTE, Colorado
ED WHITFIELD, Kentucky CHRISTOPHER JOHN, Louisiana
Vice Chairman BOBBY L. RUSH, Illinois
CHARLES F. BASS, New Hampshire JOHN D. DINGELL, Michigan,
ERNIE FLETCHER, Kentucky (Ex Officio)
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Hearings held:
June 13, 2002................................................ 1
October 10, 2002............................................. 215
Testimony of:
Crawford, Hon. Lester M., Deputy Commissioner, Food and Drug
Administration............................................. 227
Goldhammer, Robert F., Chairman of the Board, ImClone
Systems, Inc............................................... 248
Keegan, Patricia, Deputy Division Director, Center for
Biologics Evaluation and Research, Office of Therapeutics
Research and Review, Division of Clinical Trial Design and
Analysis, U.S. Food and Drug Administration; accompanied by
Richard Pazdur, Director, Division of Oncology Drug
Products, Office of Drug Evaluation I, Center for Drug
Evaluation and Research, U.S. Food and Drug Administration;
Lee H. Pai-Scherf, Medical Officer, Clinical Reviewer,
Center for Biologics Evaluation and Research, Office of
Therapeutics Research and Review, Division of Clinical
Trial Design and Analysis, Oncology Branch, U.S. Food and
Drug Administration; George Q. Mills, Acting Chief, Team
Leader, Center for Biologics Evaluation and Research,
Office of Therapeutics Research and Review, Division of
Clinical Trial Design and Analysis, Oncology Branch, U.S.
Food and Drug Administration; and Susan M. Jerian, Medical
Officer, Team Leader, Center for Biologics Evaluation and
Research, Division of Clinical Trials Design and Analysis,
Oncology Branch, U.S. Food and Drug Administration......... 189
Kopperl, Paul B., Member of the Board of Directors, ImClone
Systems, Inc............................................... 250
Landes, John, Senior Vice President, Legal, ImClone Systems,
Inc........................................................ 257
Mendelsohn, John, Member of the Board of Directors, ImClone
Systems, Inc............................................... 253
Papineau, Frank, Detailee, Committee on Energy and Commerce;
and Raymond Weiss, Consultant in Oncology, Clinical
Professor of Medicine, Lombardi Cancer Center.............. 18
Smaldone, Laurie, Senior Vice President, Global Regulatory
Sciences, Bristol-Myers Squibb Company..................... 64
Vaczy, Catherine, Vice President, Legal, ImClone Systems, Inc 258
Waksal, Samuel, former Chief Executive Officer, ImClone
Systems, Inc............................................... 58
Waksal, Harlan, Chief Executive Officer, ImClone Systems,
Inc.:
June 13, 2002............................................ 61
October 10, 2002......................................... 255
(iii)
AN INQUIRY INTO THE IMCLONE CANCER-DRUG STORY
----------
THURSDAY, JUNE 13, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Oversight and Investigations,
Washington, DC.
The subcommittee met, pursuant to notice, at 9 a.m., in
room 2123, Rayburn House Office Building, James C. Greenwood
(chairman) presiding.
Members present: Representatives Greenwood, Bilirakis,
Stearns, Gillmor, Burr, Whitfield, Bass, Fletcher, Tauzin (ex
officio), Stupak, DeGette, and Rush.
Staff present: Alan Slobodin, majority counsel; Mark
Paoletta, majority counsel; Tom Dilenge, majority counsel; Tony
Cooke, majority counsel; Will Carty, legislative clerk; David
Nelson, minority investigator and economist; and Jessica
McNiece, minority staff assistant.
Mr. Greenwood. The subcommittee will come to order. It is
the Chair's intention to recess the subcommittee until 10:30 or
20 minutes after the conclusion of the full committee markup,
whichever is later. The Chair reminds witnesses who have
received a subpoena that they remain subject to the committee's
compulsory process. The committee stands in recess until 10:30
a.m. or 20 minutes after the conclusion of the full committee
markup, whichever is later.
[Brief recess.]
Mr. Greenwood. The meeting will come to order. The Chair
recognizes himself for an opening statement.
In the past, when Americans of my generation have thought
about the development of life-saving miracle drugs, the images
most likely to come to mind have been those of self-effacing
men of science, like Alexander Fleming and Jonas Salk. In 1952,
when Salk was convinced that he had developed a vaccine for the
deadly scourge of polio, he didn't rush out to the marketplace
with effusive praise either to the drugs efficacy or its money
making possibilities. Instead he vaccinated volunteers,
including his wife and three sons. And only when it became
clear that even though the volunteers had developed antibodies
to the disease, none had become ill, did he finally publish his
findings the following year in the Journal of the American
Medical Association.
Now flash forward to 2001. Another doctor, this time with a
Ph.D. in immunology, claims that his company is bringing
another miracle drug to the market. Like Salk in 1952, the
disease he is researching strikes down roughly 60,000 thousand
Americans each year. That disease is colorectal cancer. The
name of this new drug is Erbitux. And here the similarity comes
to a glaring halt.
It appears that, instead of concentrating his focus on the
need to carefully conduct clinical trials that the introduction
of a breakthrough medicine demands, ImClone seemed more focused
on the sales pitch. Dr. Samuel Waksal is quoted as having said
that Erbitux was, ``going to be the most important new oncology
launch ever.'' Investors and hopeful patients alike were told
that the results of ImClone's pivotal clinical trial were,
``knock-your-socks-off exciting.''
While others who had invested and hoped and perhaps prayed
for a cure were busy having their hopes dashed, Dr. Samuel
Waksal and others close to him appear to have been too busy
cashing out to pay attention to those for whom the success or
failure of Erbitux represented the difference between life and
death.
Today the subcommittee examines the unraveling of ImClone,
whose highly publicized race to develop and market what some
thoughtful researchers still consider to be a promising
therapy, failed so spectacularly. Presently, only two drugs
have established efficacy for treatment of metastatic
colorectal cancer. If these drugs are not effective in a
particular patient, there is no real therapy available to save
that patient.
ImClone sought accelerated approval for Erbitux to meet
this unmet medical need of colorectal cancer patients who had
failed standard chemotherapy treatments. For these patients
with no other options, many believed that Erbitux was their
best hope at survival, and late last year they had every reason
to count on a speedy FDA approval. These cancer patients and
their families were told that Erbitux was a leading monoclonal
antibody, part of a new class of targeted therapies, drugs such
as Gleevec and Herceptin, that doctors hoped would
revolutionize cancer treatment and would not cause the severe
side effects of toxic chemotherapy.
They were assured by ImClone that Erbitux was going to be
approved in early 2002. They believed in a company that had a
number of leading oncologists on its board of directors. They
believed in a company that in October 2001 had entered into a
much publicized and record setting $2 billion strategic
agreement with a leading pharmaceutical maker, Bristol-Myers
Squibb, an agreement which included an up-front $1 Billion
tender offer for ImClone stock from Bristol to ImClone's
existing shareholders at the premium price of $70 a share.
On December 17, 2001, ImClone was one of seven
biotechnology companies included for the first time in the
NASDAQ 100 index. Excitement and confidence in ImClone were
reflected in such media reports as a December 26, 2001 Los
Angeles Times story, which proclaimed, in almost giddy
language, that ``Erbitux, a colon cancer treatment from ImClone
Systems Inc., is set to make one of the biggest splashes of
2002.''
Yet just days later, the hopes of cancer patients were
crushed when they learned that the deficiencies in the Erbitux
clinical trials were so severe that FDA took the rare action of
issuing a refusal-to-file letter. This meant that, under the
60-day deadline to determine whether a new product licensing
application was adequate enough to be evaluated, FDA found such
serious deficiencies that the agency could not even continue
its review.
After announcing FDA's refusal-to-file letter, ImClone
executives told investors and the public that the problem was
simply some missing documentation and suggested that it was an
easily fixable problem of supplying the missing proof in the
pivotal study. But soon thereafter, excerpts of the non-public
FDA refusal-to-file letter appeared in a trade publication,
revealing the real truth behind the FDA's action: The clinical
study problems were much more than a failure to provide some
data elements. To bring the drug to market, ImClone would need
to conduct additional studies to demonstrate the drug's
efficacy as a combination therapy for cancer, which would take
substantial amounts of time and could in fact raise more
questions about Erbitux than they would answer.
How did a highly touted drug like Erbitux, which attracted
the interest of Bristol-Myers Squibb to the tune of $2 billion,
stumble so completely before even arriving at the regulatory
starting gate? Cancer patients and their families want to know.
And this subcommittee chairman wants to know too.
Today, the subcommittee's investigative detailee,
accompanied by the committee's scientific consultant, will
present the preliminary staff report on this matter. Here are
some of the staff's key findings: FDA refused to file ImClone's
application not just because of missing documentation and data
discrepancies, but also because the pivotal study was neither
adequate nor sufficiently well-controlled to meet Federal
requirements. Yet, in an August 2000 meeting between ImClone
and FDA to discuss this study, ImClone's proposed study design
to support accelerated approval was deemed by FDA to be
probably acceptable.
FDA's decision to accept the protocol design in effect
overruled the initial recommendation of the primary FDA medical
reviewer, who argued it failed to meet Federal requirements.
Moreover, FDA's decision appears to be based on a significant
misunderstanding as to the rigor of the study protocol, a
misunderstanding that should have been quite apparent to
ImClone from its discussions with FDA, but one ImClone did not
seek to correct.
As FDA reviewers examined the study more closely in the
context of ImClone's formal licensing application, these
protocol design issues finally received the attention they
deserved, but by that point it was too late to turn back.
Either FDA accepted the application for licensing, despite
these flaws, or refused it and sent ImClone back to the drawing
board. As we all know, FDA chose the latter option.
Moreover, the due diligence performed by Bristol and the
examination by the committee's scientific consultant of
ImClone's pivotal study raise similar questions about whether
Erbitux really works better in combination with another drug,
or whether Erbitux truly has a clinically meaningful effect on
colorectal cancer. I understand that ImClone and Bristol are
planning to conduct additional studies on these issues and for
the sake of cancer patients, I wish them well. But we now know
that the promising response rates publicized by ImClone based
on this study do not appear nearly as promising as they once
did and may in fact be clinically and statistically
meaningless.
Before receiving the refusal-to-file letter on December 28,
2001, ImClone had received signals from FDA as early as
December 4 that a refusal-to-file letter was a realistic
possibility given the concerns FDA had about ImClone's
application. Certainly by December 20, after a phone call in
which FDA told representatives of ImClone and Bristol to no
longer contact the agency until it sent a decision letter on
December 28, both ImClone and Bristol believed that a refusal-
to-file letter was a probable result, according to interviews
and records. In fact, on December 25, 2001, Brian Markison from
Bristol called Harlan Waksal at ImClone to inform him that
Bristol had confirmed from FDA that ImClone would be getting a
refusal-to-file letter. The next day, ImClone sent a letter to
FDA in an attempt to forestall the negative decision, and on
December 27, Sam Waksal, ImClone's CEO at the time, personally
called FDA in an attempt to stop the refusal-to-file letter. He
was not successful.
Adding to the ImClone controversy, on that same day,
December 27, and perhaps on December 28 as well, several family
members and friends of Sam Waksal sold significant volumes of
shares of ImClone stock, all prior to the public announcement
of the FDA's December 28 refusal-to-file letter. For example,
Sam's daughter, Aliza, sold $2.5 million of stock while she was
on vacation. At the same time, Sam gifted to her twice the
number of shares she had sold. Incidentally, the amount of
these gifted shares was the same as the amount of shares that
SEC now alleges that Sam Waksal moved from his own account but
was unable to trade these shares through Aliza's account
because broker-dealers refused to execute the trades without
approval by ImClone's counsel.
In another example, Martha Stewart, who had been a long-
time investor in ImClone and friend of Sam Waksal, sold all of
what was left of her ImClone holdings on December 27. Phone
records indicate a telephone call between Ms. Stewart and Dr.
Waksal on that same date.
Yesterday, the SEC charged Sam Waksal with illegal insider
trading, alleging that he had alerted certain family members
about the refusal-to-file letter before it became public
knowledge, who in turn sold large volumes of ImClone stock
before the market learned of the negative FDA action.
In addition to the stock trading activity in late December
of last year, the committee's investigation also reviewed the
purchase and sale of ImClone stock by ImClone's directors and
top executives during the months leading up to the Bristol $1
billion tender offer, which was consummated in October 2001. On
October 29, 2001, 2 days before ImClone completed its
application submission for Erbitux to FDA, Sam and Harlan
Waksal, the founders and top executives of ImClone, sold
approximately 1.4 million shares of ImClone stock to Bristol
for about $111 million. However, unlike all the other ImClone
shareholders who tendered shares to Bristol, the Waksals were
helped in part by loans of about $35 million that they received
from ImClone several months before, so that they could exercise
their options to purchase ImClone stock at highly discounted
prices.
These findings, and other information contained in the
staff report and in our witnesses' testimony, will be of great
interest to the subcommittee. One of our chief concerns is
assuring public confidence in our biotechnology/pharmaceutical
industry and the FDA process. When there is a suspicion that we
are not getting all the facts about a new drug, investment
dries up and clinical trial enrollments stall. We must look
seriously at whether the secrecy of the FDA approval process
can be, or has been, abused and exploited for personal gain,
and whether useful drugs are delayed because of flawed
development strategies and internal FDA confusion.
The saga of failures like ImClone leads to a loss in
confidence, not only in the possibilities of the science, but
in the firms that seek to bring new cures to market and the
public officials who must approve these cures and regulate
these markets. My hope is that the lessons we draw from this
debacle will enable us to provide improved direction to the
companies, investors and the regulators who need to work
cooperatively and openly if we hope to continue to bring the
promise of science to the American people.
The Chair recognizes the gentleman, Mr. Stupak, for his
opening statement.
[The prepared statement of Hon. James C. Greenwood
follows:]
Prepared Statement of Hon. James Greenwood, Chairman, Subcommittee on
Oversight and Investigations
In the past, when Americans of my generation have thought about the
development of life-saving miracle drugs, the images most likely to
come to mind have been those of self-effacing men of science like
Alexander Fleming and Jonas Salk. In 1952, when Salk was convinced that
he had developed a vaccine for the deadly scourge of polio, he didn't
rush out to the marketplace with effusive praise either to the drugs
efficacy or it's money making possibilities. Instead he vaccinated
volunteers, including his wife and three sons. And only when it became
clear that, even though the volunteers had developed antibodies to the
disease, none had become ill, did he finally publish his findings, the
following year, in the Journal of the American Medical Association. Now
flash forward to 2001. Another Doctor, this time with a PHD in
immunology, claims that his company is bringing another miracle drug to
the market.
Like Salk in 1952, the disease he is researching strikes down
roughly 60,000 thousand Americans each year. That disease is colorectal
cancer. The name of this new drug is Erbitux. Here the similarity comes
to a glaring halt.
It appears that, instead of concentrating his focus on the need to
carefully conduct clinical trials that the introduction of a
breakthrough medicine demands, ImClone seemed more focused on the sales
pitch. Dr. Samuel Waksal is quoted as having said that Erbitux was, ``.
. . going to be the most important new oncology launch ever.''
Investors and hopeful patients alike were told that the results of
ImClone's pivotal clinical trial were, ``. . . knock-your-socks-off
exciting.''
While others who had invested and hoped and perhaps prayed for a
cure were busy having their hopes dashed, Dr. Waksal and others close
to him appear to have been too busy cashing out to pay attention to
those for whom the success or failure of Erbitux represented the
difference between life and death.
Today the Subcommittee examines the unraveling of ImClone, whose
highly publicized race to develop, and market what some thoughtful
researchers still consider to be a promising therapy, failed so
spectacularly.
Presently, only two drugs have established efficacy for treatment
of metastatic colorectal cancer. If these drugs are not effective in a
particular patient, there is no other real therapy available to save
that patient.
ImClone sought accelerated approval for Erbitux to meet this unmet
medical need of colorectal cancer patients who had failed standard
chemotherapy treatments. For these patients with no other options, many
believed that Erbitux was their best hope at survival, and late last
year they had every reason to count on a speedy FDA approval.
These cancer patients and their families were told that Erbitux was
a leading monoclonal antibody, part of a new class of ``targeted
therapies''--drugs such as Gleevec and Herceptin--that doctors hoped
would revolutionize cancer treatment and would not cause the severe
side effects of toxic chemotherapy.
They were assured by ImClone that Erbitux was going to be approved
in early 2002. They believed in a company that had a number of leading
oncologists on its Board of Directors. They believed in a company that,
in October 2001, had entered into a much-publicized and record-setting
$2 BILLION strategic agreement with a leading pharmaceutical maker,
Bristol-Myers Squibb--an agreement which included an up-front $1
BILLION tender offer for ImClone stock from Bristol to ImClone's
existing shareholders at the premium price of $70 a share.
On December 17, 2001, ImClone was one of seven biotechnology
companies included for the first time in the NASDAQ 100 index.
Excitement and confidence in ImClone was reflected in such media
reports as a December 26, 2001 Los Angeles Times story, which
proclaimed, in almost giddy language, that ``Erbitux, a colon cancer
treatment from ImClone Systems Inc., is set to make one of the biggest
splashes of 2002.''
Yet just days later, the hopes of cancer patients were crushed when
they learned that the deficiencies in the Erbitux clinical trials were
so severe that FDA took the rare action of issuing a refusal-to-file
letter. This meant that, under the 60-day deadline to determine whether
a new product licensing application was adequate enough to be
evaluated, FDA found such serious deficiencies that the agency could
not even continue its review. After announcing FDA's refusal-to-file
letter, ImClone executives told investors and the public that the
problem was simply some missing documentation, and suggested that it
was an easily fixable problem of supplying the missing proof in the
pivotal study. But soon thereafter, excerpts of the non-public, FDA
refusal-to-file letter appeared in a trade publication, revealing the
real truth behind the FDA's action: the clinical study problems were
much more than a failure to provide some data elements.
To bring the drug to market, ImClone would need to conduct
additional studies to demonstrate the drug's efficacy as a combination
therapy for cancer, which would take substantial amounts of time and
could in fact raise more questions about Erbitux than they would
answer.
How did a highly-touted drug like Erbitux, which attracted the
interest of Bristol/Myers/Squibb to the tune of $2 billion, stumble so
completely before even arriving at the regulatory starting gate? Cancer
patients and their families want to know. And this Subcommittee
Chairman wants to know.
Today, the Committee's investigative detailee, accompanied by the
Committee's scientific consultant, will present the preliminary staff
report on this matter. Here are some of the staff's key findings:
<bullet> FDA refused to file ImClone's application not just because of
missing documentation and data discrepancies, but also because
the pivotal study was neither adequate nor sufficiently well-
controlled to meet Federal requirements.
Yet, in an August 2000 meeting between ImClone and FDA to discuss
this study, ImClone's proposed study design to support
accelerated approval was deemed by FDA to be ``probably
acceptable.''
<bullet> FDA's decision to accept the protocol design in effect
overruled the initial recommendation of the primary FDA medical
reviewer, who argued it failed to meet Federal requirements.
Moreover, FDA's decision appears to be based on a significant
misunderstanding as to the rigor of the study protocol--a
misunderstanding that should have been quite apparent to
ImClone from its discussions with FDA, but one ImClone did not
seek to correct. As FDA reviewers examined the study more
closely in the context of ImClone's formal licensing
application, these protocol design issues finally received the
attention they deserved, but by that point it was too late to
turn back--either FDA accepted the application for licensing,
despite these flaws, or refused it and sent ImClone back to the
drawing board. As we all know, FDA chose the latter option.
<bullet> Moreover, the due diligence performed by Bristol, and the
examination by the Committee's scientific consultant, of
ImClone's pivotal study raise similar questions about whether
Erbitux really works better in combination with another drug,
and whether Erbitux truly has a clinically meaningful effect on
colorectal cancer. I understand that ImClone and Bristol are
planning to conduct additional studies on these issues and, for
the sake of cancer patients, I wish them well. But we now know
that the promising response rates publicized by ImClone based
on this study do not appear nearly as promising as they once
did, and may in fact be clinically and statistically
meaningless.
<bullet> Before receiving the refusal-to-file letter on December 28,
2001, ImClone had received signals from FDA as early as
December 4th that a refusal-to-file letter was a realistic
possibility given the concerns FDA had about ImClone's
application.
<bullet> Certainly by December 20th, after a phone call in which FDA
told representatives of ImClone and Bristol to no longer
contact the agency until it sent a decision letter on December
28th, both ImClone and Bristol believed that a refusal-to-file
letter was a probable result, according to interviews and
records.
<bullet> In fact, on December 25, 2001, Brian Markison from Bristol
called Harlan Waksal at ImClone to inform him that Bristol had
confirmed from FDA that ImClone would be getting a refusal-to-
file letter. The next day, ImClone sent a letter to FDA in an
attempt to forestall the negative decision, and on December
27th, Sam Waksal, ImClone's CEO at the time, personally called
FDA in an attempt to stop the refusal-to-file letter. He was
not successful.
<bullet> Adding to the ImClone controversy, on that same day, December
27th, and perhaps on December 28th as well, several family
members and friends of Sam Waksal sold significant volumes of
shares of ImClone stock--all prior to the public announcement
of the FDA's December 28th refusal-to-file letter. For example,
Sam's daughter, Aliza (A-leeza), sold $2.5 million of stock
while she was on vacation. At the same time, Sam gifted to her
twice the number of shares she had sold. Incidentally, the
amount of these gifted shares was the same as the amount of
shares that the SEC now alleges that Sam Waksal moved from his
own account, but was unable to trade these shares through
Aliza's account because broker-dealers refused to execute the
trades without approval by ImClone's counsel.
<bullet> In another example, Martha Stewart, who had been a long-time
investor in ImClone and friend of Sam Waksal, sold all of what
was left of her ImClone holdings on December 27th. Phone
records indicate a telephone call between Ms. Stewart and Dr.
Waksal on that same date.
Yesterday, the SEC charged Sam Waksal with illegal insider trading,
alleging that he alerted certain family members about the refusal-to-
file letter before it became public knowledge, who in turn sold large
volumes of ImClone stock before the market learned of the negative FDA
action.
In addition to the stock trading activity in late December of last
year, the Committee's investigation also reviewed the purchase and sale
of ImClone stock by ImClone's directors and top executives in the
months leading up to the Bristol $1 billion tender offer, which was
consummated in October 2001. On October 29, 2001, two days before
ImClone completed its application submission for Erbitux to FDA, Sam
and Harlan Waksal, the founders and top executives of ImClone, sold
about 1.4 million shares of ImClone stock to Bristol for about $111
million. However, unlike all the other ImClone shareholders who
tendered shares to Bristol, the Waksals were helped in part by loans of
about $35 million that they received from ImClone several months
before, so that they could exercise their options to purchase ImClone
stock at highly discounted prices.
These findings, and other information contained in the staff report
and in our witnesses' testimony, will be of great interest to the
Subcommittee. One of our chief concerns is assuring public confidence
in our biotechnology/pharmaceutical industry and the FDA process. When
there is a suspicion that we are not getting all the facts about a new
drug, investment dries up and clinical trial enrollments stall. We must
look seriously at whether the secrecy of the FDA approval process can
be--or has been--abused and exploited for personal gain, and whether
useful drugs are delayed because of flawed development strategies and
internal FDA confusion.
The saga of failures like ImClone leads to a loss in confidence,
not only in the possibilities of the science, but in the firms that
seek to bring new cures to market and the public officials who must
approve these cures and regulate these markets.
My hope is that the lessons we draw from this debacle will enable
us to provide improved direction to the companies, investors and the
regulators who need to work cooperatively and openly if we hope to
continue to bring the promise of science to the American people.
Mr. Stupak. Thank you, Mr. Chairman--and also I think your
opening statement certainly reviewed the investigation done by
our respective staffs in this matter. I believe today's
hearings raises a number of issues of importance to the Food
and Drug Administration, the manufacturers of new drugs and
biologics, investors, large and small, and most importantly the
victims of cancer and their loved ones.
The ImClone story is not a happy one. We still do not know
if Erbitux, a cancer drug developed by ImClone, will be a
useful tool in the fight against colorectal and other cancers.
Only good and careful science, not anecdotal reports and
certainly not inflated and inaccurate hype, will answer this
question.
Last spring and summer, patients and their doctors were led
to believe that a treatment for colorectal cancer, the second
most prevalent, and one of the most deadly, was at hand, when
the truth was that the drug had not been studied rigorously
enough to determine what value Erbitux might have for the
treatment of colorectal or other cancers. Erbitux does show
activity and may yet prove to be another useful tool for some
patients in the battle with a disease that is extremely
resistant to treatment.
ImClone was in a position to understand how unlikely FDA
approval was based on a registration study and another single
arm study submitted last fall. But patients and oncologists
were not informed that the proposed registration study was so
incomplete and that despite six more months of trying, Bristol-
Myers Squibb with all their expertise and resources has still
not completed the residual work necessary for resubmission to
the FDA.
Investors had no idea that ImClone was submitting, at best,
a marginal application under an expedited procedure that must,
and demands, rigorous standards and the conduct and reporting
of the pivotal study and statistical power in the results. The
ImClone application was so defective and the results were so
inconclusive that any hope of an accelerated approval may have
evaporated.
All this suggests that had the principals of ImClone
decided that they would do a better design and a much better
executed study instead of submitting a poorly designed and
executed Phase II study, then cancer patients, their loved ones
and the oncologists that treat them might have had Erbitux
available this year.
Mr. Chairman, I believe that our respective staffs have
done an excellent job. I believe that the staff has framed the
issues accurately. I look forward to this hearing today. I look
forward to answering questions, and I appreciate the work our
staffs have done, and I think we owe them a great deal of
gratitude bringing us up to date. I know they have worked on
this for a long time. So I am ready to move on with this
hearing. I will yield back the balance of my time.
[The prepared statement of Hon. Bart Stupak follows:]
Prepared Statement of Hon. Bart Stupak, a Representative in Congress
from the State of Michigan
Today's hearing raises a number of issues of importance to the Food
and Drug Administration (FDA), the manufacturers of new drugs and
biologics, investors large and small and, most importantly, to the
victims of cancer and their loved ones. The ImClone story is not a
happy one. We still do not know if Erbitux, the cancer drug developed
by ImClone will be a useful tool in the fight against colorectal and
other cancers. Only good and careful science, not anecdotal reports and
certainly not inflated and inaccurate hype will answer that question.
Last Spring and Summer, patients and their doctors were led to
believe that a treatment for colorectal cancer, the second most
prevalent and one of the most deadly forms of that disease, was at hand
when the truth was that the drug had not been studied rigorously enough
to determine what value it might have for the treatment of colorectal
or other cancers.
Erbitux does show activity and may yet prove to be another useful
tool for some patients in the battle with a disease that is extremely
resistant to treatment.
ImClone was in a position to understand how unlikely FDA approval
was based on the registration study and another single arm study
submitted last fall. But patients and oncologists were not informed
that the proposed registration study was so incomplete that despite six
more months of trying, Bristol Meyers Squibb, with all their expertise
and resources has still not completed the residual work necessary for
re-submission to FDA.
Investors had no idea that ImClone was submitting, to be generous,
a marginal application under an expedited procedure that must require
rigor in the conduct and reporting of the pivotal study and statistical
power in the results. The ImClone application was so defective and the
results were so inconclusive that any hope of accelerated approval has
probably evaporated.
All of this suggests that had the principals of ImClone decided
that they would do a better designed and much better executed study
instead of merely submitting a poorly designed and executed Phase II
study that they had on the shelf, the cancer patients, their loved
ones, and the oncologists that treat them, might have had Erbitux
available this year. Clearly, the sale of the company, not approval of
the drug, was the Waksal priority.
Mr. Chairman, I believe that this investigation has been conducted
properly and the staff has framed the questions accurately. I look
forward to hearing the testimony and the response to the many questions
yet to be answered.
Mr. Greenwood. The Chair thanks the gentleman and
recognizes the chairman of the full committee, Mr. Tauzin.
Chairman Tauzin. Thank you, Mr. Chairman. Mr. Chairman, I
want to commend you again and the staffs of both sides of our
committee for the excellent work in investigating this
extraordinary story. The fact is that there are two stories
here today. One of the stories will be more fully told by the
SEC and the Justice Department as it examines how the FDA
process and what appears to be some rather amoristic players
conspired in a way that allowed insider trading to potentially
occur and an awful lot of investors to lose a lot of money
while insiders were trading on information that was available
only to them in an attempt to cash out on what could be, and
what was promised to be, a very promising drug for cancer
patients.
The other story is about the process at FDA and how the FDA
process allowed this to happen. And that story has more to do
with cancer patients around America who lived with the hope,
the expectation and the promise that Erbitux was everything it
was hyped up to be and that it would be available by spring,
right now, for cancer patients who are living only with this
hope in mind, that finally something had been developed that
would extend their lives. We were told, and Sam Waksal was one
of those telling us, that Erbitux, according to him, and I
quote, ``is going to be huge. It is going to be one of the
biggest drugs in the history of oncology, a drug that is going
to alter the way that cancer therapy is done.''
ImClone reported 400 calls a day from patients desperate to
get Erbitux outside of clinical trials. And every indication
was that the drug was not only everything it was promised to be
but that it would be available by this spring. And the story
that unfolds in our investigation is that while ImClone
deserves a lot of credit over the years of research into these
monoclonal antibodies, which may yet pay off 1 day for these
patients, that the leadership of this company was apparently
more intent on immediately cashing in on the promise that
Erbitux held out for the patients instead of being carefully
conscious of delivering on those promises sooner rather than
later.
Erbitux had some pretty big names behind it and had the
giants of the clinical oncology world on its board. It had John
Mendelsohn and Vincent DeVita. And we learned in this
investigation that the leadership of this company had total
control over what information would be released to the public,
about its own studies and about the quality of this new product
and about its potential since under our rules FDA is prohibited
and restricted under Federal law from talking about such
proprietary information. So we have a process whereby FDA is
being restricted on what it can say about the clinical studies
and about what is happening with this drug, while the company
can go out and hype it and take advantage of it financially,
while at the same time, according to our investigation,
recognizing all the while that its studies were flawed and
there were problems with the FDA approval process.
Now that is the sad story. The saddest story is not about
investors losing money or about the fact that some of these
people are facing now SEC and Justice Department investigations
and, as we have learned just recently, indictments. The sad
thing is that our investigation is opening the black box of the
FDA process for public review, and what we see is a drug
development and FDA review system that is not necessarily
serving the best interest of America's people and its cancer
victims in this case.
Now, our job, Mr. Chairman, is primarily to examine that
process, to see how this train wreck occurred and to see why
the promise of a drug that could still hold such great hope for
cancer patients was denied them because of a process that fell
apart like this; instead yielded only financial gains to people
who took advantage of it. If we end up with a process where
drug approval strategies don't work in the interest of our
patients in America, but simply allow companies to hype their
stock and personally enrich their executives and shortchange
their clinical research in the process, and if we have an FDA
that sort of hangs back while the company falls on its face
with such a high risk approval strategy, as was developed in
this case, then it is not just the company who loses the
gamble, it is the American public who loses, and most
importantly the cancer patients who really by this spring, by
now, were led to believe that there was really something great
on the horizon that would be available now for them and give
them life and hope.
Now, we have got to fix this system, and if your hearings
point the way for FDA and for us, we in the Congress, who have
jurisdiction in this area to make some changes to make sure
this kind of a train wreck doesn't happen again, we will leave
it to the Justice Department and the SEC to deal with the
miscreants here, but we ought to give cancer patients who are
desperate for hope in a drug like Erbitux a chance to have it
really tested and proven out. And if it is as good as some
people think it is, that they have the advantage of having it
in the marketplace and available to them before it is too late.
And that is the task, that is the task of this committee, and I
commend you for taking it on. I yield back.
[The prepared statement of Hon. W.J. ``Billy'' Tauzin
follows:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Thank you, Chairman Greenwood, and let me commend you for holding
this hearing on ImClone Systems and its much touted ``miracle'' cancer
drug, Erbitux. We have much to learn from the story of this drug. And I
believe the story of this drug provides an opportunity to examine the
drug development and FDA review systems. We need to make sure these
systems work for patients.
Cancer patients and their families had great hopes that Erbitux
would be on the market by now. They and the media believed all that was
asserted by ImClone and its prominent backers. ImClone's CEO, Sam
Waksal, promised that ``Erbitux is going to be huge. It is going to be
one of the biggest drugs in the history of oncology--a drug that is
going to alter the way cancer therapy is done.''
Imagine what cancer patients thought when they heard that
statement. ImClone reportedly received 400 calls a day from patients
desperate to get Erbitux outside of clinical trials. By late last
fall--when ImClone filed its application with the FDA--there were very
sick colon cancer patients holding onto hope that Erbitux would be on
the market by this Spring--by now. But when ImClone's clinical research
package was finally unveiled to the FDA, it had so many problems, the
FDA could not even review it.
ImClone certainly deserves credit for its years of research into
monoclonal antibodies, which still may pay off for patients in the
future. Unfortunately, when the company should have been paying more
attention to the quality of its clinical trials, its leadership
appeared more intent on immediately cashing in on Erbitux's promise--
and delivering for cancer patients later, if ever.
ImClone had the selling points to boost its stock and raise the
hopes of dying cancer patients. Erbitux is a targeted therapy, and
targeted therapy is supposedly the future of cancer treatment. It had
the names, the giants of clinical oncology on its board--John
Mendelsohn, Vincent DeVita. It had a growing anti-cancer drug market.
And, most important, it had virtually total control over what
information would be released to the public about its studies since the
FDA is restricted under Federal law from talking about such proprietary
information.
Yet it appears, as our Committee investigation has revealed, that
ImClone was so excited by preliminary response rates in very sick colon
cancer patients, it tried to take a mediocre clinical trial and gussy
it up as a study worthy of an accelerated approval by itself. But when
it became crunch time to get FDA approval, the failure of ImClone's key
executives to ensure the quality of its clinical trials collided with
the hype. And, all the while, ImClone's insiders were lining their own
pockets with millions, as ImClone's publicly-traded stock soared on
false, public promises.
Now the SEC has alleged that Sam Waksal knew about the FDA's
refusal-to-file letter two days before it was issued and that he tipped
off family members who sold $10 million of ImClone stock. As Vee Kumar,
a 47-year school psychologist and colon cancer patient from Kirkland,
Washington, told Vanity Fair magazine: ``There is no excuse for raising
patients' hopes and then not delivering. There's been a lot of talk
about ImClone's monetary rewards from Erbitux, but not enough about
getting it to the patients who need it. They really ought to have done
their homework better.''
I understand that the preliminary Committee staff report reveals
additional problems in the clinical package ImClone submitted to the
FDA, and lays out the series of actions by ImClone, its strategic
partner Bristol-Myers Squibb, and FDA that led to this debacle. This
Committee's investigation opens the black box of the FDA process, and
reveals a drug-development and FDA review system that is not serving
the interests of the American people.
Through this inquiry, I hope we can prevent such train wrecks in
the future. Drug companies and the FDA should develop drug approval
strategies that work in the patient's interest--not so that companies
can hype stock, personally enrich executives, and short-change clinical
research; not so that the FDA hangs back while a company falls on its
face with a high-risk approval strategy, as if it's just the company's
gamble. It may be the company's gamble, but if it fails, cancer
patients are the ones who really lose.
Mr. Chairman, I look forward to working with you to improve the
drug development system and to make that system really deliver for our
sickest patients.
Mr. Greenwood. The Chair thanks the chairman and
recognizes, for 3 minutes for purposes of an opening statement,
the gentlelady from Colorado, Ms. DeGette.
Ms. DeGette. Thank you so much, Mr. Chairman. The case of
ImClone presents what seems to have become a parable for our
times: an upstart corporation with tremendous financial
promise, corporate executives reaping fantastic financial,
soaring stock prices, in this case up to $70 a share, a
precipitous fall causing the stock to plummet tenfold back down
to $7, allegations of insider trading by the officers of the
company and their close friends. But here is the difference
here, and I agree but I disagree a little with my chairman
because I don't think it is a second story, I think it is an
interwoven story that relates directly to all the things I just
listed, and that is tens of thousands of cancer patients who
are hanging on to the thread of a hope that Erbitux would be
added to the two existing therapies for deadly colorectal
cancer. The foibles of the key players here, corporate
executives, researchers and FDA reviewers, did not just result
in tremendous financial losses to investors but also devastated
cancer patients' hopes.
Nowhere else in the world is there a greater confluence of
pharmaceutical/biotech industry growth, shareholder expectation
of large profit margins, high hopes among patients for new and
innovative therapies and confidence among the American people
that the appropriate regulatory agency, the Food and Drug
Administration, is providing the appropriate oversight.
To address at least two of these issues, quick approval of
new and innovative therapies and government oversight of the
process, Congress established an accelerated approval process
as part of the 1997 Food and Drug Administration Modernization
Act, or FDAMA, which was a comprehensive overhaul of the
Nation's food, drug and medical device laws. The Fast Track
approval process was created for getting therapies that
demonstrate the potential to help dying patients to the
marketplace quickly. While the Fast Track process bypasses the
rigors of a large-scale Phase III trial, it should not and must
not allow products to bypass rigorous and sound scientific
review. Unfortunately, there seems to be evidence that this is
exactly what happened in the case of Erbitux.
It appears that too many people dropped the ball throughout
the approval process in this particular case, from the
executives and scientists at ImClone who designed the flawed
clinical trials, to Bristol-Myers Squibb, ImClone's business
partner, who was aware of the trial's flaws, including the too
small sample size, and enrollment of patients who did not meet
the eligibility criteria. From the FDA's mishandling of the
study's protocol design to the issuance of the refuse-to-file
letter, sloppy work abounded throughout this process and no one
is without blame. I can assure you that all of our votes for
FDAMA were not made with the intent of relaxing the rules.
However, what dismays us the most is this impact this case
may have on other therapies that will be seeking Fast Track
approval in the future, including this therapy, by the way,
therapies that could have the potential cure for millions of
people or even just extend their lives for another day, a month
or a year. Like many of my colleagues, I receive hundreds of
letters every year from constituents asking to facilitate quick
FDA approval for therapies, therapies like for multiple myeloma
and thalidomide, therapies for irritable bowel syndrome or
lontronix and on and on.
I am sympathetic to these patients. On the other hand, the
United States has perhaps the world's most stringent standards
for approving new drugs. We cannot shirk our duty to take a
long, hard look at the approval process. Our job, Mr. Chairman,
as I see it today, is to examine how we can foster speedy
approval of new drugs, especially in cases where there are few
alternatives, while at the same time ensuring that they are
safe and effective. I yield back.
[The prepared statement of Hon. Diana DeGette follows:]
Prepared Statement of Hon. Diana DeGette, a Representative in Congress
from the State of Colorado
The case of ImClone presents what seems to have become almost a
parable for our times:
--An upstart corporation with tremendous financial promise;
--Corporate executives reaping fantastic financial gains;
--Soaring stock prices;
--A precipitous fall--causing the stock to plummet ten-fold;
--Allegations of insider trading by the officers of the company and
their close friends.
But here's the difference: Tens of thousands of cancer patients
were hanging on to the thread of a hope that Erbitux would be added to
the two existing therapies for deadly colo-rectal cancer. The foibles
of the key players here--corporate executives, researchers, and FDA
reviewers do not just result in tremendous financial loses to
investors, but devastated cancer patent hopes. Our job as I see it
today, is to examine how we can foster speedy approval of new drugs,
especially in cases where there are few alternatives, while ensuring
their efficacy.
No where else in the world is there a greater confluence of
pharmaceutical/biotech industry growth, shareholder expectation of
large profit margins, high hopes among patients for new and innovative
therapies and confidence among the American people that the appropriate
regulatory agency, the Food and Drug Administration is providing the
appropriate oversight.
To address at least two of these issues, quick approval of new and
innovative therapies and governmental oversight of the process,
Congress established an accelerated approval process as part of the
1997 Food and Drug Administration Modernization Act (FDAMA), a
comprehensive overhaul of the nation's food, drug and medical device
laws.
The ``fast track'' approval process was created for getting
therapies that demonstrate the potential to help dying patients to the
marketplace quickly. While the fast track process bypasses the rigors
of a large-scale phase III trial, it should not, and must not, allow
products to bypass rigorous and sound scientific review. Unfortunately,
there seems to be evidence that this is exactly what happened in the
case of Erbitux.
It appears as though too many people dropped the ball throughout
the approval process in this particular case. From the executives and
scientists at Imclone who designed the flawed clinical trials, to
Bristol Myers Squibb, Imclone's business partner who was aware of the
trial's flaws including the too small sample size, and enrollment of
patients who did not meet the eligibility criteria. From the Food and
Drug Administration's mishandling of the study's protocol design to the
issuance of the refusal to file letter, sloppy work abounded through
this process.
I can assure you that my vote for passage of FDAMA was not made
with the intent of relaxing the rules, and I'm sure my colleagues that
sit here with me today have the same sentiment. By no means did the '97
Act include a relaxation of any of the rules. There was nothing in it
that came close to subverting rigorous reviews of the scientific merits
of protocols.
However, what dismays me most is the impact that this case may have
on other therapies that will be seeking fast track approval in the
future. Therapies that could have the potential cure for millions of
people, or even just extend their lives for another day, a month, a
year.
Like many of my colleagues, I receive hundreds of letters each year
from constituents asking me to help facilitate quick FDA approval for
the one therapy that might be able to ease their pain, or extend their
own, or a loved one's, life.
For instance, I have received letters from sufferers of diseases
such as multiple myeloma, an incurable form of blood cancer, who are
desperate for Thalidomide, a drug with a long history associated with
birth defects. Just the other day I got a letter from a constituent who
suffers from irritable bowel syndrome pleading that I do everything I
can to facilitate the return of Lotrinex to the market.
I am very, very sympathetic to these people both as their elected
representative, and in my capacity as a public servant who votes on
legislation that effects every single person in this country. They are
looking to us to facilitate the approval of effective and safe
medications. And for good reason. The United States has perhaps the
world's most stringent standards for approving new drugs. We cannot
shirk our duty to take a long hard look at the approval process.
Mr. Greenwood. The Chair thanks the gentlelady and
recognizes for 3 minutes for an opening statement the gentleman
from Kentucky, Dr. Fletcher.
Mr. Fletcher. Thank you, Mr. Chairman. I think you have
reviewed certainly the situation well. I appreciate very much
you holding this hearing. Your statements, as well as the
chairman of the full committee, certainly reflect my feelings.
And in the interest of time and moving on, I would like to
submit my opening statement to the committee, if that is okay.
Mr. Greenwood. The gentleman's statement will be made part
of the record.
[The prepared statement of Hon. Ernie Fletcher follows:]
Prepared Statement of Hon. Ernie Fletcher, a Representative in Congress
from the State of Oklahoma
Chairman Greenwood; thank you for having this hearing today.
As a physician I have seen the devastation that Cancer can cause. I
have seen the emotion and physical destruction that this disease brings
to patients and their families.
In the US where we have one of the best healthcare systems in the
world, there will be more than 1.2 million new cancer cases diagnosed
in 2002. This year about 555,000 people will die from cancer.
It is no surprise that patients and physicians are excited when a
promising new drug or therapy becomes available. The Energy and
Commerce Committee has worked hard to see that groundbreaking research
can provide physicians with the tools to provide treatment for cancer.
While new drugs, Like Erbitux show great promise, we must also
balance their development with the public's interest. They must be
proved safe and effective before they are available for general use. We
need to make sure that the FDA is doing the best job possible to
balance these two issues. This hearing needs to look closely at how
this particular drug was handled and use that information to develop
policy that allows these new technologies to be available to patients
as quickly and safely as possible.
Mr. Greenwood. The Chair recognizes the gentleman from
Illinois, Mr. Rush, for an opening statement, for 3 minutes.
Mr. Rush. Thank you, Mr. Chairman. Mr. Chairman, I am very
glad and happy that you are convening this hearing. I want to
submit my full statement for the record and beg leave to
present my full statement for the record. But I also want to
state to you, Mr. Chairman, and to others who have gathered
here, to the entire subcommittee, that I am here with an open
mind. I have not reached any conclusions, I am not faulting any
participant at this point in time. I believe that this hearing
will lead me in a direction where I will be able to determine
for myself exactly what the problem is, what happened in this
particular case, in the case of Enron. And I will be able to
determine what I think is the appropriate way to deal with
this, both at the FDA and also in any other governmental body.
So I am here with an open mind, and I want to see exactly and
hear for myself what the issues are and who is at fault, if
there is anyone at fault in this particular case. Thank you,
and I yield back the balance of my time.
Mr. Greenwood. The Chair thanks the gentleman and
recognizes, for 3 minutes for an opening statement the
gentleman from Florida, Mr. Stearns.
Mr. Stearns. Thank you, Mr. Chairman. Of course, thank you
for holding this hearing today. The United States is the
foremost in the world today in biotechnological and
pharmaceutical innovation. It is unfortunate this scandal has
created in the minds of the public some trepidation. This is
one more scandal we have seen up here this year with the Enron
and Tyco and others, and the real question is, I think, how
could analysts and consumers be sure when they are investing in
these stocks where you have this executive, Sam Waksal, running
around, hyping his Erbitux as the blockbuster cancer drug of
all time, of the future, and meanwhile he is mortgaging his
shares for an $80 million loan? He is also getting other loans
that we can't determine completely. But how can the investor
and the analyst look at this company and decide whether or not
this man is hyping this for other reasons other than its true
picture of the drug? At the same time, he is submitting
applications to the FDA which do not have all the clinical
evidence.
So I am approaching this, Mr. Chairman, from the standpoint
of the consumer and the investor: How can he or she be sure
when they are investing in this corporation which is talking
about a blockbuster drug that the money that is being exercised
by the CEOs and the other investors who control the
corporations is being properly displayed, made public and
coincides with their activities?
So we have a history this year of several scandals. We need
to follow the money, we need to understand what his previous
activities were at the same time he is hyping this Erbitux
drug, and we need to protect the consumers, because in the end
the consumer is sitting out there thinking that the CEO is
correct. At the same time, the CEO has another ulterior motive.
So if somehow this hearing would bring to bear a better
understanding of what is more transparency on the P&L statement
and could help consumers to understand whether they should
continue investing, I think that would help bring more
confidence to the market. And, you can never be too skeptical.
I think that is what has happened here. And you can never be
too diversified in the sense that you are dealing with these
highly volatile stocks where you have the CEOs and their family
hyping this thing at the same time they are trying to sell off
their stock knowing inside information. So I commend you for
this hearing, and I look forward to the testimony.
[The prepared statement of Hon. Cliff Stearns follows:]
Prepared Statement of Hon. Cliff Stearns, a Representative in Congress
from the State of Florida
Mr. Chairman, thank you for holding this hearing today. The United
States is foremost in the world today in biotechnological and
pharmaceutical innovation. We boast the leadership role in the world in
new, lifesaving discoveries. For this, we can thank many parties:
capital-providing shareholders who fund the research; the brilliant
scientists and support staff of firms toiling at the bench to develop
new cures and treatments; the Food and Drug Administration regulators
and approvers who carefully examine submissions for accuracy and
worthiness. When a drug is on the FDA fast-track for approval because
it may be patients' last hope at a cure for a life-threatening
condition like cancer or AIDS, the proper functioning of the system
becomes all the more imperative.
For this system to work, there needs to exist complete honesty and
integrity in a company's operations. Yesterday (June 12), we learned
that the CEO of the company visiting us today, Samuel Waksal of
ImClone, evidently learned of the FDA's negative decision on ImClone's
flagship drug undergoing approval, Erbitux. According to the Securities
and Exchange Commission (SEC), Waksal and his relatives sold greater
than $10 million in Imclone stock in a period of 48 hours: on December
26 and December 27--a day before the FDA released its ``refuse-to-
file'' letter to ImClone on December 28. Further, Dr. Waksal's brother,
Harlan, we learn, sold roughly $50 million worth of shares on December
6, a day after FDA officials first indicated a negative review of the
application may be forthcoming. Further financial improprieties are the
fact that ImClone lent money to insiders through the exercise of
options based on ongoing, but not yet publicly disclosed, discussions
with collaborating pharmaceutical firm Bristol-Myers Squibb. As many of
us have know, executive compensation via options lacks clear and
consistent definitions that potential investors and lenders need to
make solid decisions. Options are an exercise in creativity, in the
place of quantifiable, sound accounting.
In addition to options, SEC lawsuit documents reveal that Dr. Sam
Waksal was carrying more than $80 million in debt at the time of the
FDA's Erbitux announcement. Could this have been another motive in
quickly dumping his stock, leaving the rest of the investors to hold
the bag?
Shady executive practices lead to damaging effects rippling through
the economy: Integrity is the elixir that will attract capital and lead
to lifesaving innovation, while deceit is the poison that is eroding
investor confidence.
This hearing today should open up all these processes and players
for exploration into whether the drug development and approval,
including its financing, is occurring as intended. Are the delicate
balances between patient safety, shareholder reward, and company
incentive all aligned, or is the scale tipped too heavily in favor one
way or another, in need of adjusting? Is the exchange between necessary
confidentiality and public disclosure at an optimum?
That is why on this Committee are here today, in our investigative
capacity and responsibility to American citizens.
We are here to find out: What are the facts? What happened? What is
supposed to happen? What did the high-level executives and their
cronies know and when? If something went wrong, how can it be corrected
to safeguard the balance I just described among patients, the firm, and
the shareholders? Let us fairly and open-mindedly listen to our
witnesses today, and thank you.
Mr. Greenwood. The Chair thanks the gentleman and
recognizes, for 3 minutes for an opening statement, the
gentleman from North Carolina, Mr. Burr.
Mr. Burr. Thank the Chair. And, clearly, the chairman has
not only tremendous interest in this, he has shown in the past
tremendous interest in the FDA process. The difficulty that we
deal with in this particular case is that many of us, years
ago, saw the potential pitfalls of the emergence of
biotechnology companies in this country, that without a clear
road map at the FDA as to how to evaluate that industry, we saw
the tendency of venture capital that funded these companies
that hadn't proved anything when they emerged other than that
they were creative and they thought they might be on the track
to a breakthrough, that with enough capital and enough time
that they might unlock that key to something magical and
eventually make it through an FDA process. We, in 1997, helped
to make that process a little more predictable and we thought a
little more transparent. We learn with everything hearing that
it is not quite as clear as what we intended to be, and we, as
Members of Congress, have tremendous work left.
But I think that it is extremely important for us to never
forget this is about patience, that though we talk about
publicly or privately held companies, in every case their quest
is to come up with a new compound that treats something that
today is untreatable. I am not sure the percentages today of
efforts of the pharmaceutical or biologic world that actually
come to fruition, but there are many more paths that they go
down that don't prove to be successful, that never make it into
the trial process where money is invested, in good faith, money
by that company, whether it is public or private, because they
believe that that might be the avenue to unlocking the key--the
key to unlocking the disease.
We are not here to judge the business decisions of any
companies. Ours is to make sure that there is a process, a
process that not only the companies but the investors can have
confidence in works. I am hopeful, Mr. Chairman, that the FDA
will be very honest to us today as to how the protocols could
have been flawed, how they could have been designed in a wrong
way. If the information was bad, then maybe we need to go back,
Jim, and look at whether we change what we did. We thought we
got it as close to right as we could.
The fact is that we are where we were 5 years ago. We are
sitting in a committee hearing, and we have got people pointing
fingers at each other, and the person that loses are the
patients with colorectal cancer. Diana DeGette laid it out
very, very well. Everybody is blaming somebody but there is one
real specific group that is left behind. As a Member of
Congress, I think it is extremely important that we listen very
closely to BMS, because they apparently saw something that was
worth a tremendous amount of money on the part of their
investors in this company but more important in Erbitux, and my
understanding is that their hopes have not changed. If their
hopes have not changed, then our hopes have not changed that
there may be a key that unlocks something here, but more
importantly that we must make sure that the system works in a
way that we nurture other biotechnology companies to continue
to search for those breakthroughs and not quit because of
another problem. I thank the Chair for his commitment, and I
yield back.
Mr. Greenwood. The Chair thanks the gentleman and
recognizes for 3 minutes for an opening statement the gentleman
from Ohio, Mr. Gillmor.
Mr. Gillmor. Thank you, Mr. Chairman. I have a very
profound and interesting opening statement, but in the interest
of time I will submit it for the record. Thank you.
[The prepared statement of Hon. Paul Gillmor follows:]
Prepared Statement of Hon. Paul E. Gillmor, a Representative in
Congress from the State of Ohio
Thank you, Mr. Chairman. Prescription drugs are increasingly
prevalent and influential on our health care system. With an ever-
increasing number of drugs pending approval by the Food and Drug
Administration, we cannot ignore the important, time-consuming process
that is involved in making a drug available to market.
In the case of Imclone Systems, alleged impropriety has taken place
in its application for approval of the cancer drug Erbitux. Although
the drug has proven successful in a variety of cases, questions over
its consistency and a hastily prepared application contributed to the
FDA's rejection of this drug. That is why we are holding this hearing
today.
In the case of ImClone, however, the FDA has been criticized for
its ruling. By applying a more rigorous standard to Erbitux
application, it has violated the spirit of ``Fast Track'' approval.
Furthermore, it has been alleged that ImClone CEO Samuel Waksal had
prior knowledge of the likely rejection of this drug from FDA
employees, who are represented today. As a result, significant insider
trading took place just days before the final FDA ruling, enriching
several Waksal family members and other well-known shareholders.
Although it is not in the purview of this Committee to investigate such
trading deals, it does fall under the jurisdiction of the SEC and the
Financial Services Committee, on which I do serve.
I will look forward to witness testimony today that will hopefully
shed light on the FDA approval process, as well as alleged impropriety
by Imclone that has left shareholders with substantial losses. Upon
hearing testimony, I am confident that this Committee will have a
better idea on how to address and reform the operations of the FDA for
the 21st century.
Mr. Greenwood. The Chair will check and if it is profound,
it will be included in the record.
And with that, the Chair calls forward the first panel of
witnesses, and they are Dr. Frank Papineau, who is a detailee--
Papineau, I am sorry, Papineau, Dr. Frank Papineau, who is a
detailee, working for the Committee on Energy and Commerce, and
accompanying him, Dr. Raymond Weiss, who is a consultant in
oncology, a clinical professor of Medicine at the Lombardi
Cancer Center of Georgetown University Medical Center here in
Washington.
Welcome, gentlemen. Thank you for your appearance. You are
both aware that this committee is holding an investigative
hearing and when doing so we have had the practice of taking
testimony under oath. Do either of you have objections to
giving your testimony under oath? Seeing no such objection, the
Chair advises you that under the rules of the House and the
rules of the committee, you are entitled to be advised by
counsel. Do you desire to be advised by counsel during your
testimony today? Okay. Then if you will stand and raise your
right hand, I will swear you in.
[Witnesses sworn.]
Okay. You are under oath, and Mr. Papineau, we will begin
with you. You are recognized for your testimony.
TESTIMONY OF FRANK PAPINEAU, DETAILEE, COMMITTEE ON ENERGY AND
COMMERCE; AND RAYMOND WEISS, CONSULTANT IN ONCOLOGY, CLINICAL
PROFESSOR OF MEDICINE, LOMBARDI CANCER CENTER
Mr. Papineau. Chairman Greenwood, ranking member and
members of the subcommittee, I am Frank Papineau, on detail to
the Energy and Commerce Committee's staff. I am here today to
provide background information and key facts and dates
surrounding the Food and Drug Administration's decision to end
its consideration of ImClone Systems' highly touted cancer
drug, Erbitux, and the questionable ImClone stock-selling
activity during that timeframe.
My remarks are an oral summary taken from the committee
staff report provided for today's hearing. I am accompanied
today by Dr. Raymond Weiss, consultant in Oncology and clinical
professor of Medicine at Georgetown University Medical Center.
Dr. Weiss is under contract with the committee to provide
assistance to the staff. Dr. Weiss wrote a report, and his
findings are appended to the committee staff report.
By way of background, ImClone Systems is a small biotech
company based in New York City, founded in 1984 by two
brothers, Sam and Harlan Waksal. ImClone has never turned a
profit in its 18 years of existence and reportedly has spent
over $200 million on research of Erbitux. Many people involved
in cancer research believe that Erbitux is a promising drug and
widely expected it to be on the market this year. Erbitux,
however, was not approved for the market because the Food and
Drug Administration found so many problems with Erbitux's
application for approval that it issued a refusal-to-file
letter, a rare FDA action that effectively turned the drug back
to the company for further study. This situation attracted
national attention because of the pre-market publicity about
the drug, because of ImClone's record-setting $2 billion
alliance with Bristol-Myers Squibb to market Erbitux and
because of the multi-million dollar stock trades by ImClone
insiders in the weeks before generated a negative decision.
Before we proceed to the business dealings, let me first
highlight two of the staff's findings regarding FDA's review of
Erbitux. One, FDA's initial decision in August 2000 to grant
Fast Track designation to Erbitux appears to have been based on
incorrect information regarding the study protocol submitted by
ImClone in support of the proposed cancer treatment which
involved Erbitux and another cancer drug, Irinotecan. Two, FDA
made the initial decision before it had full information about
Erbitux's activity when administered in the absence of the
other drug, and it was the other information, requested in a
letter by FDA in January 2001 and received from ImClone in
October 2001, that led the agency reviewers to conclude the
application was incomplete.
In early 2001, Bristol-Myers Squibb failed in its effort to
form an alliance with a biotech company called OSI that it
believed had a promising cancer drug. The company believed it
was losing its share of the oncology drug market and decided to
revisit ImClone and its cancer drug, Erbitux. On June 1, 2001,
after a month of negotiations, Sam Waksal outlined an
acquisition that would give Bristol Myers a 70 percent majority
stake in ImClone. Bristol's Board of Directors rejected the
deal. Dr. Waksal then told Bristol that he was willing to
consider alternative proposals provided they include a
significant equity investment in ImClone by Bristol, and he
also advised Bristol that he believed ImClone's existing
stockholders would benefit most if Bristol acquiring equity
interest through a tender offer to the ImClone's existing
stockholders.
During July 2001, after ImClone was virtually assured of an
equity deal and in anticipation of the tender offer from
Bristol, ImClone's board agreed to lend $35.2 million to the
Waksal brothers and the chairman of the board. The loans were
unsecured and at an interest rate of 7.75 percent. The loans
provided an opportunity for the three individuals to exercise
options and warrants they held to purchase a total of 4.5
million shares of ImClone stock. Sam Waksal and Harlan Waksal's
loans were $18.2 million and $15.7 million respectively. The
chairman's loan was in the amount of $1.2 million.
On October 29, 2001, thousands of ImClone's shareholders
participated in the Bristol tender offer to purchase ImClone
stock at $70 a share, a $20 premium over the trading price.
ImClone's Board of Directors tendered 2.1 million shares to
Bristol by themselves, representing 15 percent of the stock
tendered by ImClone shareholders. Sam and Harlan Waksal
tendered 814,674 and 776,450 shares for about $111 million
themselves. Simply stated, this means that the Waksal brothers
received more than 10 percent of the entire proceeds paid by
BMS during the tender offer. Although all ImClone shareholders
were allowed to tender shares to BMS, only the Waksals and two
other board members borrowed millions of dollars of company
funds to purchase the stock and then tender it to Bristol.
On December 28, 2001, the FDA issued a refusal-to-file
letter in response to the ImClone submission. The RTF letter is
sent in rare cases when a submission is deemed insufficient. It
is a non-public document containing trade secrets and
confidential commercial information. In a December 31, 2001
conference call with investors, ImClone executives said that
FDA sent the RTF letter because the Erbitux application was
missing certain ``train of documentation'' information needed
by regulators to accept the filing. ImClone said it would be
able to answer the FDA questions by the end of the first
quarter, leading hopefully to Erbitux being approved by the
fall of 2002.
On January 4, 2002, the Cancer Letter published excerpts of
the RTF letter indicating, contrary to ImClone statements to
investors, FDA had a long list of concerns that went far beyond
record keeping. The FDA believed ImClone' clinical trial was
not adequate and well controlled and that additional studies
would be needed. The letter suggested FDA had warned ImClone
starting in August 2000 that its data would have to demonstrate
that Irinotecan, the standard chemotherapy mentioned above, was
needed along with Erbitux. But the data submitted by ImClone
was not sufficient to distinguish the effects of the two
treatments.
Adding to the controversy over Erbitux has been the trading
of ImClone stock by ImClone insiders a few weeks before the FDA
letter, as well as trading of stock by Waksal family relatives
and friends during the 48 hours before the FDA letter was
issued. On December 21, 2001, ImClone issued a Company order
stopping employees from trading in ImClone stock until the FDA
decision on Erbitux was made public. The committee staff
believed until yesterday that no member of the board or officer
of the company traded stock between the 21st and 28th.
The staff found that, except for Sam and Harlan Waksal,
members of Sam Waksal's immediate family sold ImClone stock on
December 27, 2001 or the next day, hours before ImClone
announced publicly that FDA had refused to accept the filing of
Erbitux. We found that three officers of ImClone sold stock
prior to December 18, 2001 on the advice of their broker. In
addition, Harlan Waksal conducted a forward sale of 700,000
shares on December 6, 2001.
The staff learned that on October 31, 2001, Harlan notified
the ImClone board members that he planned to execute a $700,000
sales transaction. He told the board that the stock would still
be under his voting control for the next 3 years. He also
stated he would finalize the transaction over the next 2 weeks.
He told the committee staff in early 2001 he attempted to shop
the sale. He told the staff he was forced to sell the ImClone
stock to come up with enough cash to pay substantial taxes
racked up from his prior exercise of stock options and the
tendering of shares to Bristol. He also stated that because he
didn't want to sell shares he entered into a forward sales
contract that gives him a percentage of the cash value of the
shares up front but still allows him to control the shares and
defer tax payments for another 2 years. In short, Waksal
received less than the stock was worth at the time of the sale,
but he also limited the downside risk when ImClone's stock
price continued to drop. It should be noted that Harlan Waksal
sold the 700,000 shares on the same day that ImClone hit its
52-week high.
Mr. Chairman, that concludes my prepared statement. I'll be
happy to answer any questions.
[The prepared statement of Frank Papineau follows:]
Prepared Statement of Frank Papineau, Committee Staff, Committee on
Energy and Commerce
Chairman Greenwood, Ranking Member Deutsch, and Members of the
Subcommittee, I am Frank Papineau, on detail to the Energy & Commerce
Committee's staff. I am here today to provide you with background
information and key facts and dates surrounding the Food and Drug
Administration's decision to end its consideration of ImClone Systems'
highly touted cancer drug, Erbitux, and the questionable ImClone stock-
selling activity during this turn of events.
My remarks are an oral summary taken from the Committee staff
report prepared for today's hearing. I am accompanied today by Dr.
Raymond Weiss, Consultant in Oncology and Clinical Professor of
Medicine at Georgetown University Medical Center. Dr. Weiss is under
contract with the Committee to provide assistance to the staff. Dr.
Weiss wrote a report of his findings, which is appended to the
Committee staff report.
background
By way of background, ImClone Systems is a small biotech company
based in New York City, founded in 1984 by two brothers--Sam and Harlan
Waksal. ImClone has never turned a profit in its 18 years of existence
and reportedly has spent over $200 million on research of Erbitux. Many
people involved in cancer research believe that Erbitux is a promising
drug and widely expected it to be on the market this year. Erbitux,
however, was not approved for the market because the Food and Drug
Administration found so many problems with ImClone's application for
approval that it issued a Refusal To File letter, a rare FDA action
that effectively turned the drug back to the company for further study.
This situation attracted national attention because of the pre-market
publicity about the drug, because of ImClone's record-setting $2
billion alliance with Bristol-Myers Squibb to market Erbitux, and
because of multi-million dollar stock trades by ImClone insiders in the
weeks before FDA's negative decision.
Over the past six months, Committee staff has conducted an
extensive investigation into matters surrounding ImClone's cancer drug
and related business dealings. The Committee's investigation focused on
the FDA drug approval process, Erbitux's clinical trials, Bristol-
Meyer's partnership arrangement to acquire commercial rights to
Erbitux, and the key events leading up to FDA's Refusal to File letter
and trading of ImClone stock by its board members and officers, as well
as, several of Sam Waksal's immediate family and friends.
Before we proceed to the business dealings, let me first highlight
two of staff's findings regarding FDA's review of Erbitux: One, FDA's
initial decision in August 2000 to grant fast-track designation to
Erbitux appears to have been based on incorrect information regarding
the study protocol submitted by ImClone in support of the proposed
cancer treatment, which involved Erbitux and another cancer drug,
Irinotecan. Two, the FDA made this initial decision before it had full
information about Erbitux's activity when administered in the absence
of this other drug; and it was this other information--requested in a
letter by FDA in January 2001 and received from ImClone in October
2001--that led agency reviewers to conclude the application was
inadequate.
the bristol-meyers squibb deal and imclone's internal loan
In early 2001, Bristol-Meyers Squibb (BMS) failed in its effort to
form an alliance with a biotech company, OSI, that it believed had a
promising cancer drug. The company believed it was losing its share of
the oncology drug market and decided to re-visit ImClone and its cancer
drug Erbitux. On June 1, 2001, after a month of negotiations, Sam
Waksal outlined an acquisition plan that would give BMS a 70% majority
stake in ImClone. BMS's Board of Directors rejected the deal. Mr.
Waksal then told BMS that he was willing to consider alternative
proposals provided they include a significant equity investment in
ImClone by BMS and he also advised BMS that he believed ImClone's
existing stockholders would benefit most if BMS acquired an equity
interest through a tender offer to the ImClone's existing stockholders.
During July 2001, after ImClone was virtually assured of the equity
deal and in anticipation of the tender offer from BMS ImClone's Board
agreed to lend $35.2 million to the Waksal brothers and the Chairman of
the Board. The loans provided the opportunity for the three individuals
to exercise stock options and warrants they held to purchase a total of
approximately 4.5 million shares of ImClone stock. (Sam Waksal and
Harlan Waksal's loans were $18.2 and $15.7 respectively. The Chairman's
loan was in the amount of $1.2 million.)
On October 29, 2001, thousands of ImClone's shareholders
participated in the BMS tender offer to purchase ImClone stock at $70 a
share, a $20 premium over the trading price. ImClone's Board of
Directors tendered 2.1 million shares to BMS by themselves--
representing approximately 15% of the stock tendered by ImClone
shareholders to BMS. Sam and Harlan Waksal tendered 814,674 and 776,450
shares for about $111 million. Simply stated this means that the Waksal
brothers received more than 10% of the entire proceeds paid by BMS
during the tender offer. Although all ImClone shareholders were allowed
to tender shares to BMS, only the Waksals and two other board members
borrowed millions of dollars of company funds to purchase the stock and
then tender it to BMS.
the rtf letter
On December 28, 2001, the FDA issued its ``refuse-to-file'' (RTF)
letter in response to the ImClone submission. The RTF letter is sent in
rare cases when a submission is deemed insufficient. (It is a non-
public document containing trade secret or confidential commercial
information.) In a December 31, 2001 conference call with investors,
ImClone executives said that FDA sent the RTF letter because the
Erbitux application was missing certain ``train of documentation''
information needed by regulators to accept the filing. ImClone said it
would be able to answer the FDA questions by the end of the first
quarter, leading, hopefully to an approval of Erbitux in the fall.
On January 4, 2002, the Cancer Letter published excerpts of the RTF
letter indicating that--contrary to ImClone statements to investors--
the FDA had a long list of concerns that went far beyond record
keeping. The FDA believed ImClone's clinical trial was not adequate and
well controlled and that additional studies would be needed. The letter
suggested that the FDA had warned ImClone starting in August 2000 that
its data would have to demonstrate that Irinotecan, the standard
chemotherapy mentioned above, was needed along with Erbitux. But the
data submitted by ImClone was not sufficient to distinguish the effects
of the two treatments.
trading activity by imclone executives and others
Adding to the controversy over Erbitux has been the trading of
ImClone stock by ImClone insiders a few weeks before the FDA letter, as
well as the trading of stock by Waksal family relatives and friends
during the 48 hours before the FDA letter was issued.
On December 21, 2001, ImClone issued a Company order stopping its
employees from trading in ImClone stock until after the FDA decision on
Erbitux was made public. Committee staff believes that no board member
or officer of ImClone traded ImClone stock between December 21 and 28,
2001. However, staff found that, except for Sam and Harlan Waksal,
members of Sam Waksal's immediate family sold ImClone stock on December
27, 2001 or the next day hours before ImClone announced publicly that
FDA had refused to accept the filing of Erbitux.
We found that three officers of ImClone sold stock prior to
December 18, 2001 on the advice of their broker. In addition, Harlan
Waksal conducted a forward sale of 700,000 shares on December 6, 2001.
The staff learned that on October 31, 2001, Harlan Waksal notified
the ImClone Board Members that he planned to execute a 700,000 share
stock transaction. He told the board that the stock would still be
under his voting control for the next three years. He also stated that
he'd finalize transaction over the next two weeks. He told Committee
staff that in early November 2001 he attempted to shop the sale. He
told staff he was forced to sell the ImClone stock to come up with
enough cash to pay substantial taxes racked up from his prior exercise
of stock options and his tendering of shares to BMS. He also stated
that because he didn't want to sell shares he entered into a forward
sales contract that gives him a percentage of the cash value of the
shares up front but still allows him to control the shares and defer
tax payments for another two years. In short, Waksal received less than
what the stock was worth at the time of the sale, but he also limited
the downside risk when ImClone's stock price continued to drop. It
should be noted that Harlan Waksal sold the 700,000 shares on the same
day that ImClone hit its 52-week high.
This ends my prepared testimony, and I will be pleased to answer
your questions.
Mr. Greenwood. Thank you, Mr. Papineau. The Chair
recognizes himself for 5 minutes for questions, and let me
address my questions to you, Dr. Weiss. You are a clinical
professor of Medicine, is that right?
Mr. Weiss. Yes, sir. I am independent consultant in
oncology.
Mr. Greenwood. Just pull that right up close to you, sir.
Pull the microphone forward about 5, 6 inches.
Mr. Weiss. Does this work now? Yes.
Mr. Greenwood. Yes.
Mr. Weiss. Okay. I am a 100 percent self-employed
independent consultant in oncology. I have a number of
contracts with agencies of the Federal Government to do various
tasks, and I am also a clinical professor of Medicine at
Georgetown. That is an unpaid teaching faculty position.
Mr. Greenwood. Do you treat patients now?
Mr. Weiss. Yes, I do. I have an arrangement with an
oncologist in solo practice who has offices on either side of
the Maryland and Pennsylvania border in Gettysburg and
Westminster, and I go to that office about 7 days a month to
give him some time off and see patients, to maintain my
clinical skills. I also have a contract with the Walter Reed
Army Medical Center to go there 1 day a week to see patients in
the breast disease clinic. So, yes, I do see patients, and I
see patients with colon cancer too.
Mr. Greenwood. And for how many years have you audited
scientific research?
Mr. Weiss. Yes. Since 1981, the National Cancer Institute
has required onsite quality assurance auditing of the clinical
trials that they fund at institutions around this country.
There are 11 such cooperative groups, collaborating
institutions, and I work for one of them, the Cancer and
Leukemia Group B, which has its major grant handled by the
University of Chicago, so I am a contractor to the University
of Chicago for that grant. And I make site visits, as I did
just the past 3 days, to institutions around the country,
auditing the records, the medical records of patients that are
in clinical trials.
Mr. Greenwood. Okay. And you reviewed the clinical trial
data from Erbitux's 9923 study.
Mr. Weiss. Yes, I did.
Mr. Greenwood. Okay. In your report, you described as
incredible the fact that 37 patients, almost 27 percent, of the
139 patients who were entered in that study were ineligible.
Why is that percentage--why do you consider that percentage to
be, quote, ``incredible?''
Mr. Weiss. Because eligibility criteria for the clinical
trial are most important. They determine the patient population
you are going to study. They have to have the right cancer,
they have to have the right stage, they have to have certain
degree of normal liver function, normal kidney function, blood
counts. All those sorts of things are criteria for being
eligible to go on the study.
Mr. Greenwood. So in this study, there were only 139
patients that were entered, and 27 percent of them didn't meet
the criteria for the study as it was designed.
Mr. Weiss. That is correct. That was determined by----
Mr. Greenwood. Is that an atypical rate?
Mr. Weiss. Yes, it is.
Mr. Greenwood. What it is a typical rate?
Mr. Weiss. To give you an example, just on Monday, one of
the visits that I did, one of the 13 patients we audited was
ineligible for the trial. It was due to the mistake of the
nurse data manager overlooking the fact the patient was still
on a drug that made him ineligible. That is just pure human
error. It happens 5, 6, 8 percent of the time. It doesn't
happen 27 percent of the time.
Mr. Greenwood. Okay. And so what does you extrapolate from
that with regard to the quality of the ImClone study?
Mr. Weiss. There are a lot of patients who were entered on
the trial that did not meet the eligibility criteria as set up
in the protocol, and therefore that automatically makes the
results somewhat subject to question.
Mr. Greenwood. You also described as incredible the fact
that 15 patients were exemptions to be enrolled in the study.
What does that mean and why is that incredible?
Mr. Weiss. Once you set up these eligibility criteria, you
do not deviate from them, except that you might make an error,
as I just described. You don't give exemptions from these
eligibility criteria, because if you do, then you have changed
the patient population that you are studying. You have allowed
on patients who weren't eligible for the study.
Mr. Greenwood. So is it highly unusual for exemptions to be
given in such a study?
Mr. Weiss. Most certainly. In the Cancer and Leukemia Group
B, with the 300 participating institutions, the only time an
exemption can be given is by the group Chair at the University
of Chicago. That means a phone call to the highest level, and
that is rarely done, No. 1, make a phone call, No. 2, even more
rare is to give the exemption.
Mr. Greenwood. Okay. I see in your report that you
identified another set of major deviations in the study which
involve the dose and the administration frequency of
Irinotecan. Pronounce that for me.
Mr. Weiss. Irinotecan.
Mr. Greenwood. Irinotecan, the toxic chem. drug used in
combination with Erbitux. How would the dosing and the
frequency of dosing affect the results of the study?
Mr. Weiss. The protocol set up a standard for giving that
particular drug and said that the dose and the frequency had to
be the same as the patient received when they progressed; that
is, their cancer got worse when they were on that drug
previously. When they were treated on the protocol, I believe
there were 17 patients did not get the same dose and same
schedule of frequency of treatment as they were prior to
entering. That is a major deviation.
Mr. Greenwood. How would you determine whether the patients
were actually improving because of these drugs?
Mr. Weiss. You couldn't separate the effect of increasing
the dose of the one drug from the effect of the combination of
the two drugs, either the Erbitux and/or the Irinotecan. When
you are giving more of one drug than you had before, you are
changing the results, and, again, you make the results of the
study subject to question.
Mr. Greenwood. The Chair's time has expired. The Chair
recognizes the gentleman, Mr. Stupak, for inquiry for 5
minutes.
Mr. Stupak. Thank you, Mr. Chairman.
Dr. Weiss, the patient eligibility, that was decided by
who, the patient eligibility for these studies?
Mr. Weiss. They are set up in the protocol, and I assume
the investigators entering the patient decided the patient met
the eligibility criteria or not. But in the case of those 15
patients, they would have had to call somebody, perhaps at
ImClone, I don't know, to say it is okay to handle that patient
even though they are not eligible.
Mr. Stupak. This study is known as 9923, correct?
Mr. Weiss. Yes, sir.
Mr. Stupak. And the study was actually done in 1999, I
believe.
Mr. Weiss. It was started in the end of 1999 and ended in
early 2001.
Mr. Stupak. And then after that August of 2000, ImClone and
FDA met to see if they could get an accelerated approval of
this drug, correct?
Mr. Weiss. Yes, sir.
Mr. Stupak. Okay. After that meeting, there was a change in
the protocol, was there not?
Mr. Weiss. Actually, the change in the protocol anti-dated
that meeting by about 10 months. It was October 1999. And it is
apparent, to me anyway, that the FDA staff did not know about
the change in the protocol because their understanding was
Version 1.0 of the study.
Mr. Stupak. Correct. They thought it was Version 1.0, and
in fact when the approval was given on Fast Track, which was,
if I remember correctly, January 12, 2001, they were given the
Fast Track authority to do protocol No. 1, correct?
Mr. Weiss. Yes, sir. That is what it appears.
Mr. Stupak. In fact, even 7 days there later, FDA, on
January 19, actually sent them a letter and talked about the
first protocol, and that would be used in this Fast Track
study.
Mr. Weiss. That is correct, sir.
Mr. Stupak. Okay. If you go then to--let me back up just a
little bit. While they were doing this study and everything,
there has been a lot of discussion here about the July 30, 2001
Business Week article, and in the Business Week article, which
was touting Erbitux, it stated that this drug was the furthest
along of a handful of new cancer treatments that precisely
honed in on a growth signal found in up to 50 percent of all
cancers. In clinical trials, ``the drug demonstrated remarkable
success in causing colon cancer to regress in patients who had
failed to respond to other treatments.'' Did you find in your
review any medical evidence that the drug demonstrated
remarkable success in causing colon cancer regression?
Mr. Weiss. No, sir. The patients who got a response, that
is their cancer shrunk, the measurable lesions that were seen
on a chest x-ray or a CT scan, the percentage that got that
sort of response was in the 15 to 20 percent range. When you
look at all of the people who have reviewed these CT scans and
decided that they agreed, they agreed only on 20 patients and
unfortunately there were all these disagreements, whether the
patients truly were resistant to Irinotecan, No. 1----
Mr. Stupak. Sure.
Mr. Weiss. [continuing] and, No. 2, whether they truly got
a response to the protocol therapy.
Mr. Stupak. Well, in your investigation, or Mr. Papineau,
did either one of you find who was responsible for putting out
the statement saying that you had remarkable success when at
best the success was only 20 percent?
Mr. Weiss. It was Mr. Waksal is the one who did most of the
touting of this drug.
Mr. Stupak. Sure. Which Mr. Waksal was that?
Mr. Weiss. Mr. Sam Waksal.
Mr. Stupak. Okay. Well, did you find in your investigation
any evidence that, and I am going to quote again in a
conversation that Mr. Waksal on the phone referenced as single
agent data, ``Apparently it came out at 13 percent, which he
feels is half the C22-25, plus CUT 11 data. They have informed
the FDA who were pleased and confirmed that they would be on
for the February 28 FDA's Oncologic Drugs Advisory Committee,''
I take it the Advisory Committee for approval. Did you find
anything, Mr. Papineau or Dr. Weiss, in which the FDA was, use
the word, ``pleased'' and that there would be the expected
February 28 that they would be on the Advisory Committee? Did
you find anything like that?
Mr. Papineau. We did not, sir. The FDA reviewers that we
talked to were very clear that no statement like that was ever
made to Sam Waksal.
Mr. Stupak. Okay. Was it made to anyone else? If not Sam
Waksal, was it made to anyone else that FDA was pleased with
this single agent data?
Mr. Papineau. Not that I am aware of, sir. There was talk
about the single agent data and FDA wanted to see it. And
ImClone told them that they had the data and they would present
it to them at a later date. When it came time to present the
data----
Mr. Stupak. And, actually, that data wasn't submitted until
late December, just before it was rejected.
Mr. Papineau. It was finally given to them in total on
December 4.
Mr. Stupak. December 4. So whether it was the L.A. Times,
business news, even statements about the remarkable success of
this drug or FDA's apparently position with this drug,
excitement about this drug, those are just--there is no basis
of fact that you could find anywhere in your investigation to
support those statements?
Mr. Papineau. Not totally. What we did find from talking to
the FDA officials is that they were listening to it and they
couldn't talk because of the secrecy--the trade secrets and
stuff of drug applications----
Mr. Stupak. So during that time, even though they saw these
statements publicly, they could not--FDA could not stand out
publicly and say, ``This is not true.''
Mr. Papineau. Exactly.
Mr. Stupak. Because of the trade secrets and the ongoing
study, correct?
Mr. Papineau. That is exactly true. You will hear later
from FDA witnesses. They will tell you that they watched ``60
Minutes'' and they read Business Week, and as they sat there
and watched ``60 Minutes'' on Sunday night, they had a lot of
problems in the hype and what was being said, but there was
nothing they could do about it.
Mr. Greenwood. Time of the gentleman has expired. The Chair
recognizes the gentleman of the full committee, Mr. Tauzin, for
5 minutes for inquiry.
Chairman Tauzin. Thank you, Mr. Chairman. Let me see if I
can get all this in sort of layman's understanding. Our
understanding from our investigation, gentlemen, is that this
whole matter revolves around a mistake made in the early
protocol that was based upon the notion that the way to test
this drug, Erbitux, was to test it in combination with another
toxic chemotherapy; is that correct?
Mr. Weiss. That is correct.
Chairman Tauzin. And that mistake was based upon
information that Erbitux alone didn't show enough effect,
didn't show a reasonable amount of good results, that it had to
be used in combination and tested in combination with other
toxic chemotherapy; is that correct?
Mr. Weiss. Yes, sir. All drugs that go to clinical trials,
whether they are cancer drugs or anything else, go through
testing in animals. And when they tested this new drug,
Erbitux, in animals, they found that they got the best results
if they used Irinotecan and Erbitux together in the animal
cancers.
Chairman Tauzin. Yes. But, apparently, when the FDA medical
reviewer handling this matter looked at it, the original
decision was that the protocol shouldn't be approved. And then
in August 11, the senior FDA medical official, in effect,
overruled the primary review and said, ``Yes, go forward with
it,'' based upon this combination used; is that right?
Mr. Weiss. That is what it appears to be; yes, sir.
Chairman Tauzin. And later on a single agent study
indicated in fact Erbitux did have enough activity to indicate
that it should have been studied by itself without studying it
in combination with the toxic chem. you mentioned; is that
correct.
Mr. Weiss. Yes, sir. A single agent study was subsequently
done. Fifty-seven patients were entered and although six
patients were said to have responded, the Bristol reviewers
said they clearly agreed that five did respond. So that is
about an 8 to 9 percent rate of regression of the cancer--
number of patients who got benefit.
Chairman Tauzin. Now, the 9923 study, which was the study
that was used to approve the original protocol, apparently it
had lots of problems. When BMS, Bristol-Myers Squibb, did the
independent radiological review, they indicated that the
response rate was only 12.5 percent compared to the claimed
22.5 percent. They found that the number of patients valuable
under the system was 89 instead of the original 120. And if
that data was correct, that would drop it below the 15 percent
clinical end point set by ImClone, and the study would
therefore be too small to support the accelerated approval
process. So BMS, in its radiological review, ends up saying,
``Hey, this process, 9923, this protocol that the FDA has
approved, over the objections of the initial reviewer, is
flawed;'' is that right?
Mr. Weiss. Yes, sir.
Chairman Tauzin. But they went ahead and invested anyhow
and went ahead with that deal. Now, in the end, the end result
of all this was at some point, December something, FDA finally
says, ``This is not working. This review process is not doing
its job, it is flawed, and so we are going to recommend a so-
called refusal-to-file letter.'' Tell us what that is.
Mr. Weiss. That is basically a rejection----
Chairman Tauzin. It is a rejection notice.
Mr. Weiss. It just says, ``We are not going to review your
study because there are too many problems with it.''
Chairman Tauzin. Now, you have been asked to independently
review all this stuff, right?
Mr. Weiss. Yes, sir.
Chairman Tauzin. The first question I want to ask you, if
this drug is as important as it was hyped to be, was this a
case--if ever there was a case that should have been handled
absolutely carefully and correctly from Day One, wasn't this
one?
Mr. Weiss. Yes, sir. Any time you have a study that is
going to the FDA to get approval for marketing so that
thousands of patients into the indefinite future get the drug,
you want to be sure your scientific results and your study are
iron clad.
Chairman Tauzin. Yes, but more importantly, here is a drug
that is being hyped as a blockbuster chemical treatment drug.
Here is a drug that is being told it is going to revolutionize
cancer treatment. Here is a drug that by all accounts is life
or death for hundreds of patients who call in daily saying,
``Get it to me.''
Mr. Weiss. That is correct.
Chairman Tauzin. Isn't this the kind of drug that should
have been handled in the most careful, most precise, knowing
ways so that FDA was assured from Day One that the protocols
were correct, that everybody working with FDA, including
Bristol Myers Squibb, everybody, should have been very careful
that every T was crossed, every I was dotted, everything was
done precisely right because of the importance of the potential
of this drug to cancer therapy?
Mr. Weiss. Most assuredly.
Chairman Tauzin. Now, you have looked at this process. Was
there any doubt in your mind that it was flawed when you looked
at it?
Mr. Weiss. The protocol had flaws in it.
Chairman Tauzin. You could see it, couldn't you?
Mr. Weiss. Yes, sir.
Chairman Tauzin. Why couldn't FDA? Why couldn't ImClone?
Why couldn't Bristol-Myers see it? Why couldn't somebody see it
early enough to say, ``Stop. Let us stop it right now and start
it up again correctly and do it right so that we don't delay
this process the way it has now been delayed.''
Mr. Weiss. I don't believe I can answer that question, sir.
Chairman Tauzin. That is the question I think we have got
to answer, Mr. Chairman. Thank you.
Mr. Greenwood. The Chair thanks the chairman and
recognizes, for 5 minutes for inquiry, the gentlelady from
Colorado, Ms. DeGette.
Ms. DeGette. Thank you, Mr. Chairman, and following up on
Chairman Tauzin's question, the way the Fast Track process is
supposed to work is if you have a promising drug, but you want
to move it more quickly because it is addressing some need that
has not being addressed by existing drugs or it is being used
on patients with no hope, Congress and the research community
sort of said, ``Well, we are not going to have the full-blown
research Phase III studies that we might have with other
drugs;'' correct, Dr. Weiss?
Mr. Weiss. Yes, sir--yes, ma'am.
Ms. DeGette. I am used to it.
And so there is some sense with Fast Track approval that
maybe you won't have the full-blown, years long research
process, and that is accepted by everyone at the FDA, in the
research community and by Congress.
Mr. Weiss. Yes.
Ms. DeGette. Okay. But nonetheless, the studies are
supposed to have--are designed to have protocols which are
acceptable scientifically, correct? I mean we don't abandoned
scientific protocol simply because we want to get these drugs
on the market, right?
Mr. Weiss. You not only have to have a scientifically valid
protocol, but you have to have scientific valid patients and
analysis of those patients that were entered on the study.
Ms. DeGette. And the problem with this--one of the problems
with this study was that it was--it had a very small sample
size to begin with. Am I correct in saying that?
Mr. Weiss. Relatively speaking, in clinical trials in
cancer, yes.
Ms. DeGette. And it probably would have been all right as a
stage two study, correct, Dr. Weiss, do you think?
Mr. Weiss. I am sorry?
Ms. DeGette. As a pivotal study, both of these protocols
were undoubtedly flawed. We are getting all hung here about
which protocol did the FDA know about, but as a study on which
you would face Fast Track approval of a drug, both of these
protocols probably had flaws, wouldn't you say?
Mr. Weiss. Yes. The major flaw was not requiring a specific
dose and schedule of the Irinotecan. It was left up to the
judgment of the physician, to some degree, by saying, ``Give
them the same dose and schedule that they had before.''
Ms. DeGette. So if you were doing an FDA approval process,
that study which didn't give any sense of the dose of the
Irinotecan might have been all right as a preliminary study,
but you would want to refine that study before you approved
Erbitux for use in cancer patients, correct?
Mr. Weiss. Yes, and you would not ineligible patients on it
either.
Ms. DeGette. Especially when you already had such a small
sample size.
Mr. Weiss. Yes, most definitely.
Ms. DeGette. Okay. Now, was there any--do we have any idea
why there was such a high percentage of ineligible patients in
the protocol?
Mr. Weiss. I have no idea.
Ms. DeGette. So any answers would be speculative unless the
researchers themselves could tell us, correct?
Mr. Weiss. They are speculative as far as I am concerned, I
don't know.
Ms. DeGette. Okay. And I am a little curious about this
discussion in August 2000 with the FDA and with ImClone where
apparently the FDA was relying on an old protocol and ImClone
had adopted a new protocol. Whose responsibility would it be to
know that new protocol at that meeting? Would the be the FDA's
responsibility or ImClone's responsibility?
Mr. Weiss. I would assume it is ImClone's responsibility to
present it to the FDA and say, ``Look, we have changed the
study.''
Ms. DeGette. Now, do we have--had ImClone, in fact, given
that updated protocol to the FDA prior to the August 2000
meeting?
Mr. Weiss. I saw no evidence that they had.
Ms. DeGette. So you have no evidence that the FDA had that
study in hand, whether or not they referred to it at the
meeting or not.
Mr. Weiss. I do not.
Ms. DeGette. Okay. I just have a couple more quick
questions. I have in my hand the report that you presented to
this committee, Doctor. I assume you personally have overseen a
number of protocols, given your background.
Mr. Weiss. Yes. I have personally participated in a number
of clinical trials----
Ms. DeGette. Okay. Now----
Mr. Weiss. [continuing] written the protocols.
Ms. DeGette. On page 7 of your study, I don't know if you
have it in front of you.
Mr. Weiss. Yes, I do.
Ms. DeGette. Okay. At the bottom, the very last paragraph,
it says, ``Flaws in the design of the 9923 protocol were also
expressed publicly by three prominent medical oncologists after
the publication of the RTF,'' which is the refusal-to-file
letter. That was in January 2002 after everything fell apart,
correct?
Mr. Weiss. Yes.
Ms. DeGette. I am wondering if you can tell me very
briefly, because my time is up, what flaws those three
prominent oncologists found in the protocols.
Mr. Weiss. The eligibility criteria regarding the patient
being clearly resistant to the Irinotecan was one. The way that
the specifications for giving the Irinotecan on this study,
which I said were non-existent, those were the two major flaws.
Ms. DeGette. And are those flaws that should have been
caught in the FDA Fast Track approval process?
Mr. Weiss. Yes, I believe they should have been.
Ms. DeGette. Thank you, Doctor. No further questions.
Mr. Greenwood. The time of the gentlelady has expired. The
Chair recognizes the gentleman from Kentucky, Dr. Fletcher, for
5 minutes, for purposes of inquiry.
Mr. Fletcher. Thank you, Mr. Chairman. Again, I want to
thank you for conducting this hearing, and even though I had to
step out briefly, I tried to listen to much of the testimony
here.
Dr. Weiss, let me just ask you, in general terms, and I
hope this hasn't been asked, but in spite of--if you look at
the problems with the study, particularly eligibility, those
that were entered into the study with lack of eligibility, some
of the other things you pointed out, does this drug, Erbitux,
represent possibly a major breakthrough in cancer therapy, in
your opinion?
Mr. Weiss. I would not describe it as a major breakthrough.
I would describe it as an interesting drug with some activity
apparent in colon cancer that makes it worthwhile to study
further. We have many such drugs in the field of oncology.
Mr. Fletcher. I certainly understand that and appreciate
it. Let me----
Mr. Weiss. In other words, drugs that are interesting but
not blockbusters.
Mr. Fletcher. Thank you on that. And, obviously, we have
heard much of the emphasis on the company management seemed to
be on the financial dealings rather than making sure that the
research was conducted adequately, and that does, at least--
that appears from the testimony thus far and what we have heard
occurred there.
Let me ask you this. It is very common for oncology agents
to be used together because of the synergy. Sometimes they do
not work alone, but they may work in combination with another
medication. Help me understand why part of the refusal included
making sure the drug was studied alone in efficacy alone.
Doesn't the FDA sometimes permit to drug to use and say it is
approved for use with another specific drug for a particular
disease?
Mr. Weiss. Yes. This registration study involved the two
drugs, and you want to be sure that one drug is really
producing some additional benefit over the other drug when they
are used together. And so you had no information that the new
drug, Erbitux, all by itself provided any benefit. So when they
are used together, you want to be sure that the new drug also
has activity by itself along with the old drug, which you know
has some activity. So if you see a response greater with the
two, you know it is because, yes, the one drug works a little
bit but the two work together better and higher percentage of
patients benefit.
Mr. Fletcher. Do the flaws in the study prohibit you even
if statistically you rule out some of the problems due to the
eligibility that the drug that Erbitux accompanied or was used
with efficacy was not enhanced with Erbitux?
Mr. Weiss. It appeared to me that there was, for some
patients, some benefit of Erbitux, both in the single agent
study and in the combination study. The problem is with the
combination study a large percentage of the patients were
ineligible, many of them got doses higher of Irinotecan than
they should have been, and there is a great deal of controversy
over which patients responded and which didn't. So there are
all sorts of flaws, and I don't think FDA could agree that it
is a study that clearly makes a case for Erbitux as a drug that
should be allowed on the market where anybody can prescribe it.
Mr. Fletcher. Let me ask you then another question.
Apparently, not only were there problems in following the
protocol of the design of the study, but there were problems
that you understand, and you may have already said this,
problems in the design of the study itself then.
Mr. Weiss. Yes. The eligibility criteria for determining
whether the patient was truly resistant to Irinotecan before
they were entered, that was a problem. And then the looseness--
and I use that term as my own--the looseness of the directions
on what dose of Irinotecan would be prescribed. It was stated
that you give the same dose as they received before they went
on study with no dose increase, but, obviously, the physicians
involved went ahead and did that anyway. And that makes the
results very suspect. Did the patient respond because they got
the two drugs together or did they respond because they got
more of the Irinotecan now than they did before.
Mr. Fletcher. And I can certainly understand how that makes
the results somewhat uninterpretable. Let me ask you, in this
company you have substantial expertise on the board at ImClone,
you have obviously substantial expertise in the FDA. How does
this study, first off, get structured with these flaws, how
does it get implemented with these flaws in conjunction with
the FDA, and this allowed to go on? Could you help us with some
insight on that?
Mr. Weiss. I can't answer that question, sir. One of the
board of directors is somebody I used to work under at the
National Cancer Institute, Dr. DeVita, whom I highly respect,
and I don't know whether he actually saw the protocol or not.
Mr. Fletcher. I find it, and the reason I do, certainly,
many families, and I know our family's been affected personally
with metastatic colon cancer, and I remember when the studies
came out with 5-fu and Lamisil, we were very optimistic and it
was apparently helpful, and we looked forward to this
medication or others like this in not only metastatic colon
cancer advance but other diseases. And if there is ever a time
that you need to make sure for the timeliness of the
availability of this drug that a study is done well, a study is
conducted properly, that there is proper FDA oversight, that
our Fast Track procedures were followed that were established
by Congress, I mean this is the time you want it, because there
is nothing more disheartening to raise the expectations of
thousands of cancer patients that there is a new medication on
the horizon and then to find out that it may still be, I mean
it may still be a very good, effective medication, but the
delay due to the flaws, and it looks like problems on both the
companies and particularly with the FDA as well in overseeing
the study, and maybe summon the process where a company can
release and talk about how good this drug is and where the FDA,
even if they have concerns, are prohibited, rightfully so, from
talking about that. I would just like your discussion on what
do you see can be done to prevent this in the future that we
are not doing?
Mr. Weiss. I agree with you entirely that it was extremely
unfortunate that the hopes of many patients with cancer were
raised and somewhat dashed now by the fact that the study
wasn't interpretable sufficiently to approve the drug for
marketing. I honestly don't have an answer to the second part
of your question, what can we do to change things. One of them
is perhaps allow the FDA a little more latitude to make some of
their analyses public. I think that is for Congress to decide,
though.
Mr. Fletcher. I see my time has expired, and thank you, Mr.
Chairman.
Mr. Greenwood. The Chair thanks the gentleman. The Chair
wishes to make one correction with regard to the testimony
given by Mr. Papineau. I believe you testified that the sale on
December 6 by Harlan Waksal of stock occurred on the day of the
highest value of the stock. I believe the record should be
corrected that it was near--the highest day was December 5 and
he sold on the 6th. I wish the record to be corrected. The
Chair recognizes the gentleman from Florida, Mr. Stearns, for 5
minutes.
Mr. Stearns. Thank you, Mr. Chairman. Dr. Weiss, did you
see the ``60 Minutes'' CBS program on Erbitux?
Mr. Weiss. No, I did not.
Mr. Stearns. Mr. Papineau, you did, and you----
Mr. Papineau. No, I did not.
Mr. Stearns. You did not. I think you indicated--staff told
me that you thought that the executives Erbitux saw the ``60
Minutes;'' is that true?
Mr. Papineau. I indicated that the FDA reviewers that were
reviewing the drug watched ``60 Minutes,'' and they----
Mr. Stearns. Okay.
Mr. Papineau. [continuing] had serious questions.
Mr. Stearns. Okay. So the FDA people who reviewed the ``60
Minutes'' had serious questions?
Mr. Papineau. Yes, sir.
Mr. Stearns. Did the executives of ImClone, do you know if
they saw the ``60 Minutes?'' Obviously, they did, but I mean it
seems to me that if there were exaggerations in that ``60
Minutes,'' somebody should have corrected the story.
Mr. Weiss. I would think so.
Mr. Stearns. Now, that is not the FDA's responsibility.
Mr. Papineau. No, it isn't. FDA is not allowed to do that.
Mr. Stearns. Right. Dr. Weiss, who do you think should have
the responsibility if there is a bad story from CBS, they have
hyped this, in fact it appears on the July 30, 2001 issue of
Business Week international cover story they were talking about
what a great new cancer treatment drug this was. And it seems
like the point I am getting at is all this hype in the media
about this. Where did they get this hype from?
Mr. Weiss. It seems to be from the two executives that ran
the company, the Waksal brothers.
Mr. Stearns. Now, the Waksal brothers obviously didn't want
to contact CBS ``60 Minutes,'' and say, ``No, you
exaggerated,'' as CBS will say, ``Well, this is what you told
us.'' So you have these two brothers hyping this and then you
have the media picking up and hyping it too.
Mr. Weiss. That seems to be the case; yes, sir.
Mr. Stearns. So then the public is under the perception
that it is legitimate because the media is promoting this, two
legitimate media sources, ``60 Minutes'' and Business Week.
What does it mean when the FDA puts a drug on a Fast Track
for an application?
Mr. Weiss. My understanding is that it is a drug that has a
lot of interest, looks really hot and is one that should get on
the market sooner rather than later, because it meets an unmet
need for certain patients with cancer, and it works.
Mr. Stearns. Does Erbitux legitimately make the argument
for a Fast Track with FDA, and who makes that argument? Do the
executives make it or does the FDA, and how is that determined?
Mr. Weiss. The executives make it. To some degree, the FDA
has to accept it too.
Mr. Stearns. And so the application was made by the
executives and then the FDA approved it and put it on a Fast
Track.
Mr. Weiss. That is my understanding.
Mr. Stearns. And the evidence, the clinical evidence to put
on a Fast Track has to be provided by ImClone, I guess, to the
FDA and say, ``This is what we have from our clinical evidence,
and we expect it to be on a Fast Track.''
Mr. Weiss. Yes, sir.
Mr. Stearns. In your opinion, should drugs go on a Fast
Track based on any new criteria or the criteria is
satisfactory?
Mr. Weiss. Sir, they got a Fast Track by they first in the
spring of 2000 came to FDA and asked for accelerated approval
and Fast Track. They had that meeting that we have discussed in
great detail in August of 2000. Part of that meeting was to
decide whether or not it should be accelerated, and it was
information that was made available to FDA at that meeting that
FDA decided that they would give them accelerated--they would
accelerate the application. In January of 2001, it was agreed
it would go Fast Track. Fast Track simply means that as the
application moves along, you can submit parts of it as you
complete it. The actual application itself was presented to FDA
on October 31, 2001. The biggest part of this Fast Track thing
is that it gives the FDA 60 days to review it, which is what
put the RTF letter into play.
Mr. Stearns. Because it was on a Fast Track, it allowed the
executives to submit documentation partially then; is that
correct?
Mr. Weiss. Yes, sir.
Mr. Stearns. Now, Dr. Weiss, you indicated the assessment
of Erbitux based upon your available information. You said it
is not a breakthrough drug, it is not a blockbuster drug, yet
they got Fast Track. Describe the problems in the 9923 study--
would you describe the problem in the 9923 study as merely
missing documentation or much more serious?
Mr. Weiss. Much more serious. There are three major
problems: One, a high rate of ineligibility; No. 2, that a
large fraction of the patients were given different doses of
the Irinotecan, major higher doses of the Irinotecan than they
received before, which was against the protocol; and then,
third, that there is a great deal of difference between the
investigators, the ImClone Review Committee and the BMS
consultants regarding who responded to the treatment and who
did not; in other words, the cancer shrunk versus did not
shrink. So those are the three major problems.
Mr. Stearns. It seems to me that those are pretty
transparent problems, that people who have a Ph.D. in
immunology would know and should have gone ahead. I note that
you discuss that ImClone attended the inclusion criteria of the
9923 study. What was this change and was it important?
Mr. Weiss. Yes. It changed the requirement of the amount of
therapy the patient had to have with Irinotecan beforehand. In
other words, the original version the patient had to have a
significant amount of that drug, 12 weeks of therapy and prove
that their cancer grew despite that therapy. The protocol was
changed that the patient could have had only a few doses, like
on one patient as few as four. And that is 4 weeks of therapy,
not 12 weeks. And you don't have sufficient information from
just 4 weeks of therapy that the drug didn't work and the
patient should now go on the study. That was the major change.
Mr. Stearns. Thank you, Mr. Chairman.
Mr. Greenwood. The Chair thanks the gentleman and
recognizes for 5 minutes the gentleman from North Carolina, Mr.
Burr.
Mr. Burr. I thank the Chair. Dr. Weiss, you said that it
was--the protocol was small and this was unusual. Is it unusual
for a drug under Fast Track to have a small protocol?
Mr. Weiss. No, it is not. A hundred and twenty patients
should be sufficient if you truly have reliable results and you
really see a benefit of the treatment.
Mr. Burr. How many Fast Track processes have you testified
on?
Mr. Weiss. I have never done this before.
Mr. Burr. And how many Fast Track processes have you
reviewed as a medical professional?
Mr. Weiss. I have not had any experience at the FDA
reviewing such things.
Mr. Burr. But you testify a lot because you are good. Is
your consulting role to review things and potentially file a
report on it?
Mr. Weiss. Yes. I both practice medical oncology, take care
of patients, and I act in this role of quality assurance for
the clinical trials that the National Cancer Institute
supports.
Mr. Burr. How many Fast Track trials to date have used
combination drugs in a Fast Track application?
Mr. Weiss. I have not reviewed any Fast Track applications,
sir. I never worked for the FDA.
Mr. Burr. Yes, sir. I understand that, I am just trying to
make sure the familiarity with the Fast Track process. But in
fact this is the first time there has ever been a Fast Track
process that used combination drugs. And in every case of the
participants, they had to have already had a traditional
chemotherapy approach that they had been non-responsive to; am
I correct?
Mr. Weiss. Yes. I think that is true. I can't think of----
Mr. Burr. My understanding is that is true, and do we know
in how many cases the particular drug----
Mr. Weiss. Irinotecan.
Mr. Burr. [continuing] Irinotecan was used?
Mr. Weiss. There is the original studies with that drug
conducted back in the early to middle 1990's that allowed that
drug to be approved for marketing.
Mr. Burr. And if I understand correctly from the notes I
have got, Dr. Leonard Saltz, of the Memorial Sloan-Kettering
Center, was intricately involved in the 9923 process?
Mr. Weiss. Yes. I know him and I hold him in high regard.
Mr. Burr. And what did he say when we interviewed him about
these?
Mr. Weiss. I don't believe we did interview him, sir.
Mr. Burr. Oh, we didn't interview him, okay. And there were
27 clinical sites that participated in 9923 trial, am I
correct?
Mr. Weiss. I am not sure. I would have to provide that for
the record.
Mr. Burr. But it was a number of them. Did we talk to any
of them relative to the discrepancies, the flaws----
Mr. Weiss. No, we didn't. We did not go out and interview
any of the original investigators.
Mr. Burr. I am just trying to better understand--as a
Member of Congress, and I may be the only one, I don't think I
am, I get calls all the time from patients who have gone
through the traditional mode and they have been non-responsive.
And they pick up the phone and they call and they say, ``Can
you find a clinical trial? Can you get me in something?'' I can
sort of understand how people snuck into this. I am not sure
who approved it, whether it was one of the clinical sites or
whether it was somebody at the FDA, maybe somebody changed the
guidance a little bit. Certainly, the numbers that you talk
about that you found are disturbing, and I think they do, to
some degree, question the results that were found. I think that
it is real important that we understand better from those 27
clinical sites what transpired. How did we have the
contamination of the pool? But I think to suggest that it was
flawed because it was small is in fact because it was a Fast
Track application, and I think that there is some degree of
history to prove that that is the case usually when we have it.
Let me ask you, Dr. Weiss, if the pool of individuals who
participated in this trial was clean, in other words the fit
within the parameters, as you understand them, that were agreed
to by the FDA and ImClone, would the results then, if they were
the same percentages that you see today, increase or decrease
your belief that there was something here that we ought to
really pursue, as it relates to the colorectal cancer?
Mr. Weiss. It would increase it. The problems are, as I
said, we don't know about the fact that there were so many
ineligible patients, why that occurred. We know that some of
the patients got a higher dose of Irinotecan than they should
have, and we also know that there is a good deal of disparity
between the various radiologists reviewing the CT scans to
decide whether or not the patient got a response. But if
everything were pure, then I can tell you it would be a very
interesting drug. I don't know that I would call it a
breakthrough, but it would be very interesting.
Mr. Burr. I purposely did not refer to it as a breakthrough
and never try to on this committee to refer to anything as a
breakthrough, other than when we actually pass a bill, because
usually that is a breakthrough.
I think it is extremely important, though, that we
understand better these 27 sites and why they made the
decisions to either lower or raise the level of the
chemotherapy drug that they were using in combination, because
in fact by itself Erbitux showed some response but not
tremendous response. It showed a much better response when used
in combination with--what was the name of that chem. drug
again?
Mr. Weiss. Irinotecan.
Mr. Burr. Irinotecan. But in the case of every person in
the trial, they had gone through a traditional chemotherapy
approach and had been non-responsive; in other words, their
problem had not gotten better. In most cases, it had gotten
worse; at best, it had stayed the same, am I correct?
Mr. Weiss. Yes.
Mr. Burr. So there was some promise that was there. Mr.
Chairman, I know my time has run out, and I hope that either in
other information that we have from our staff report or from
other witnesses we can better understand these discrepancies
that deal with the makeup of the protocols, why there were
deviations in the size of the chemotherapy that was given, and
hopefully we can follow up with Dr. Saltz and the 27 sites.
Mr. Greenwood. The Chair thanks the gentleman. Just to
clear the record, Dr. Weiss, you did review some of the audit
reports from some of the 27 sites; is that correct?
Mr. Weiss. Yes, sir.
Mr. Greenwood. Okay. The Chair thanks--Dr. Fletcher asks
unanimous consent for an additional 2 minutes for purpose of
inquiry.
Mr. Fletcher. Thank you, Mr. Chairman. I just had one more
question, especially the gentleman from North Carolina
certainly spurred my interest in the fact that looking at
Bristol-Myers Squibb, which purchased this company and I think
still, obviously, has a belief that this medication will help
in colorectal cancer, metastatic colorectal cancer, especially
in patients who have had failed conventional therapy. I mean
this is a company that invested a substantial amount of money.
They have a tremendous amount of expertise in this area. They
looked at this study. Now why do you think in looking at this
study that they still believe that this medication certainly
has a great deal of viability and yet you seem to dismiss the
study substantially?
Mr. Weiss. I do not dismiss the study substantially. I say
there are so many problems it is hard to know whether the drug
really works. And I do not know why the BMS people went ahead
with it, but I guess that I could use the analogy they thought
they were getting a diamond and they turned out to have gotten
a zircon.
Mr. Fletcher. Let me ask you just one follow-up with that,
and that is that what are the side effects of this medication?
Mr. Weiss. It has two side effects. One is any time you
give a protein, which it is, to anybody there is always the
chance of allergy.
Mr. Fletcher. Percentage of that, do you have it?
Mr. Weiss. Three or 4 percent. And the patient can't get
any more of that drug because they are allergic to it. The
other major side effect----
Mr. Fletcher. Does that include any anaphylactic reaction
or life-threatening----
Mr. Weiss. Yes. That is exactly what I mean. And the other
major side effect, where 85, 90 percent of the patients get it,
is they get cases of acne, skin reaction, and sometimes it is
bad enough so the patient wants to stop the therapy.
Mr. Fletcher. Thank you very much. Thank you, Mr. Chairman.
Mr. Greenwood. The Chair thanks the gentleman. The Chair
wishes, without objection, to enter two documents into the
record. One is the staff report entitled, ``An Inquiry into the
ImClone Cancer-drug Matter, Preliminary Committee Staff
Report,'' and the second is a report to the House Committee on
Energy and Commerce by Dr. Weiss. Without objection, those
documents will be entered into the record.
[The reports follow:]
An Inquiry Into the ImClone Cancer-Drug Matter
preliminary committee staff report
At the direction of Chairman W.J. ``Billy'' Tauzin and Subcommittee
Chairman James C. Greenwood (later joined by Ranking Minority Member
John D. Dingell and Subcommittee Ranking Minority Member Peter
Deutsch), Committee staff conducted an investigation into matters
surrounding the development by ImClone Systems, Inc., (ImClone) of its
colorectal cancer drug Erbitux (also known as C225 or Cetuximab).
ImClone, a small biotechnology company based in New York, was
founded by two brothers, Drs. Sam and Harlan Waksal, in 1984. ImClone
developed a cancer therapy drug called Erbitux, reportedly spending
more than $200 million on research on this drug. ImClone has never
turned a profit in its 18 years of existence.
In the spring of 2000, ImClone sought accelerated approval from the
Food and Drug Administration (FDA) to market Erbitux to meet the
medical need of colorectal cancer patients who have failed to respond
to standard chemotherapies. ImClone and Erbitux are internationally
known, having been featured on the CBS news program ``60 Minutes,'' and
the international cover of the July 30, 2001 issue of Business Week.
One reason Erbitux received such attention is that, according to
Business Week, this drug was ``the furthest along of a handful of new
cancer treatments that precisely home in on a growth signal found in up
to 50% of all cancer types.'' In clinical trials, ``the drug
demonstrated remarkable success in causing colon cancer to regress in
patients who had failed to respond to all other treatments.'' Erbitux
also is promising because it is an antibody that targets and blocks off
cancer cells, without the high degree of side effects from standard
cancer treatment. Such promise apparently prompted thousands of cancer
patients to try to obtain Erbitux either through clinical trial
enrollment or ``compassionate use'' access. For example, USA Today
reported that ImClone had received 400 calls a day from patients
desperate to get Erbitux outside of clinical trials
In September 2001, Bristol-Myers Squibb (BMS) bought 19.9 percent
of ImClone for $1 billion, and agreed to pay as much as $1 billion more
to obtain the marketing rights to Erbitux. On October 30, 2001, ImClone
submitted its Biologics License Application (BLA) for Erbitux to FDA.
On December 17, 2001, ImClone was one of seven biotechnology companies
included for the first time in the NASDAQ 100 index. Excitement and
confidence in ImClone was reflected in such media reports as an article
in the December 26, 2001 Los Angeles Times, which proclaimed,
``Erbitux, a colon cancer treatment from ImClone Systems Inc., is set
to make one of the biggest splashes of 2002.''
Many observers and investors were thus stunned to learn that, on
December 28, 2001, FDA issued a ``refuse-to-file'' (RTF) letter in
response to the ImClone license submission. The RTF letter is sent in
rare cases when a submission is deemed insufficient, and is a non-
public document, since it contains trade secret or confidential
commercial information. ImClone publicly announced the FDA decision the
evening of December 28th, which prompted a sharp sell off in ImClone
shares starting on December 31, 2001.
The Committee's investigation focused on the validity of the claims
that were asserted about ImClone's effectiveness, the FDA filing and
review process, and evidence uncovered by the Committee that friends
and family members of ImClone's founders sold large amounts of ImClone
stock just prior to ImClone's receipt of the negative determination
from FDA.
methodology
To review the above issues, Committee staff conducted hundreds of
hours of interviews with officials from ImClone, BMS, and other
pharmaceutical companies, FDA, Wall Street firms, patient advocacy
groups, oncologists, and representatives of family and friends of Sam
and Harlan Waksal. Staff also obtained and reviewed thousands of
documents from the above officials, corporations, and FDA. These
documents and discussions with officials included, but were not limited
to, the FDA drug approval process, clinical trials, the BMS tender
offer and milestone payments with ImClone, events leading up to the FDA
refusal-to-file letter, stock trading by ImClone officials and Waksal
family and friends, and ImClone's filings with the Securities and
Exchange Commission (SEC). Staff also reviewed the due diligence
activities conducted by seven other major pharmaceutical firms during
1999 and 2000, to determine what they learned about ImClone and its
products, and what their rationale was for not entering into an
alliance with ImClone, as BMS did in 2001.
the fda process: accelerated approval and fast-track designation
The ImClone case highlights the policy question of how to test
cancer drugs in a way that balances rapid access to life-saving drugs
with the need to ensure that the drugs work, particularly when a
publicly traded company is involved. In the standard approval process
for a drug, FDA normally requires one or more large clinical trials
(usually called Phase III trials) showing that a drug prolongs life
compared with a placebo or with an already-approved drug. Such trials
can take years, involve thousands of patients, and cost hundreds of
millions of dollars to perform.
When a company develops a drug for patients with life-threatening
diseases and there are comparatively few treatment options available,
FDA sometimes approves the new drug based on smaller trials, without a
control group for comparison. The trials normally look at whether
tumors are shrinking, which can be determined much faster than whether
patients are living longer. Often, these trials are limited to patients
who have not responded to existing therapies (known in medical terms as
``refractory'' patients). If FDA approves a drug based on such small
trials, it typically requires companies to conduct additional studies
to show more widespread benefit, such as additional survival time.
In ImClone's case, the company was trying to get approval for
Erbitux based on a study where the drug was used in combination with an
approved chemotherapy, in a universe of approximately 120 patients--a
very small patient pool. ImClone's strategy appears to have been
unprecedented. According to the BMS Due Diligence Findings, dated June
12, 2001: ``No accelerated approval has ever been granted for an
oncology drug for use in a combination therapy.'' It also should be
noted that ImClone was seeking FDA's agreement for accelerated approval
with a protocol design of a study that already had been
conducted.<SUP>1</SUP>
---------------------------------------------------------------------------
\1\ Some companies meet with FDA before they conduct the clinical
trial to seek the agency's input and guidance on the clinical protocol
design. Agreements between the company and FDA can be made binding
through Special Protocol Assessments. Although FDA's Center for Drugs
has used dozens of these assessments for cancer drugs, the FDA's Center
for Biologics (the division handling ImClone) had never used one for a
biologic product, other than in one instance involving a vaccine.
---------------------------------------------------------------------------
The Committee's investigation focused on two areas of the FDA
process prior to the submission of ImClone's BLA for Erbitux in October
2001: (1) the clinical protocol design and conduct of the pivotal 9923
study, and (2) the single-agent study of Erbitux.
In the spring of 2000, ImClone had two Phase II clinical trials
that looked promising for accelerated approval: a study in head-and-
neck patients, and a study in colorectal cancer patients. ImClone
originally anticipated that it would be the head-and-neck trial that
would be the vehicle for possible FDA approval. However, because of
faster accrual of patients and promising results, it was the colorectal
cancer patient study, known as the 9923 study, that ultimately formed
the clinical core of ImClone's BLA. According to ImClone, the results
of the 9923 study showed a 22.5% positive response rate in colorectal
cancer patients who already failed the standard chemotherapies.
In August 2000, ImClone was scheduled to meet with FDA to discuss,
among other things, whether the results of the 9923 study were
clinically meaningful and whether 9923 could meet accelerated approval
criteria and receive fast-track designation. Prior to the ImClone
meeting, FDA officials held an internal ``pre-meeting'' to prepare. At
this pre-meeting, the primary FDA medical review officer indicated her
reservations concerning the 9923 study. Her notes from this meeting
state: ``1) Is ORR [overall response rate] = 15% clinically meaningful
for colorectal CPT-11 failure? Only if as a single agent. 2) CP02-9923
meet accel. approval criteria and fast track? No.'' According to
Committee staff interviews, nobody on the FDA staff expressed
disagreement with the assessment of the medical review officer at this
internal ``pre-meeting.''
On August 11, 2000, FDA met with ImClone officials and consultants
to discuss ImClone's accelerated approval strategy using the 9923
study. According to the minutes of this meeting prepared by FDA, FDA
participants described the 9923 study during this meeting as follows:
``This is a Phase 2 open label study of Cetuximab [Erbitux]
plus irinotecan in metastatic or recurrent colorectal cancer
refractory to irinotecan. Following two courses of irinotecan,
patients' tumors are measured and based on the results, divided
into the Stable Disease Treatment Group (tumor volume change <
25%) or the Progressive Disease Treatment Group (tumor >
increased in volume 25%). Patients then receive irinotecan plus
cetuximab until treatment failure.''
This description accurately tracks the first version of ImClone's
protocol for 9923. According to that August 2, 1999 Version 1.0 of
Protocol IMCL CP02-9923, Section 3.1.2, the patient ``must have
demonstrated progression of disease after completing a minimum of two
courses of a regimen containing irinotecan.'' However, a few months
later, when patients were being enrolled into the study, ImClone
relaxed the inclusion criteria in an amended protocol. According to the
October 18, 1999 Version 2.0 of Protocol IMCL CP02-9923 amended Section
3.1.2 (Inclusion Criteria), the patient ``has documented stable disease
(must have received a minimum of 12 weeks of irinotecan therapy) or
progressive disease at any time after receiving an irinotecan-
containing regimen. Copies of scans must be provided to confirm the
lack of an objective response to prior therapy.'' (Emphasis added).
Therefore, FDA was relying on an outdated version of the protocol
at the August 2000 meeting with ImClone. Yet nobody from ImClone
informed FDA about the amended protocol at this meeting or any time
thereafter. Moreover, the minutes of the meeting taken by the company
and FDA were exchanged, yet, again, the company did not correct the
FDA's misunderstanding on this point.
At the August 11, 2000 meeting with ImClone, the most senior FDA
medical officer agreed that ``the basic trial design is probably
acceptable,''--albeit, relying on the incorrect version of the study
protocol--and, in effect, overruled the view of the primary medical
reviewer that had been expressed at the pre-meeting among FDA
personnel. The senior FDA officer told Committee staff that her
decision to accept the protocol was based on her belief that she should
be flexible for a promising drug meeting an unmet medical need, but was
also based on representations that ImClone made about the special
synergistic effect of Erbitux when used in combination with irinotecan.
The senior FDA officer said that ImClone asserted that Erbitux showed
no activity when used alone, which would support the claim of
synergistic effect. This assertion was based on animal data and one
small human trial. In the context that ImClone discussed this point,
she assumed the human trial involved human colorectal cancer patients.
The senior FDA officer later learned that the human trial involved
renal cancer patients, which cannot be used as a basis for determining
single-agent activity in colorectal cancer patients. ImClone disputes
that the issue of single-agent activity came up at the August 11, 2000
meeting, but the company agrees that the issue was discussed in
subsequent phone calls and meetings with FDA.
On January 12, 2001, FDA granted fast-track designation for
Erbitux. The FDA fast-track designation appears to be based on the
inclusion criteria of the outdated version of the 9923 protocol.
According to the January 12, 2001 letter to Nikhil Mehta of ImClone
from Glen Jones of FDA: ``[W]e are designating as a Fast Track
development program the investigation of cetuximab in combination with
irinotecan for its effect on durable tumor responses (complete and
partial responses) in patients with metastatic colon cancer who are
refractory to standard chemotherapy (5 fluorouracil and irinotecan),
where refractory is defined as progressive disease during at least two
cycles of standard doses of 5-fluorouracil and irinotecan.'' (Emphasis
added).
On January 19, 2001, FDA sent a letter to ImClone requiring them to
conduct a small study of 25-50 patients to test the response rate when
using Erbitux alone as opposed to being used in combination with the
toxic Irinotecan. As FDA explained:
``You are expected to study and submit the following in order
to have a biologics license application which meets filling
criteria and in order for your development program to continue
to meet the criteria for Fast Track designation:
1. Preclinical and clinical data (including at least 25-50
patients) which excludes the possibility (e.g., through
establishment of the upper limit of the 95% confidence
interval around the observed response rate and the lower
limit of the 95% confidence interval around the observed
response rate with combination therapy) that the response
rate observed with the combination of irinotecan and
Cetuximab [Erbitux] would not be observed with single agent
Cetuximab at the dose and schedule proposed. You must
provide evidence that continuation of a toxic agent
(irinotecan) is necessary to achieve the desired clinical
effect. If you do not have such data, you should generate
this information in a randomized controlled trial directly
comparing the efficacy of single agent Cetuximab (the
generic name for Erbitux) to the combination of Cetuximab
plus irinotecan to establish the contribution of irinotecan
in this setting.''
During the winter and spring of 2001, while conducting the single-
agent study, ImClone was actively pursuing a joint venture or a sale of
the company, or of a majority interest in the company, to several
pharmaceutical companies. It appears that, in pursuing such an
arrangement, the ImClone leadership attempted to downplay the
significance of the single-agent study required by FDA. For example,
according to one drug company official's e-mail, dated April 6, 2001:
``They [Imclone] have to complete the pilot trial of C225
[Erbitux] alone in refractory colon cancer patients, 25-40
patients. The FDA has required a final study report from this
trial prior to an ODAC [Oncologic Drug Advisory Committee]
meeting. Per [ImClone] estimately [sic], they believe a final
study report will be sent Oct/Nov, meaning a likely Spring ODAC
meeting. According to Harlen [reference to Harlan Waksal], the
FDA has agreed that while this study is necessary for filing,
it will not impact the approval of the combination in
refractory. They need to have the single agent activity per
their regulations. They won't use the small trial to compare RR
[response rate] of the single agent to the combo, but will use
it to help plan further development of C225 as a single agent
if appropriate.''
On October 12, 2001, ImClone finished its single-agent study. The
results of this study showed six responses out of 57 patients, for a
response rate of 10.5%. As FDA noted in its December 28, 2001 refusal-
to-file letter: ``Based on the summary information provided, and
assuming that the results can be confirmed, the data do not show that
the response rate observed with the combination of Cetuximab and
irinotecan could not also be observed with single agent Cetuximab at
the dose and schedule proposed.''
Even though there was a difference in the response rates (10.5%
single agent; 22.5% combination), because both studies had such small
populations, the confidence intervals overlapped and, thus, there was
still a possibility that a very sick colorectal cancer patient could
respond just as well with Erbitux alone as with Erbitux combined with a
toxic chemotherapy. As a result, additional studies would be needed to
isolate and establish the contributions of each drug. These additional
studies would, at a minimum, significantly delay the launch of Erbitux.
However, it appears that ImClone attempted to portray the results
of the single-agent study and the prospects for its application in an
inaccurate light to BMS, its likely new business partner. According to
an October 12, 2001 e-mail from BMS Chief Scientific Officer Peter
Ringrose to other BMS executives: ``I just had Sam Waksal on the phone
re the single-agent data. Apparently it came out at 13% which he feels
is half the C225 plus CPT-11 data. They have informed the FDA who were
``pleased'' and confirmed that they would be on for the Feb 28 ODAC
(FDA's Oncologic Drugs Advisory Committee). He reckons they will be on
the market by March. I am planning to meet with Sam in NY week after
next.''
But, according to Committee staff interviews with FDA personnel, no
one at FDA spoke to ImClone about the single-agent data on or around
October 12, 2001, and FDA had never placed Erbitux on the agenda for
the February 2002 ODAC meeting. The submission of the single-agent
study to FDA was not completed until December 4, 2001.
To more closely evaluate these two studies relied upon by ImClone,
the Committee hired an expert consultant to review the studies'
designs, protocols, and results. The key findings from this review are
contained in a Report to the House Committee on Energy and Commerce by
Raymond Weiss, MD, FACP (attached as an appendix to this report).
the filing of the erbitux application and fda's review
On October 31, 2001, ImClone completed its BLA application for
Erbitux by submitting the clinical portion of the BLA to FDA. This
clinical portion included the records for the 9923 study and the
single-agent study 0141 (except for data on 17 patients, which was
submitted on December 4, 2001). Under the fast-track designation of the
FDA Modernization Act of 1997, the agency was required to complete its
review of Erbitux and determine filability within 60 days of the
submission date. Until this submission, FDA had relied on assurances
from ImClone and the records in ImClone's Investigative New Drug file.
FDA did not actually see the details of the clinical trials for Erbitux
until ImClone submitted this portion of its BLA at the end of October
2001. Upon reviewing the clinical portion, FDA reviewers immediately
identified significant problems, and the number of problems continued
to mount as their review continued in November 2001. According to the
FDA reviewers, the Erbitux application, as filed, raised serious
questions and lacked needed information that ImClone had been advised
on several occasions would be required as part of the application. The
FDA reviewers told Committee staff that it was readily apparent that
the clinical research was severely deficient and could not meet the
legal requirement of an adequate and well-controlled clinical trial.
On November 30, 2001, key FDA reviewers reached the conclusion that
problems in the clinical portion were so severe that there was no
option but to issue a refusal-to-file (RTF) letter, a rare event. On
December 4, 2001, after raising the prospect of an RTF in a
conversation with one of the FDA reviewers, ImClone's Regulatory
Affairs Vice President formed an impression for the first time that an
RTF letter was a realistic possibility, according to her interview with
Committee staff. That same day, she reported this conversation and
FDA's concerns to Dr. Harlan Waksal. On December 5, 2001, FDA
management decided ImClone would receive an RTF letter. On December 7,
2001, a BMS Regulatory Affairs executive reported that she was not sure
ImClone fully understood the implications of the comments of a FDA
medical reviewer regarding the individual contributions of the drugs in
the combination trial. In the e-mail opinion of the BMS executive,
based on the FDA reviewer comments, ``a refusal to file decision
doesn't appear altogether unlikely at this point.''
Both FDA and officials from the two companies told Committee staff
that the tone of conversations between the agency and ImClone
dramatically changed following the early December discussions with FDA.
By mid-December 2001, it was clear to both ImClone and BMS that FDA had
serious concerns about the Erbitux drug application. After a
teleconference with FDA on December 12, 2001, key ImClone executives
perceived an increased probability of an RTF letter, according to their
interviews with Committee staff. On December 20, 2001, FDA told ImClone
and BMS to no longer contact the agency until after they received FDA's
letter on filability on December 28, 2001. Some personnel from ImClone
and BMS thought from the tone of this conversation that an RTF letter
was likely, but some in ImClone still held out hope for a positive FDA
response. On December 24, 2001, an outside consultant for BMS was able
to get an incidental confirmation from a source at FDA that FDA would
be sending an RTF letter to ImClone. The next day, December 25, BMS
Senior Vice President for Marketing Brian Markison called Dr. Harlan
Waksal, who was vacationing in Colorado, to inform him of this
confirmation BMS' consultant had received from an FDA source. Dr. Sam
Waksal was vacationing at a Caribbean island and returned to New York
on December 26, 2001.
It appears that Sam and Harlan Waksal and other key ImClone and BMS
executives knew about the RTF letter by the morning of December 26,
2001. That day, ImClone sent a letter to FDA in an attempt to prevent
the RTF by offering to waive its rights to the 60-day deadline that FDA
had to meet by December 28, 2001. FDA declined the offer on the grounds
that ImClone could not legally waive the deadline. On December 27,
2001, Sam Waksal for the first time personally interacted with FDA with
respect to Erbitux, calling a senior official at FDA's Center for
Biologics he knew when Waksal worked at the National Institutes of
Health. The purpose of this call appears clear. Based on internal notes
produced to the Committee by ImClone, dated 12:00 noon on December 27,
2001, ``Sam and Harlan [Waksal] are calling FDA to try to stop RTF.''
The senior FDA official declined to intercede, and on December 28,
2001, at approximately 2:55 p.m., FDA faxed the RTF letter to ImClone.
The company in turn publicly revealed the receipt of the letter later
that day, at approximately 7:14 p.m.
the rtf letter and subsequent events
As discussed above, on December 28, 2001, FDA issued a refusal-to-
file letter in response to the ImClone submission. The RTF letter, sent
in rare cases when a submission is deemed insufficient, is a non-public
document containing trade secret or confidential commercial
information. In its December 31, 2001 investors' conference call,
ImClone executives said that FDA regulators sent the RTF letter because
the Erbitux application was missing certain ``train of documentation''
information needed by regulators to accept the filing. ImClone said it
would be able to answer FDA's questions by the end of the first
quarter, leading, hopefully to an approval of Erbitux in the fall of
2002. On the first trading day after the issuance of the RTF letter,
ImClone's shares fell $11.15, or 20 percent, to $44.10 per share.
On January 4, 2002, the Cancer Letter published excerpts of the RTF
letter, which indicated that FDA had greater concerns about ImClone's
data than company executives stated in the December 31 conference call
with analysts and investors. The Cancer Letter article reported that
the RTF letter detailed a long list of FDA concerns that went far
beyond record keeping. The FDA was quoted as saying that ImClone's
clinical trial was ``not adequate and well controlled,'' and that
additional studies would be needed. Moreover, the letter suggested that
FDA had warned ImClone starting in August 2000 that its data would have
to demonstrate that irinotecan, a standard chemotherapy, was needed
along with Erbitux. But the data submitted by ImClone was not
sufficient to distinguish the effects of irinotecan and Erbitux. After
the Cancer Letter report appeared, ImClone shares fell sharply further,
to open on January 7, 2002, at $34.96 per share.
On January 9, 2002, after ImClone had lost nearly $1.5 billion in
market value since December 28, 2001, and after the filing of at least
11 federal class action lawsuits, Sam Waksal, ImClone's president and
chief executive officer, attempted to explain the company's situation
at the J.P. Morgan H&Q Healthcare conference. ``What happened was that
we put together a faulty package and we screwed up,'' Waksal reportedly
said. The principal problem, he said, was the company's failure to
provide documentation demonstrating that the patients enrolled in
ImClone's pivotal trial had met the eligibility criteria.
the bms-imclone partnership and imclone's loans to key officials
During 1999 and 2000, ImClone invited BMS, as well as several other
major pharmaceutical firms, to meet with representatives of ImClone to
conduct due diligence with a view toward acquiring a majority ownership
in ImClone. Over this time period, several pharmaceutical firms,
including BMS, met with Sam Waksal and conducted preliminary due
diligence activities. Each pharmaceutical firm, including BMS,
concluded that the price being asked by ImClone was too high to
continue discussions at that time.
In early 2001, BMS conducted an extensive internal review of its
own biologics business, and evaluated a number of opportunities to
expand its biologics capabilities. BMS concluded in April 2001 that
ImClone's IMC-C225 compound, Erbitux, could sustain its leadership
position in oncology, significantly contribute to its corporate growth
strategy, and provide a significant step towards BMS becoming a leader
in biologics.
In mid-April 2001, Mr. Brian Markison, BMS Senior Vice President of
Marketing, contacted Dr. Sam Waksal to determine whether ImClone would
be interested in pursuing a deal involving a significant equity
investment in ImClone by BMS. On May 3, 2001, Dr. Waksal, Mr. Markison
and Dr. Peter Ringrose, Chief Scientific Officer of BMS, met in New
York City to discuss BMS' interest in ImClone. During that meeting, Dr.
Waksal outlined the type of deal that would be acceptable to ImClone.
Dr. Waksal's preference was that ImClone remain a publicly traded
entity after the deal. As a result, Mr. Markison agreed to explore a
possible transaction whereby BMS would acquire a majority interest of
ImClone in return for BMS common stock, together with a separate
agreement providing for the commercial rights to IMC-C225 by BMS.
After further discussions, on May 19, 2001, the two companies
entered into a confidentiality agreement, and BMS conducted further due
diligence of ImClone. On June 1, 2001, Mr. Richard Lane, President of
BMS' Worldwide Pharmaceutical Division, and Dr. Waksal met to discuss
an outline of a deal prepared by ImClone's legal advisors that called
for an acquisition by BMS of a 70% stake in ImClone.
On June 5, 2001, BMS' Board of Directors entertained the majority
ownership deal with ImClone. However, some BMS board members raised
concerns about acquiring majority ownership of ImClone, and suggested
that BMS seek an arrangement of less equity in ImClone while still
securing the rights to C-225. On June 7, 2001, representatives of the
two companies met to discuss BMS' proposed due diligence activities.
Shortly thereafter, employees of BMS and representatives of its legal
and financial advisors conducted an extensive due diligence review of
ImClone in the areas of clinical development, legal matters,
information technology, marketing and sales, tax, finance,
manufacturing, intellectual property and regulatory affairs.
In late June 2001, BMS concluded that the acquisition of a minority
interest in ImClone, together with a separate commercial agreement
relating to the co-development, co-promotion, and distribution of
ImClone's IMC-C225 compound, would be a preferable structure for a deal
with ImClone. Thereafter, Dr. Waksal was contacted by Mr. Peter Dolan,
Chief Executive Officer of BMS, and Mr. Lane, who confirmed to Dr.
Waksal that BMS no longer had interest in a deal to acquire a majority
interest in ImClone where ImClone remained a publicly-traded entity.
Mr. Dolan and Mr. Lane reaffirmed BMS' interest in ImClone and BMS'
intent to consider other deals that met the economic and business
objectives of both companies. Dr. Waksal stated that he was willing to
consider alternative proposals, but emphasized that he was not
interested in a commercial transaction that did not also include a
significant equity investment in ImClone by BMS. Dr. Waksal also
advised BMS that he felt ImClone's existing stockholders would benefit
most if BMS acquired an equity interest through a tender offer to
ImClone's existing stockholders.
On June 26, 2001, BMS provided ImClone with an outline of a
proposed commercial transaction for the co-development, co-promotion,
and distribution of IMC-C225, and an equity structure that proposed an
acquisition of a 19.9% interest in ImClone by BMS. During the end of
June and the first two weeks of July 2001, BMS and ImClone, and their
respective legal and financial advisors, met several times to discuss
terms and conditions of a 19.9% equity investment and a commercial
transaction relating to rights to IMC-C225. Also during this time, the
two companies and their respective financial advisors discussed the
price at which BMS would offer to purchase the ImClone shares, which
would be at a significant premium to the publicly-traded stock price.
In mid-July 2001--after ImClone was virtually assured of the 19.9%
equity deal and in anticipation of the lucrative tender offer from
BMS--ImClone's Board of Directors agreed to lend $35 million to Sam and
Harlan Waksal and Robert Goldhammer, the Chairman of the Board, to
provide them with an opportunity to exercise stock options and warrants
they held to purchase a total of approximately 4.5 million shares of
ImClone stock. Sam Waksal and Harlan Waksal's loans were $18.2 million
and $15.7 million respectively. Mr. Goldhammer's loan was in the amount
of $1.2 million. These unsecured loans were at an interest rate equal
to the prime lending rate plus 1 percent (7.75 percent on the date of
the note).
On July 20, 2001, BMS and ImClone agreed, on a preliminary basis,
to a tender offer price of $70.00 per share. On September 17, 2001, the
Board of Directors of BMS unanimously approved the ImClone deal. On
September 19, 2001, ImClone's Board of Directors approved the deal, and
both companies issued separate press releases announcing that BMS would
acquire 14.4 million shares, or about a 20 percent stake, of ImClone's
common stock for $1 billion through a tender offer of $70 a share,
exclusively set aside for ImClone shareholders. At the time of the
announcement, ImClone shares were selling at roughly $40 per share. BMS
also agreed to pay as much as another $1 billion in milestone payments
in return for the marketing rights to Erbitux in the United States.
On October 29, 2001, thousands of ImClone's shareholders
participated in the BMS tender offer to purchase ImClone stock at $70 a
share, a $20 premium over the increased trading price. Sam Waksal sold
814,674 shares, and Harlan Waksal sold 776,450 shares, or just more
than 20% of each of their holdings. Although all ImClone shareholders
were allowed to tender their shares of ImClone stock to BMS, only the
Waksals, the Chairman of the Board, and one other board member were
given loans by ImClone to purchase ImClone stock, at highly discounted
prices, and then tender it to BMS at $70 per share.
A number of experts in the financial and biotech areas told
Committee staff that there is no precedent in pharmaceutical-biotech
alliances for the BMS and ImClone deal, which resulted in the immediate
personal enrichment of top executives through a tender offer to
existing shareholders. The more typical alliance formed between a major
pharmaceutical company and a smaller biotech firm is centered on
milestone payments that provide much needed cash to the biotech firm.
bristol-myers squibb due diligence of imclone
The Committee's investigation also focused on BMS' due diligence
into the clinical research behind Erbitux prior to its decision to
strike a commercial deal with ImClone. In May 2001, BMS scientists were
mobilized to examine the clinical research package. On June 14, 2001,
BMS Senior Vice President Laurie Smaldone sent an e-mail to her
colleagues Peter Ringrose and Beth Seidenberg concerning ImClone,
stating: ``On the whole this remains a very high risk opportunity.''
Among the critical outstanding issues she cited:
``Pivotal CRC [colorectal cancer] program issues--Single
agent activity. The trial which is ongoing will need to be
shared with us. We should attend the FDA meeting with ICE
[ImClone] when the data is final. There is no agreement that we
could find that is reassuring regarding activity level needed
for approval.
``Weak dose selection rationale--They have developed a PK
[pharmacokinetic] rationale for dose selection, however the
dose is questionable for refractory patients and the safety
margin for early stage patients has not been determined. In
their phase 3 first line study they are evaluating the same
dose used in refractory disease. This is already seen as a
problem by the FDA and by us . . .
``Safety--The safety of the product, specifically related to
skin toxicity, bleeding, allergy has not been well
characterized. This reemphasizes the weakness of the dose
selection argument . . .''
Ultimately, concerns about the single-agent study and the 9923
study were not completely resolved before BMS entered into the
agreement with ImClone. In a June 12, 2001 ``Summary of Key Findings,''
BMS executives pointed out the risks of the results of the single-agent
study:
``FDA has requested that data be provided on the antitumor
activity of C225 as a single agent. Preclinical data has thus
far been provided to FDA to address this issue, but they have
persisted in their interest that clinical data be provided. No
accelerated approval has ever been granted for an oncology drug
for use in a combination therapy. (emphasis added). In the
event that tumor responses are observed in the ongoing single-
arm single agent refractory colorectal study then it is
possible that this could throw into question the approvability
of the combination claim based on nonrandomized antitumor data
(given that the value of CPT-11 after CPT-11 might be
questioned).''
On September 4, 2001, a BMS Vice President sent an e-mail to other
senior BMS executives, stating:
``Based on today's discussions with Susan and Steve our
preliminary recommendation is a `go' decision. We are still
trying to obtain data from the mono therapy study from ICE
[ImClone]. As of 6:30 PM today we did not have any more
information. I will be discussing this with Susan again in the
AM.''
Despite requests to BMS, Committee staff has not been provided any
evidence at this time that shows that BMS obtained the data on the
single-agent study prior to making its historic deal with ImClone.
In addition, the BMS independent radiology review of ImClone 9923
study lowered the ImClone reported response rate and the size of the
patient pool, both significantly. In an August 30, 2001 e-mail, the BMS
independent radiologist noted:
``Attached to this message you will find the latest update of
the spread sheet we are using to keep track of our review of
the CT's and MRI's of patients enrolled in CP02-9923.
``We are in the process of reviewing a total of 34 cases, 27
of which were initially assigned by the investigator to the PD
[progressive disease] cohort and 7 of which were assigned to
the SD [stable disease] cohort. To date we have reviewed 23/27
cases from the PD cohort and 6/7 cases from the SD cohort.
``In the PD cohort we can now confirm 14 partial responses.
We may have 15, but one case will require adjudication. With 4
more cases to review, and the one case for adjudication, the RR
in the PD cohort could be as high as 15 + 4/120 = 15.8%.
``I should mention, however, that in 4 of these confirmed
partial responses our radiologists have judged the disease to
be only stable at the time of patient's enrollment into the
study. If these 4 cases were thrown out, then the highest
possible response rate would 11 + 4/120 = 12.5%. However, we
have not conducted a strict review of all of the 120 cases, and
it is likely that if we carefully reviewed all of the cases we
would throw many out on the same basis [emphasis added].
Indeed, it is my understanding that the study sponsor has
conducted such an analysis on the basis of its own
radiologists' review, and has thereby reduced the denominator
of the patient population with radiographically confirmed
progressive disease.
``I will review the study sponsor's data and see if I can get
at the same denominator [patient pool size] as it did (? N =
89), and calculate the response rate accordingly. More cases
and analysis to follow tomorrow... ``
It should be noted that, if indeed the denominator in 9923 was
below 100 (particularly if it were as low as 89, which the BMS
independent radiologist appears to have indicated in the above e-mail),
the entire study probably could no longer serve to support an
accelerated approval application. As ImClone consultant, Roger Cohen
MD, e-mailed to Dr. Harlan Waksal on January 4, 2002:
``9923 is a small study to begin with. It cannot get much
smaller and have any hope of serving as a registration study. I
think it is clear that it has to have at least 100 fully
eligible and evaluable subjects (closer to 100).''
Therefore, although BMS received tentative support from its
scientific leadership and outside consultants, it appears that the
status of crucial issues were as follows at the time BMS entered into
the alliance with ImClone in September 2001:
1. Single agent activity--BMS lacked the data from the single agent
study.
2. Response rate--BMS outside radiology review indicated that a strict
review could lower the response rate below the clinically
meaningful standard of 15 percent.
3. The denominator, or patient pool size, of the pivotal trial appeared
to be under 100, and therefore could not serve as a basis for
accelerated approval according to ImClone's own consultant.
bms reaction to imclone comments on the refusal-to-file letter
On the evening of December 28, 2001, ImClone revealed to the public
that it had received a refusal-to-file letter from FDA. On December 29,
2001, a Reuters news article reported: ``Sam Waksal, ImClone's chief
executive officer, told Reuters that the agency first wants more
`annotation' information, about how the company verified that patients
enrolled in its trials had indeed failed previous drug regimens and
that subsequent tumor reductions attributed to Erbitux were indeed
real. Concerns raised by the FDA mainly involve how the data were
presented and do not raise outright concerns about safety or efficacy
of the drug, the CEO added.'' An internal BMS e-mail dated December 30,
2001, responding to earlier BMS e-mails on the Reuters article, states:
``I agree that some alot [sic] of Sam's comments are misleading and at
this point we should continue to be silent. As you heard from
yesterday's discussion, there's a lot we don't know.''
On that same date, December 30, 2001, another BMS official
commented on the draft documents being prepared for the ImClone
investor relations conference call: ``These draft documents leave me
most uncomfortable. They gloss over the seriousness of the RTF letter
and make it appear that the integrity of the study results is not in
question, when in fact it is . . . We will also need to rewrite major
portions of the clinical and pharmacology part of the BLA including a
new 9923 study report, new 141 (monotherapy) study report, new ISS and
ISE based on these revised reports. I know that this is not what
ImClone wants to tell their investors, but I think it represents the
reality of this situation.''
trading activity of sam and harlan waksal, their family members and
close friends, and imclone directors
Adding to the controversy over Erbitux has been the trading of
ImClone stock by ImClone insiders a few weeks before the FDA refusal-
to-file letter, and by Waksal family relatives and friends during the
48 hours before the FDA letter was issued. Committee staff examined
public records and conducted interviews with Sam and Harlan Waksal, and
with representatives of several of their family members and friends, to
determine the degree of trading in ImClone stock by these individuals
over the last year. Of particular interest were board members who
tendered stock to BMS on October 29, 2001, and whether any board
members or officers of ImClone sold stock during the critical month of
December 2001. Committee staff also attempted to gather information on
those trades of Sam Waksal's immediate family members and close friends
that were identified during discussions with Dr. Waksal.
Committee staff found that ImClone board members exercised stock
options to acquire 8.1 million shares of ImClone common stock between
the period of June 1, 2001 and October 29, 2001. Committee staff
examined this time period because it represents the period of
negotiations between BMS and ImClone officials regarding an equity
purchase of ImClone by BMS. Of these 8.1 million ImClone shares, Sam
and Harlan Waksal acquired approximately 4.1 million. Each board member
who exercised stock options during this time period is shown in the
table below.
ImClone Incorporated Stock Options Exercised by ImClone Board Members During the Period of Negotiations with BMS
June 1 Through October 29, 2001
----------------------------------------------------------------------------------------------------------------
Options
ImClone Board Members Date Exercised Shares excercised at
----------------------------------------------------------------------------------------------------------------
Barth, Richard............................................... 6/13/2001 2,500 $3.00
Barth, Richard............................................... 9/17/2001 2,500 $3.00
Barth, Richard............................................... 10/29/2001 27,328 $4.50
Devita, Vincent.............................................. N/A ............... ...............
Goldhammer, Robert........................................... 7/16/2001 316,684 $.28-$6.63
Kies, David.................................................. 8/2/2001 30,000 $6.63
Kies, David.................................................. 7/25/2001 55,000 $3.00-$5.44
Kopperl, Paul................................................ 7/24/2001 120,000 $3.00-$6.63
Kopperl, Paul................................................ 10/29/2001 6,430 $39.91
Levine, Arnold............................................... 8/3/2001 16,000 $5.43
Mendelsohn, John............................................. 10/29/2001 90,226 $.53-$2.75
Miller, William.............................................. N/A ............... ...............
Waksal, Harlan............................................... 7/12/2001 2,080,000 $3.03-$9.13
Waksal, Sam.................................................. 7/12/2001 2,060,000 $5.69-$9.13
............... 4,806,668 ...............
----------------------------------------------------------------------------------------------------------------
It should be noted that ImClone awarded many of these options to
the Waksal brothers in 1999 and 2000, and accelerated the vesting of
these options with the rise in the stock price. According to ImClone's
SEC filings, on May 24, 1999, the stockholders approved the grant of an
option to Sam Waksal to purchase 1,000,000 shares and Harlan Waksal to
purchase 650,00 shares of Common Stock at a per share exercise price
equal to $18.25, the last reported sale price of the Common Stock on
the date shareholder--approval was obtained at the annual shareholders
meeting. The option was to vest no later than six years from the grant
date and specified amounts were subject to earlier vesting if specified
Company Common Stock price thresholds were met. On May 31, 2000, the
stockholders approved amendments to a total of 1,600,000 options that
were granted to Sam and Harlan Waksal the year before. The shareholders
also approved amendments to a total of 3,300,000 additional options
held by Sam and Harlan Waksal. All these options were amended to
provide that each tranche vested immediately upon achievement of the
relevant stock target price associated with such tranche, without
regard to the passage of time that was a requirement in the original
options. The options became fully vested and exercisable upon the
approval of the amendments. As reported in a previous section, the
ImClone board granted the Waksal brothers and two other directors
company loans to finance the exercise of their options as part of the
tender offer.
In total, Committee staff found that members of ImClone's Board of
Directors tendered 2.1 million shares of ImClone common stock at $70 a
share to BMS on October 29, 2001. This represents approximately 15% of
the stock tendered by ImClone shareholders to BMS. Sam and Harlan
Waksal tendered a total of 1.6 million shares of ImClone stock to BMS
for about $111 million. Simply stated, this means that the Waksal
brothers received over 10 percent of the entire proceeds paid by BMS
during the $1 billion tender offer, and the ImClone Board combined
received nearly 15 percent of the proceeds from the BMS tender offer.
The table below shows the number of shares tendered and the proceeds
for each of ImClone's Board members.
ImClone Incorporated Shares Tendered to BMS by ImClone Board Members
October 29, 2001
----------------------------------------------------------------------------------------------------------------
ImClone Board Members Shares Tendered Cost Per Share Proceeds
----------------------------------------------------------------------------------------------------------------
Barth, Richard............................................... 27,328 $70 $1,912,960
Devita, Vincent.............................................. 129 $70 $9,030
Goldhammer, Robert........................................... 364,781 $70 $25,534,670
Kies, David.................................................. 30,007 $70 $2,100,490
Kopperl, Paul................................................ 27,864 $70 $1,950,480
Levine. Arnold............................................... 1,329 $70 $93,030
Mendelsohn, John............................................. 90,226 $70 $6,315,820
Miller, William.............................................. 8,573 $70 $600,110
Waksal, Harlan............................................... 776,450 $70 $54,351,500
Waksal, Sam.................................................. 814,674 $70 $57,027,180
2,141,361 $70 $149,895,270
----------------------------------------------------------------------------------------------------------------
Committee staff also examined trading by ImClone board members and
officers during the critical month of December 2001 to determine if any
ImClone officials who sold stock had knowledge of discussions with FDA
regarding whether the agency would accept the Erbitux filing. We found
that, with the exception of Harlan Waksal's disposition of 700,000
shares on December 6, 2001 (discussed below), three officers of ImClone
sold stock prior to December 18, 2001. In each case, Committee staff
were told that the officials involved were unaware of the details of
the FDA review of Erbitux, sold less than 20 percent of their holdings
in ImClone, and did so based on their brokers' advice. Even though
ImClone has internal rules that require officers of the company to
receive pre-clearance before trading in company stock, two of the three
trades were not pre-cleared. In one case, the individual was not an
officer at the time of the trade, but was since promoted. In the other
case, the officer claimed to have simply forgot to pre-clear the trade.
On December 21, 2001, ImClone issued an order prohibiting its
employees from trading in ImClone stock until after the FDA decision on
Erbitux was made public. ImClone has told Committee staff that no board
member or officer of ImClone traded ImClone stock between December 21
and 28, 2001. However, Committee staff discovered that several of Sam
Waksal's immediate family members or friends sold ImClone stock on
December 27, 2001--the day before ImClone announced publicly that FDA
had refused to accept the filing of Erbitux. This list of traders
included his father, sister, two daughters, and son-in-law. In
addition, Committee staff learned from discussions with Sam Waksal that
the SEC has questioned him about trades made by three other friends on
December 27 or 28, 2001.
With the exception of Sam Waksal's father (who has not yet provided
information to the Committee), attorneys for each of the family members
admitted that their client sold stock on or around December 27, 2001,
but asserted that they received no non-public information about ImClone
and each had a reason why they sold the stock on that particular day.
Although phone records and logs obtained from Sam and Harlan Waksal,
covering the time period December 26-28, 2001, suggest that both men
had conversations with each other and may have had conversations with
members of their family and friends, both Sam and Harlan Waksal denied
that they had tipped off anyone as to their knowledge that ImClone was
about to receive a RTF letter from FDA.
On December 6, 2001, Harlan Waksal sold 700,000 shares of ImClone
stock. On October 31, 2001, Harlan Waksal notified the ImClone board
members that he planned to execute a forward transaction involving
700,000 shares of ImClone common stock:
Dear Members of the Board:
As a result of my recent option exercise and the sale of
stock to Bristol-Myers Squibb I am left with an additional tax
burden that I need to meet. As I am averse to having such a
great personal liability I plan to meet this obligation (and
provide some liquidity), by the sale of additional shares of
ImClone stock. I am moving to do this through a prepaid forward
contract for the sale of stock. This will be a 700,000 share
transaction, the stock will still be under my voting control
for the next three years and I will retain some continued
upside if the stock continues to perform as we anticipate. I
plan on finalizing this transaction over the next two weeks.
I look forward to seeing you at the Board dinner on the 14th.
Sincerely,
Harlan W. Waksal, M.D.
Dr. Harlan Waksal told Committee staff that, in November 2001, he
attempted to shop the sale of his ImClone stock. Dr. Waksal filed a
Form 144 with the SEC, announcing his intention to sell 700,000 shares
of ImClone. Dr. Waksal told Committee staff he was forced to sell the
ImClone stock to come up with enough cash to pay substantial taxes
generated from his prior exercise of stock options and his tendering of
shares to BMS. He also stated that, because he did not want to sell
shares, he entered into a forward sales contract that gave him a
percentage of the cash value of the shares up front but still allowed
him to control the shares and defer tax payments for another two years.
Simply put, Dr. Waksal received less than what the stock was worth at
the time of the sale, but he also limited his downside risk when
ImClone's stock price dropped considerably in the month thereafter. It
should be noted that Dr. Waksal sold the 700,000 shares on the same day
that ImClone's share price hit its 52-week high.
Moreover, in February 2002, Dr. Sam Waksal revealed about 50
unreported stock trades that should have been reported to the SEC and
returned to ImClone about $486,000 in profit he made on some sales of
company stock because he may have violated an insider-trading
regulation.
conclusion
The key findings from the Committee staff's investigation at this
point are as follows:
<bullet> In August 2000, the primary FDA medical reviewer handling the
ImClone/Erbitux matter did not believe that ImClone's 9923
study met the criteria for accelerated approval and fast-track
designation. Her view is substantiated by the opinions of
leading oncology experts who reviewed the 9923 protocol for the
Cancer Letter in 2002 and found serious protocol design flaws.
<bullet> At the August 11, 2000 meeting between ImClone and FDA to
discuss a possible accelerated approval strategy, FDA relied on
the wrong version of the 9923 protocol, which had a tighter
inclusion criteria than the one actually used in the amended
protocol. ImClone did not correct FDA's mistake.
<bullet> At the same August 11, 2000 meeting, the senior FDA medical
official in effect overruled the primary medical reviewer and
said the protocol design was probably acceptable.
<bullet> The senior FDA official now believes she was misled by ImClone
about its claim that a human clinical trial showed no single
agent activity. This official said that this claim was a key
factor in her decision to allow ImClone's application to
proceed.
<bullet> FDA's decision to grant fast-track designation to ImClone's
Erbitux appears to have been based on the wrong version of the
9923 protocol, and was made before it had the single-agent data
on Erbitux.
<bullet> The 9923 study was afflicted with many problems. The BMS
independent radiology review showed that strict scrutiny of the
study data resulted in a response rate of only 12.5% (as
opposed to the claimed 22.5% response rate) and that the number
of evaluable patients was only approximately 89 (as opposed to
the original 120). If these data were in fact correct, the 9923
study failed to meet the 15 percent clinical endpoint set by
ImClone and the study would be too small to support an
accelerated approval by itself.
<bullet> BMS scientists were aware of the issues involving the response
rate and the size of the patient pool, and BMS apparently did
not have the single-agent data prior to entering into its
agreement with ImClone in September 2001. Nevertheless, BMS
went ahead with the ImClone agreement.
<bullet> The results of the single-agent study showed enough activity
in Erbitux alone to throw into doubt the assumption used for
the pivotal 9923 study--that the toxic chemotherapy,
irinotecan, needed to be used in combination with Erbitux to
produce stronger and more meaningful response rates. Because of
this doubt, FDA needed additional studies to resolve this
issue, which would mean a substantial delay in launching
Erbitux.
<bullet> ImClone knew the results of the single-agent study on October
12, 2001, but its then-CEO appeared to portray these results in
a positive light to the BMS Chief Scientific Officer.
<bullet> On October 29, 2001, BMS consummated the tender offer with
ImClone. As a result, Sam and Harlan Waksal made about $111
million from the sale of stock. In acquiring their shares, the
Waksal brothers had received loans from ImClone to finance the
exercising of options.
<bullet> On November 30, 2001, key FDA reviewers recommended a refusal-
to-file letter for the Erbitux application.
<bullet> On December 4, 2001, ImClone's Regulatory Affairs Vice
President confirmed in a conversation with one of the FDA
reviewers that an RTF letter is a realistic possibility.
<bullet> On December 5, 2001, senior FDA management at the Center for
Biologics determined that an RTF letter would be sent to
ImClone. It took several days for all members of the FDA review
team to learn of this decision and it did not become official
until a team meeting held on December 17, 2001.
<bullet> On December 20, 2001, FDA informed ImClone and BMS that a
decision had been reached and that the decision letter would be
sent on December 28, 2001. ImClone and BMS officials suspect an
RTF.
<bullet> On December 24, 2001, an outside consultant to BMS obtained
confirmation from an FDA official that an RTF letter will be
issued.
<bullet> On December 25, 2001, a BMS executive informed Dr. Harlan
Waksal that ImClone would be getting an RTF letter.
<bullet> On December 26, 2001, key ImClone and BMS officials were aware
of the RTF. ImClone sent a letter to FDA to try to prevent the
RTF letter.
<bullet> On December 27 and 28, 2001, Waksal family relatives and some
friends sold ImClone shares.
<bullet> On December 28, 2001, ImClone received the RTF letter.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Greenwood. The Chair thanks our witnesses for your
testimony and for your help of this subcommittee with its work
and excuses you.
The Chair now calls forward Dr. Samuel Waksal, Ph.D., who
is the former chief executive officer of ImClone Systems. Would
you please pull the microphone forward very close to you and
push the button on it so that it is on.
Mr. Samuel Waksal. It should be on.
Mr. Greenwood. Thank you. Thank you. It is on. Dr. Samuel
Waksal is a former ImClone chief executive officer and is here
with us today under subpoena. On April 19, 2001, Dr. Waksal did
submit to an interview--2002, excuse me--Dr. Waksal did submit
to an interview with committee investigators that lasted for
about 4 hours. Dr. Waksal was scheduled for another staff
interview on May 30 but withdrew from this scheduled interview
on advice of counsel. My understanding is that Dr. Waksal
authorized his counsel to advise the committee that he will
rely on his constitutional right not to testify at today's
hearing. I believe that this privilege should be personally
exercised before the members of this subcommittee, as we have
done in the past, and that is why we have requested Dr.
Waksal's appearance today, and I thank you for joining us, sir.
I would urge you, given the importance of your testimony,
to reconsider your decision to invoke your Fifth Amendment
rights, especially since you may need to amend statements you
made earlier to the committee investigators during your
interview which, if the Government criminal and civil
complaints filed against you yesterday are true, may not be
wholly accurate.
Dr. Waksal, you are aware that the committee is holding an
investigative hearing, and in doing so we have the practice of
taking testimony under oath. Do you have any objection to
testifying under oath?
Mr. Samuel Waksal. No.
Mr. Greenwood. The Chair also advises you that under the
rules of the House and the rules of the committee, you are
entitled to be advised by counsel. Do you desire to be advised
by counsel during your testimony today, sir?
Mr. Samuel Waksal. I have counsel here with me.
Mr. Greenwood. Okay. Would you please identify your counsel
for the record or your counsel may identify himself.
Mr. Liman. Yes. It is Lewis Liman from the law firm Wilmer,
Cuttler and Pickering.
Mr. Greenwood. Thank you. At this time, Mr. Waksal, if you
would stand and raise your right and I will swear you in.
[Witness sworn.]
Mr. Greenwood. Okay. Thank you, Dr. Waksal. You are now
under oath, and you may give a 5-minute statement for the
record if you choose. Do you care to, sir?
TESTIMONY OF SAMUEL WAKSAL, FORMER CHIEF EXECUTIVE OFFICER,
IMCLONE SYSTEMS, INC.
Mr. Liman. Dr. Waksal will not be giving a statement for
the record at this time.
Mr. Greenwood. Very well. Then the chairman will recognize
himself for questioning of the witness.
Mr. Liman. We have submitted a letter to the subcommittee.
Mr. Greenwood. Without objection, your letter will be
entered into the official record of these proceedings, sir.
Mr. Samuel Waksal. Thank you.
[The letter follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Greenwood. Dr. Waksal, on October 29, 2001, you and
your brother sold $1.6 million of shares of ImClone to Bristol-
Myers Squibb for about $111 million, a sale helped, in part, by
all of the hype ImClone generated about its purported wonder
drug, Erbitux and made possible, in part, by unsecured loans of
about $35 million that you and your brother received from
ImClone so you could exercise options to purchase ImClone stock
at highly discounted prices. During the same time period,
ImClone was running the pivotal clinical trial aimed at
supporting an accelerated FDA approval for ImClone's cancer
drug, Erbitux. The study turned out to be riddled with severe
problems with no apparent quality control by ImClone. As a
result, FDA refused to even accept the Erbitux application for
filing.
Given the contrast and outcomes, the financial gain of $111
million for you and your brother before the FDA application was
even filed and the failure to deliver on your promise to
thousands of very sick cancer patients to have Erbitux on the
market in spring of 2002, would it be fair to say that your
strategy at ImClone was to put personal profiteering ahead of
patients, sir?
Mr. Samuel Waksal. Unfortunately, upon the advice of
counsel, I wish to assert my constitutional rights and
respectfully decline to answer.
Mr. Greenwood. We thank you, sir, and we respect your right
to do so. But let me be clear, Dr. Waksal. Are you refusing to
answer the question on the basis of the protections afforded to
you under the Fifth Amendment to the United States
Constitution?
Mr. Samuel Waksal. Yes.
Mr. Greenwood. Dr. Waksal, do you intend to invoke your
Fifth Amendment rights in response to any and all questions
posed to you here today?
Mr. Samuel Waksal. Yes.
Mr. Greenwood. Okay. Then you are excused from the witness
table at this time, but I advise you that you remain subject to
the processes of this committee, and that if this committee
needs such, then we may recall you, sir.
Mr. Samuel Waksal. Thank you.
Mr. Greenwood. Okay. You are excused, sir.
The Chair then calls forward Dr. Harlan Waksal, M.D., who
is now the chief executive officer of ImClone Systems, Inc.;
Dr. Laurie Smaldone, M.D., senior vice president, Global
Regulatory Sciences for Bristol-Myers Squibb Company. And
accompanying Dr. Smaldone is Mr. Brian Markison, vice
president, the Division of Oncology at Bristol-Myers Squibb
Company.
The Chair welcomes our witnesses. You are both aware, all
three of you are aware that this committee is holding an
investigative hearing, and it is the practice of this
subcommittee to take testimony in such hearings under oath. Do
any of you object to giving your testimony under oath this
morning?
Mr. Harlan Waksal. No.
Ms. Smaldone. No.
Mr. Greenwood. Okay. It is also the responsibility of the
Chair to advise the witnesses that you are entitled to be
represented by counsel. Do either of the witnesses choose to be
represented by counsel? Dr. Waksal, do you?
Mr. Harlan Waksal. I do have counsel here, sir.
Mr. Greenwood. Okay. Your counsel may join you at the
table, if he chooses. Would you identify your counsel by name,
sir?
Mr. Harlan Waksal. Chip Lowenson.
Mr. Greenwood. Would you pull the microphone much closer to
yourself, sir, and make sure that it is turned on.
Mr. Harlan Waksal. Is that okay now?
Mr. Greenwood. That is perfect, sir. Would you identify
your counsel, please?
Mr. Harlan Waksal. Chip Lowenson.
Mr. Greenwood. Okay. Dr. Smaldone, do you choose to be
represented by counsel?
Ms. Smaldone. I have my counsel here with me.
Mr. Greenwood. You are going to have to do the same thing
with your microphone.
Ms. Smaldone. Sorry. I do have my counsel here with me
today.
Mr. Greenwood. And would you identify your counsel, ma'am?
Ms. Smaldone. Evan Chesler.
Mr. Greenwood. Pardon me?
Ms. Smaldone. Evan Chesler.
Mr. Greenwood. Okay. If you would then both rise and raise
your right hand. Mr. Markison, if you would rise as well and
raise your right hand.
[Witnesses sworn.]
Okay. The Chair advises you that you are under oath. And,
Dr. Waksal, you are recognized for 5 minutes to provide an
opening statement. Do you choose to?
Mr. Harlan Waksal. I do indeed. Thank you.
Mr. Greenwood. Please proceed.
TESTIMONY OF HARLAN WAKSAL, CHIEF EXECUTIVE OFFICER, IMCLONE
SYSTEMS, INC.; LAURIE SMALDONE, SENIOR VICE PRESIDENT, GLOBAL
REGULATORY SCIENCES, BRISTOL-MYERS SQUIBB COMPANY; AND BRIAN
MARKISON, VICE PRESIDENT, DIVISION OF ONCOLOGY, BRISTOL-MYERS
SQUIBB COMPANY
Mr. Harlan Waksal. Chairman Greenwood, Congressman Deutsch
and members of the subcommittee, my name is Harlan Waksal, and
I am the President and CEO of ImClone Systems. I have held that
position for only 3 weeks, but I have been with the company
since it was founded 17 years ago.
Thank you for this opportunity to tell you about Erbitux.
Since we licensed this compound 9 years ago, ImClone has
invested hundreds of millions of dollars in research and
testing Erbitux. Our effort reached a critical point 2 years
ago. Doctors at preeminent research centers like Memorial
Sloan-Kettering Cancer Center started to report success in
using Erbitux in combination with chemotherapy to treat
terminally ill patients. These doctors and their patients were
telling us that the Erbitux combination therapy was shrinking
solid tumors in patients with no other treatment options. So we
set out to make this drug available to cancer patients as
quickly as possible.
Congress created the Fast Track process to encourage
expedited review of drugs that have the potential to address an
unmet medical need related to a life-threatening illness. If
ever a drug was a good candidate for Fast Track, Erbitux was
it. And in fact, the FDA granted Erbitux Fast Track status in
January 2001. During this same period, we had many meetings
with the FDA to determine whether the clinical trial we had
underway for colorectal cancer patients could serve as the
basis for regulatory approval. After the FDA reviewed our study
protocol, we reached an understanding with the agency that this
trial could be the pivotal study for our application.
Over the next few months, we worked closely with the FDA to
develop an application for approval. When the FDA asked
questions, we answered them. When the FDA asked for more data,
we got it for them. Such give and take is a common part of the
application process. We were very pleased with the results of
the clinical trial. It found that roughly 20 percent of
patients responded to that treatment. These results were
reported by independent physicians at preeminent cancer
centers--doctors with no stake in the outcome, who saw the drug
at work, first hand, in their patients. These conclusions were
then confirmed by an independent committee, known as an IRAC.
Twenty percent was an impressive result, since the FDA had
approved Irinotecan, a chemotherapy drug, with a 13 percent
response rate.
But we were not the only ones excited by the potential of
Erbitux. In May 2001, doctors at the leading oncology
conference reacted enthusiastic to the data presented by Dr.
Leonard Saltz on the Erbitux trial. And in September of last
year, after months of due diligence by their top scientists,
Bristol-Myers Squibb committed to invest $2 billion in ImClone,
a huge vote of confidence for Erbitux from the world's leading
cancer drug company.
Despite these encouraging signs, the FDA refused to file
ImClone's application. Today, this hearing will be filled with
questions as to why the FDA refused to file our application,
and I am happy to answer those questions. But in brief, let me
say that with the benefit of 20/20 hindsight, we could and
should have done a better job in documenting the clinical
evidence. Many of our critics have suggested that the pilot
trial was too small and that our results were not proven by the
most rigorous testing standards. But I would remind those
critics that Congress explicitly created Fast Track to bring
drugs to market that had not been through the rigors of a Phase
III test, wisely deciding that when patients are dying and
drugs demonstrate potential for treating them, the balance
should be struck in favor of getting those drugs to patients
quickly.
Today, ImClone and its partners continue to work closely
with the FDA to move forward in the approval process. Erbitux
remains on the FDA's Fast Track. We will be submitting new data
as it comes in and still hope to win accelerated approval. We
also have other clinical tests underway, including large Phase
III trials.
Mr. Chairman, in conclusion, I would like to make two
points. First, while we had the right intentions in trying to
get Erbitux through the filing process in 2001, we failed. Yes,
setbacks in regulatory strategies occur, in fact they are
common, and ImClone is hardly among the only biopharmaceutical
or pharmaceutical companies that have failed in gaining swift
approval for a drug. But that does not change the fact that we
let patients down, and for that, I am truly sorry.
Second, as the company's new CEO, I am committed,
absolutely committed, to getting this drug approved. I will
work closely with the FDA and try to continue the cooperative
relationship we have had with the agency. We want to get them
the information they need as quickly as we can so that
hopefully Erbitux can be available to cancer patients in
desperate need of more treatments.
I appreciate the opportunity to be here today to answer
your questions.
[The prepared statement of Harlan Waksal follows:]
Prepared Statement of Harlan Waksal, President and Chief Executive
Officer, ImClone Systems
Chairman Greenwood, Congressman Deutsch and Members of the
Subcommittee, my name is Harlan Waksal, and I am the President and
Chief Executive Officer of ImClone Systems. I have held that position
for only three weeks, but I have been with the company since it was
founded, 17 years ago.
Thank you for this opportunity to tell you about Erbitux--a
potential new treatment for cancer that attaches itself to growth
factor receptors on cancer cells, depriving tumors of the ability to
grow. Since we acquired the license for this compound nine years ago,
ImClone has invested hundreds of millions of dollars to support its
clinical program of research and testing.
Our efforts reached a critical point two years ago. Over the course
of the year 2000, doctors at preeminent research institutes such as the
Memorial Sloan-Kettering Cancer Center reported success in using
Erbitux in combination with chemotherapy to treat terminally ill
patients. These doctors--and their patients--were telling us that the
Erbitux combination therapy was shrinking solid tumors in patients who
did not have other treatment options. As a result, we set out to make
this drug available to cancer patients as quickly as possible.
As this Subcommittee knows, Congress created the ``Fast Track''
process to encourage the expedited review of drug applications where
the drug in question has the potential to address an unmet medical need
related to a life-threatening illness. If ever a drug was a good
candidate for ``Fast Track,'' Erbitux was it. And in fact, the FDA
granted Erbitux ``Fast Track'' status in January 2001.
During this same period, we had multiple meetings and conversations
with the FDA, to determine whether the clinical trial we had underway
for colorectal cancer patients--giving Erbitux and chemotherapy in
combination to patients who had failed chemotherapy alone--could serve
as the basis for regulatory approval. After the FDA reviewed our test
protocol, we reached an understanding with the agency that this
clinical study could be the pivotal study for our application to win
approval for Erbitux.
Over the next few months, we worked closely with the FDA to develop
an application for approval. When the FDA asked questions, we answered
them. When the FDA asked for more data, we got it for them. Such give
and take is a common part of the application process.
We were very pleased with the results of the clinical trial. It
found that roughly 20 percent of patients responded to the treatment.
These results were reported by independent physicians at preeminent
cancer centers--doctors without any stake in the outcome, who saw this
drug at work, first hand, in their patients. These conclusions were
then confirmed by an independent review committee, commonly known as an
``IRAC.'' The approximately 20% response rate was an impressive result,
since the FDA had approved irinotecan--a chemotherapy drug--with a 13%
response rate in a similar patient population.
But we were not the only people excited by the potential of
Erbitux. In May of 2001, doctors at the leading oncology conference--
after hearing a presentation from Dr. Leonard Saltz regarding the
clinical trial--reacted enthusiastically to the data. And in September
of last year, after months of extensive due diligence by their top
scientists, Bristol-Myers Squibb committed to investing $2 billion in
ImClone and Erbitux--a huge vote of confidence from the world's leading
oncology pharmaceutical company, which clearly believed that Erbitux
showed great potential.
As the Subcommittee knows, despite these encouraging signs, the FDA
refused to file ImClone's application for Erbitux. Today's hearing will
be filled with questions as to why the FDA refused to file our
application, which I am happy to answer. But in brief, let me say that
with the benefit of 20/20 hindsight, we now know that we could and
should have done a better job in putting together our application
package.
Many of our critics have suggested that our pivotal trial was too
small, and that our results were not proven by the most rigorous
testing standards. But, I would remind those critics that Congress
explicitly created Fast Track to bring drugs to market that had not
been through the rigors of a Phase III test--wisely deciding that when
patients are dying, and there is a drug that demonstrates ``potential''
for treating those patients, the balance should be struck toward
getting new drugs to those patients quickly.
Notwithstanding our setbacks, ImClone and its partners continue to
work closely with the FDA to move forward in the approval process.
Today, Erbitux remains on the FDA's ``Fast Track.'' We will be
submitting new data as it comes in, and still hope to win accelerated
approval. We also have underway a variety of other clinical tests,
including large, Phase III trials.
Mr. Chairman, in conclusion, I would like to make two points.
First, while we had the right intentions in trying to get Erbitux
through the filing process in 2001, we failed. Yes, setbacks in the
regulatory process are common, and ImClone is hardly alone among drug
companies in failing to win swift approval for a drug. But that does
not change the fact that we let patients down, and for that, I am truly
sorry.
Second, as ImClone's new CEO, I am committed--absolutely
committed--to getting this drug approved. I will work closely with
patients and the advocacy community to see this through. And I will
also work closely with the FDA, to continue the open and cooperative
relationship we have had with the agency. We want to get them the
information they need, as quickly as we can, so that hopefully Erbitux
can be available to cancer patients in desperate need of more treatment
options.
I appreciate the opportunity to be here today, and will be glad to
answer your questions now.
Mr. Greenwood. The Chair thanks you, Dr. Waksal, for your
statement. The Chair also thanks you for your presence and your
willingness to come here without subpoena. And let me
personally say that I certainly hope that you succeed in having
this drug approved if it will in fact help patients.
Dr. Smaldone, you are recognized to give your opening
statement for 5 minutes, please.
TESTIMONY OF LAURIE SMALDONE
Ms. Smaldone. Yes, thank you. Thank you, Mr. Chairman and
thanks to the committee. My name is Laurie Smaldone, and I am
senior vice president of Worldwide Regulatory Science at the
Bristol-Myers Squibb Pharmaceutical Research Institute, and a
physician specializing in oncology. I have been with Bristol-
Myers Squibb for 17 years, and before that I was an oncologist
in academic practice. While the scope of my responsibilities at
Bristol-Myers Squibb today crosses therapeutic lines, a great
deal of my professional experience has been in the area of
cancer and, more specifically, cancer treatments.
I am pleased to have the opportunity to address the
subcommittee, as well as respond to its questions, about
Bristol-Myers Squibb's commitment to the anti-cancer drug,
Erbitux. First, I would like to say that from a scientific and
clinical perspective, we believe that Erbitux is an active
anti-cancer agent. Evidence suggests that Erbitux shows anti-
tumor activity in several tumor types but in particular in
patients with late-stage colorectal cancer that is refractory,
or, in other words, unresponsive to available treatments. These
are patients who otherwise have few if any treatment options
available to them. We believe this about Erbitux now, just as
we believed it when we invested in ImClone Systems and entered
into a commercialization agreement with ImClone relating to
Erbitux back in September 2001.
It is important for the subcommittee to understand that one
of the diseases for which Erbitux is being investigated as a
possible treatment, advanced refractory colorectal cancer, is
particularly insidious. For individuals diagnosed with it, the
prognosis is uniformly grim; this is an incurable disease.
Still, many patients are desperate for any treatment that will
give them additional time with family and loved ones, and in
some cases, Erbitux has helped provide this additional time.
While the difficulties in finding adequate treatments for
cancer are well known, it is useful to point out that great
progress has been made in understanding the course and
complexities of cancer over the last many years. Nonetheless,
beyond early detection and surgical intervention, major impact
with chemotherapy and biologic therapies is limited, and still
most tumors go undetected until quite an advanced stage, which
makes any treatment effect at that time far more difficult to
achieve.
As the world's leading provider of cancer therapies,
Bristol-Myers Squibb has focused much of its research and
development on finding better treatments, more targeted and
less toxic therapies than those currently available. And our
strategy also has been to look outside our company for
promising compounds such as Erbitux, which itself represents a
new and potentially revolutionary way of fighting cancer
through a more targeted approach. Still, we realize that these
advances, while significant, are not the ``magic bullet''
against cancer, but they do represent real progress.
My second point is that it is important, in the midst of
all the issues identified, that we together find a way to
address these issues and make Erbitux available to patients as
quickly as possible. That is why we continue to work closely
with ImClone to further the development of Erbitux and to
resubmit the application to the U.S. Food and Drug
Administration as soon as possible. While some patients have
been able to benefit from Erbitux in clinical trials and
compassionate use programs, we know that only after approval
and commercialization will all those who truly need the drug
actually get it and will physicians be able to further evaluate
its role in different settings.
Finally, I wish to stress that this is about everyday
people, more than 100,000 each year, who 1 day go to their
doctor and have their entire life turned upside down by a
diagnosis of colon cancer. For these people, Erbitux is not an
exciting scientific advance or a compelling idea or a promising
investment. It is a treatment option and a way to have more
time and hope. I can say this with some conviction because I
had the honor recently of meeting an Erbitux patient who told
me quite candidly what the drug has meant to her. And she has
permitted me to share her story with the committee, which I
will do very briefly.
A little over a year ago, when she was 38 years old,
Michael Ann Mullinix of Belvidere, Illinois, was told by her
doctor that she had stage 4 metastatic colon cancer that had
spread to her ovaries. Even with surgery, she was given a short
time to live. A wife and a mother of teenage children, Michael
Ann decided she wanted to go on an Erbitux regimen. Following
surgery, she began treatment with Erbitux and other
chemotherapeutic agents last August as part of a clinical
study. And as of today, she is essentially cancer free and
continues to respond.
In the course of our conversation, Michael Ann told me that
she was worried not that her cancer would return, or how she
was coping with this serious illness. She was worried about the
future of Erbitux, about its continued availability as a
therapy alternative, not just for her benefit but for many
others who could potentially benefit as well. When she heard
that I was coming to testify before this subcommittee, she
asked me to convey this message that I have stressed in this
statement: We need to work together to do all that we can to
get Erbitux to all the patients who need it as quickly as
possible.
I should point out that there are risks involved in this
project, just as there are risks involved in all of biomedical
research. We have no guarantee that Erbitux ultimately will be
the important therapeutic advance we expect it to be. But
knowing what we know about it today, there is every reason to
be hopeful about its promise and to move forward with the
clinical development and registration process.
Once again, I am grateful for the opportunity to address
the committee on this important subject. I will be happy now to
answer any questions you have.
[The prepared statement of Laurie Smaldone follows:]
Prepared Statement of Laurie Smaldone, Senior Vice President, Worldwide
Regulatory Science, Bristol-Myers Squibb Pharmaceutical Research
Institute
Thank you, Mr. Chairman. My name is Laurie Smaldone, and I am
senior vice president of Worldwide Regulatory Science at the Bristol-
Myers Squibb Pharmaceutical Research Institute, and a physician
specializing in oncology. I have been with Bristol-Myers Squibb for 17
years, and before that I was an oncologist in academic practice. While
the scope of my responsibilities at Bristol-Myers Squibb crosses
therapeutic lines, a great deal of my professional experience has been
in the area of cancer and, more specifically, cancer treatments.
I am pleased to have this opportunity to address the subcommittee,
as well as respond to its questions, about Bristol-Myers Squibb's
commitment to the anti-cancer agent Erbitux. First, I would like to say
that--from a scientific and clinical perspective--we believe that
Erbitux is an active anti-cancer agent. Evidence suggests that Erbitux
shows anti-tumor activity in patients with late-stage colorectal cancer
that is refractory--or, in other words, unresponsive--to available
treatments. These are patients who otherwise have few if any treatment
options available to them. We believe this about Erbitux now, just as
we believed it when we invested in ImClone Systems and entered into a
commercialization arrangement with ImClone relating to Erbitux back in
September 2001.
It is important for the subcommittee to understand that the disease
for which Erbitux is being investigated as a possible treatment--
advanced refractory colorectal cancer--is particularly insidious. For
individuals diagnosed with it, the prognosis is generally grim. Still,
many patients are desperate for any treatment that will give them
additional time with family and other loved ones. And in some cases,
Erbitux has helped provide this additional time.
While the difficulties in finding adequate treatments for cancer
are well known, it is useful to point out that great progress has been
made in understanding the course and complexities of cancer.
Nonetheless, beyond early detection and surgical intervention, major
impact with chemotherapy and biologic therapies is limited, and still
most tumors go undetected until quite an advanced stage.
As the world's leading provider of cancer therapies, Bristol-Myers
Squibb has focused much of its research and development on finding
better treatments--more targeted and less toxic therapies than those
currently available. And our strategy also has been to look outside our
company for promising compounds such as Erbitux, which itself
represents a new and potentially revolutionary way of fighting cancer
through a more targeted approach. Still, we realize that these
advances--while significant--are not the ``magic bullet'' against
cancer, but they represent real progress.
My second point is that it is important--in the midst of all the
issues identified--that we together find a way to address these issues
and make Erbitux available to patients as quickly as possible. That is
why we are working closely with ImClone to resubmit the application for
Erbitux to the U.S. Food and Drug Administration as soon as possible.
While some patients have been able to benefit from Erbitux in clinical
trials and compassionate use programs, we know that only after approval
and commercialization will all those who truly need the drug actually
get it, and will physicians be able to further evaluate its role in
different clinical settings.
Finally, I wish to stress that this is about everyday people from
all walks of life--thousands of them each year--who one day go to their
doctor or to the hospital and have their entire life turned upside down
by a diagnosis of colon cancer or other solid tumors. For these people,
Erbitux is not an exciting scientific advance or a compelling idea or a
promising investment. It's a way to have more time.
I can say this with some conviction because I had the honor
recently of meeting an Erbitux patient who told me quite candidly what
the drug has meant to her. And she has permitted me to share her story
with the committee, which I will do now, briefly.
A little over a year ago, when she was 38 years old, Michael Ann
Mullinix of Belvidere, Illinois, was told by her doctor that she had
stage 4 colon cancer that had spread to her ovaries. Even with surgery,
she was given just 9 months to live. A wife and a mother of teenage
children, Michael Ann decided she was going to fight the odds by going
on an Erbitux regimen, which she had heard about on television.
Following surgery, she began treatment with Erbitux and other
chemotherapeutic agents last August as part of a clinical study. And as
of today, she is essentially cancer free.
In the course of our conversation, Michael Ann told me that she was
worried. Not that her cancer would return, or how she was coping with
this serious illness. She was worried about the future of Erbitux--
about its continued availability as a therapy alternative, not just for
her benefit but for many others who would potentially benefit from it
as well. And when she heard that I was coming to testify before this
subcommittee, she asked me to convey the message I have stressed
several times in this statement: we need to work together to do all we
can to get Erbitux to all the patients who need it as quickly as
possible.
I should point out that there are risks involved in this project,
just as there are risks in all biomedical research. We have no
guarantee that Erbitux ultimately will be the important therapeutic
advance we expect it to be. But knowing what we know about it today,
there is every reason to be hopeful about its promise and to move
forward with the clinical development and registration process.
Once again, I am grateful for this opportunity to address the
committee on this important subject. I'll be happy now to answer any
questions you may have.
Mr. Greenwood. Thank you, Dr. Smaldone. We appreciate your
presence and your testimony.
Ms. Smaldone. Thank you.
Mr. Greenwood. The Chair recognizes himself for 5 minutes
for purposes of inquiry. Let me address my questions initially
to Dr. Waksal. When ImClone filed the Erbitux biologics
licensing application, otherwise known as a BLA, on October 31,
2001, did you expect that ImClone was in fact on a glide path
toward approval?
Mr. Harlan Waksal. Absolutely. We did file it at that time.
In fact, it was a rolling BLA. That was the last piece of it.
We thought we were well on the track to moving this drug
through approval.
Mr. Greenwood. And did you expect that Erbitux BLA to go
before the February 2002 FDA Advisory Committee called ODAC?
Mr. Harlan Waksal. Well, we were hopeful that based on
timing of the review clock that the February ODAC would be the
appropriate time for this drug to be in front of the Oncologic
Drug Advisory Committee.
Mr. Greenwood. Okay. Does Lilly Lee, ImClone's Regulatory
Affairs vice president report directly to you?
Mr. Harlan Waksal. Yes, she does.
Mr. Greenwood. And was she reporting to you her contacts
and communications with FDA during the approval process?
Mr. Harlan Waksal. Yes, she was.
Mr. Greenwood. Okay. Dr. Lee, could you please come forward
to be sworn in and answer a few questions? Welcome, Dr. Lee.
You may be seated for a moment and then we will ask you to
stand again. You have heard me say, Dr. Lee, that this is an
investigative hearing, and it is our practice to take testimony
under oath. Do you have any objections to giving your testimony
to us under oath?
Ms. Lee. No.
Mr. Greenwood. Okay. You also should be advised that you
are entitled to counsel. Do you wish to be advised by counsel?
Ms. Lee. Yes, please.
Mr. Greenwood. Okay. And could you identify your counsel
for us, please?
Ms. Lee. Mr. Richard Emory.
Mr. Greenwood. Mr. Richard Emory?
Ms. Lee. Yes.
Mr. Greenwood. Okay. Thank you. In that case, would you now
rise and raise your right hand?
Ms. Lee. Sure.
[Witness sworn.]
Mr. Greenwood. Thank you, Dr. Lee. Did you have a face-to-
face meeting with the FDA reviewers on December 4, 2001?
Ms. Lee. Yes, I did.
Mr. Greenwood. Okay. Did the FDA reviewers raise serious
questions about the documentation of the study at that time?
Ms. Lee. They had raised questions about the documentation.
Mr. Greenwood. Okay. Did you ask the FDA reviewers whether
the FDA was going to send ImClone a refusal-to-file letter?
Ms. Lee. No, I did not ask that.
Mr. Greenwood. Okay. Did it come up in the conversation?
Was there any discussion of the possibility of a refusal-to-
file letter?
Ms. Lee. The only mention of a refusal-to-file was in the
context of the FDA reviewer laying out the next steps, and it
was one of the three possible outcomes after the would have the
internal filing meeting. The three outcomes that he had laid
out is, one, the FDA could accept and review; two, since this
was a rolling submission, ImClone may decide that the last
piece was actually not the last piece that complete the BLA;
and three, is the FDA may issue a refusal-to-file, RTF. So
these three options are really any drug that filed an
application, any BLA would face those three same scenarios.
Mr. Greenwood. Did you not tell our committee staff in your
interview that after your conversation an RTF letter for the
first time became a possibility in your mind?
Ms. Lee. For me it was on December 13 that the possibility
that the review--issues that we were working on with the FDA
may lead to an RTF.
Mr. Greenwood. Okay. Let me turn back to you, Dr. Waksal.
Mr. Harlan Waksal. Yes, sir.
Mr. Greenwood. Do you recall Dr. Lee telling you about this
meeting?
Mr. Harlan Waksal. Yes, she did.
Mr. Greenwood. And were you aware of the FDA issues at this
point in time, what their concerns were?
Mr. Harlan Waksal. Yes. Dr. Lee articulated very clearly
the issues, the documentation questions that were being raised
by the FDA.
Mr. Greenwood. Weren't the nature of these issues--when did
that happen?
Mr. Harlan Waksal. We spoke many times, but December 4
was--you are referring to the December 4 meeting, so it was in
the afternoon on December 4.
Mr. Greenwood. Okay. Weren't the nature of these issues
such that it was obvious that whether FDA refused to file or
not, ImClone wasn't going to the February 2002 Advisory Panel?
Mr. Harlan Waksal. No, not at all. At the time, we felt
very confident about our ability to go ahead and address those
issues. In fact, we were putting into place a plan to go ahead
and make sure that we could address the FDA's concerns and
issues that were being raised and felt that indeed we could go
ahead and continue to move this drug forward.
Mr. Greenwood. And be ready for the February Advisory
Panel.
Mr. Harlan Waksal. Well, the preparation for any advisory
committee is not dependent on the company, it is dependent on
the FDA and their feeling that they are ready in fact to go
ahead and present it and move it forward. We don't really have
control over that. Obviously, it is always our hope to get it
to an advisory committee as quickly as possible.
Mr. Greenwood. December 4 was also an important date for
another reason. Wasn't that the date that ImClone filed the
rest of the single agent study?
Mr. Harlan Waksal. That is right. In fact, the real purpose
of the meeting, why the meeting took place, was we were
delivering the last portion of the package to the FDA, and that
was the final results, the final study report on the single
agent trial on 57 patients.
Mr. Greenwood. And were the results of the single agent
study a factor cited in the FDA refusal-to-file letter?
Mr. Harlan Waksal. Yes, it was.
Mr. Greenwood. According to public records, you gained
almost $50 million from a carry-forward stock transaction on
December 6, 2001; is that correct?
Mr. Harlan Waksal. That is correct.
Mr. Greenwood. This is the transaction you said in an
October 31, 2001 letter to the ImClone Board that you would
execute in 2 weeks, and on December 6, ImClone was trading near
its 52-week peak price. Dr. Waksal, did you not have important
non-public information about the status of the Erbitux
application when you executed the December 6 sale of ImClone
stock for almost $50 million?
Mr. Harlan Waksal. That is correct. There was no material
information, in my opinion, at the time. In fact, my
transaction was quite independent of everything else taking
place. That transaction was one that I defined and identified
months earlier, identified the board of directors on October
31, and these are complicated transactions, and it took until
the beginning of December for it to be finalized. Before the
December 4 meeting, I, in fact, had already transferred the
stock and had engaged in that effort, but the event on December
4 was not a material event. We didn't believe it would be----
Mr. Greenwood. But it was non-public.
Mr. Harlan Waksal. Pardon me?
Mr. Greenwood. It was not public, though.
Mr. Harlan Waksal. No, it was not public, but there was no
material information----
Mr. Greenwood. Your argument is that while it was non-
public, it was not material.
Mr. Harlan Waksal. That is correct, sir.
Mr. Greenwood. Okay. My time has expired. The Chair
recognizes the gentleman, Mr. Stupak, for 5 minutes.
Mr. Stupak. Thank you. Dr. Waksal, in August 2000, when you
met with the FDA, were you present at that meeting?
Mr. Harlan Waksal. I was.
Mr. Stupak. Okay. And who set up the protocol that you
would use to get this Fast Tracked?
Mr. Harlan Waksal. The protocol was set up by a variety of
people. We generally work with a group of oncology consultants,
the people who are going ahead and doing the trial, in
conjunction with our in-house people who are responsible for
writing it. It goes through review committees and we get
feedback till we get to the final form.
Mr. Stupak. But, basically, ImClone sets forth the
protocol.
Mr. Harlan Waksal. That is correct, ImClone is responsible
for the protocol.
Mr. Stupak. And that is what you were presenting to the FDA
in August of 2000 and hoped to get to Fast Track.
Mr. Harlan Waksal. That is right.
Mr. Stupak. And, actually, on January 12, 2001, you did
receive the Fast Track authority from FDA to proceed.
Mr. Harlan Waksal. That is correct.
Mr. Stupak. And there is some question as to what protocol
was being used, protocol No. 1 or protocol No. 2; is that
correct?
Mr. Harlan Waksal. That is not correct.
Mr. Stupak. Well, in the letter of January 19, from FDA,
where they laid it out for you what you were supposed to be
doing with the--and also that there would have to be a small
study of the single data, was that news to you or----
Mr. Harlan Waksal. Well, that was the first time that was
mentioned. But just to get back to the first question, the FDA
had both protocols, and it wasn't as if there were two
protocols.
Mr. Stupak. You presented two protocols in August 2000?
Mr. Harlan Waksal. We presented two protocols well before
August 2000.
Mr. Stupak. Okay.
Mr. Harlan Waksal. The protocol was amended, so it was
slightly modified, and the FDA had both protocols in their
hands while this study was underway, without any question, sir.
Mr. Stupak. But when you met with them in August 2000----
Mr. Harlan Waksal. Yes. We were talking about the
protocols----
Mr. Stupak. You had both protocols.
Mr. Harlan Waksal. Yes, the FDA had both protocols.
Mr. Stupak. And it was clear to everyone that there were
two protocols here and it is clear to everybody?
Mr. Harlan Waksal. There was never an issue or suggestion
that that was a problem in any way. The protocol modifications
were minor.
Mr. Stupak. They were minor?
Mr. Harlan Waksal. Yes, sir.
Mr. Stupak. Who sets the modifications of the protocol?
Mr. Harlan Waksal. It is usually done in conjunction--
again, ImClone sets them in conjunction with the oncologists
when they believe there is a change that is necessary in a
protocol.
Mr. Stupak. But Dr. Weiss had just testified that the
dosage and the amount of--and the time of receiving some of the
drugs, the----
Mr. Harlan Waksal. Irinotecan.
Mr. Stupak. [continuing] Irinotecan----
Mr. Harlan Waksal. Yes.
Mr. Stupak. [continuing] that was determined by the doctors
doing the testing on the patients, correct?
Mr. Harlan Waksal. Well, actually, the protocol set out
very clearly what should take place with Irinotecan treatment.
There were protocol deviations that took place where doctors
had gone ahead and made changes in that dose of Irinotecan,
primarily decreasing the amount of Irinotecan that was being
used in those patients. In a very few number of patients, very
few, it was increased. And in fact only one of those patients
has responded.
Mr. Stupak. But those modifications were fatal to your
application, were they not, one of the three reasons why your
application failed.
Mr. Harlan Waksal. I think the application failed for a
number of reasons, primarily documentation. But I think that
certainly the review----
Mr. Stupak. Wait a minute. Documentation? You had to have
had at least 100 people go through this thing. In the final
analysis, there is maybe 89 at best. That is not a
documentation issue, that is a fact issue that you didn't have
enough people in your small study. And when you have a small
study, as been testified earlier, it is critical that everyone
makes it through and you do not fall below that 100 number;
isn't that correct?
Mr. Harlan Waksal. That is not correct, and if I could----
Mr. Stupak. That is not correct? Dr. Weiss was wrong in his
testimony earlier today?
Mr. Harlan Waksal. I didn't hear Dr. Weiss' testimony, but
if I could just go ahead and comment on this.
Mr. Stupak. Sure. Well, I don't want you to filibuster an
answer, I just want an answer.
Mr. Harlan Waksal. I have no intention of filibustering.
Mr. Stupak. Okay.
Mr. Harlan Waksal. The study was 138 patients. One hundred
and twenty of those patients were considered refractory.
Mr. Stupak. Correct.
Mr. Harlan Waksal. The documentation is not on patients on
study, it has to do with patients before they came on to trial,
and in fact----
Mr. Stupak. Doctor, if it is just a matter of
documentation, just a matter of documentation and not the size
of study and not when dosage is, as you say, it is just
documentation, why haven't you provided the proper
documentation into the FDA and get this drug approved?
Mr. Harlan Waksal. We, at the time, didn't recognize that
there was a shortcoming in the documentation, and that was a
quality problem within our company, and it is something that I
have agreed was a problem. We have since gone out and have
collected with our partners as many scans as we can, collected
133 of the 138 patient scans. They haven't been reviewed yet.
We are waiting and talking to the agency, and it will be a
component, hopefully, of a resubmission in conjunction with
additional data.
Mr. Stupak. So you are still under the impression it is
just a documentation issue and that is all it is. And once that
documentation is provided, you expect to get your approval?
Mr. Harlan Waksal. In no way am I trivializing the
importance of this documentation. It is critical to the study
and its integrity. And not only is that important but the other
issues that you have raised are important as well. But the real
issue is the question of whether or not these are major or
minor deviations or protocol problems. And for the most part,
our review continues to establish that the vast majority are
not major protocol problems and in fact the study hopefully
will continue to be in tact once we reevaluate it. That has not
taken place yet. But it is more than documentation, without a
question.
Mr. Stupak. You know, some of the documents we have here
indicating that three prominent oncologists say, and let me
quote, ``Overall, this is a protocol,'' NCR protocol, right?
Mr. Harlan Waksal. Yes, sir.
Mr. Stupak. ``That asks the wrong questions and then is not
tightly written and efficient. The protocol generates far more
questions than it could ever answer. It is a blueprint for
production of vague answers.''
Mr. Harlan Waksal. I believe you are reading from the
Cancer Letter, three clinicians who reviewed the protocol, who
were not involved with the study or the study design. I think
what is very critical in this study was----
Mr. Stupak. So your answer is only those doctors who were
involved in the study can answer or review your BLA?
Mr. Harlan Waksal. No, not at all. No. I believe the
importance of how we got to this place is very critical, and
unfortunately those physicians weren't involved in that
process. What is critical is that this study was not designed
as a registration trial. It was a Phase II study early on in
the development of this drug. It was only because of the
unexpected results that we were able to go ahead and move it
forward, sir.
Mr. Stupak. It is no longer a Phase II study. You are
asking for accelerated Fast Track to put it out to the general
population. You are past Phase II. We call it Phase III, and
Phase IV is when you put it out in the real world. Therefore,
if it is only Phase II, you still had two more phases to go
through if you went through the regular process.
Mr. Harlan Waksal. Actually, it was Congress who stipulated
in Fast Track designation----
Mr. Stupak. That is true.
Mr. Harlan Waksal. [continuing] that studies exactly like
this could be designated to be moved forward toward approval.
Mr. Stupak. Exactly.
Mr. Harlan Waksal. Phase II studies, sir.
Mr. Stupak. And Congress also said that if you are going to
do a Fast Track legislation, it has to be tightly controlled,
tightly regulated, and you must follow the regimen to a tee;
otherwise, we are not going to allow it.
Mr. Harlan Waksal. And we have agreed that there were
problems in the protocol.
Mr. Greenwood. Time of the gentleman has expired. The Chair
recognizes the chairman of the full committee, Mr. Tauzin, for
inquiry.
Chairman Tauzin. Thank you, Mr. Chairman. Gentlemen, let me
take you back to December 20. Are you aware of the fact that
the FDA called both ImClone and I think Bristol-Myers Squibb on
that date to say, ``The decision has been made. Don't call us,
don't bother us anymore. We will announce the decision on
December 28.'' Is that correct?
Mr. Harlan Waksal. Well, Congressman, what took place is we
actually had called the FDA to find out what the status was,
and we were informed at the time that a decision had been made
and that it would be coming sometime the next week, right.
Chairman Tauzin. Is that correct, Mr. Markison?
Mr. Markison. That is correct.
Chairman Tauzin. Turn your mike on please, sir. Is that
correct?
Mr. Markison. Yes, that is correct.
Chairman Tauzin. Did you get a call from FDA saying,
``Don't call, don't bother us anymore. We are going to have the
decision--it is already made, we will announce it next week on
the 28th.''
Mr. Markison. Was that question directed to me or Dr.
Waksal?
Chairman Tauzin. Yes, sir. Directed to you, sir.
Mr. Markison. I never received a call from the FDA.
Chairman Tauzin. Did you know that FDA had called ImClone?
Mr. Markison. I was aware of the teleconference that Dr.
Waksal referred to. And I was aware subsequently of a dialog
around that within both companies, and we acknowledged the
fact----
Chairman Tauzin. All right.
Mr. Markison. [continuing] that that was a very difficult
call.
Chairman Tauzin. Now, on December 21, Christmas day, you
tracked Dr. Waksal down to talk to him. Where did you find him?
Mr. Markison. Well, sir, first I must apologize to the
chairman as well, I am also represented by counsel. I wasn't
asked to point that out. I feel that I should point that out.
Mr. Greenwood. Please identify your counsel.
Mr. Markison. Mr. Hamilton, behind me.
Mr. Greenwood. All right. Say his name clearly in the
microphone, please. State his name.
Mr. Markison. Mr. James Hamilton.
Mr. Greenwood. Okay.
Mr. Markison. The only reason I didn't offer his name, I
wasn't asked previously, sir.
Mr. Greenwood. Fair enough.
Chairman Tauzin. All right. We got your counsel on the
record. Now, let us see if we can get the question answered.
The question is on December 25 you apparently tracked down Dr.
Waksal by phone to have a conversation with him, Christmas Day,
December 25. Where did you find him?
Mr. Markison. I was able to reach Dr. Waksal at his house
in Telluride.
Chairman Tauzin. That is in Colorado?
Mr. Markison. I believe so, yes.
Chairman Tauzin. So what was the purpose, why were you
calling him on Christmas Day at his house in Colorado?
Mr. Markison. The reason I called Dr. Waksal was because on
Christmas Eve I had heard from outside counsel to BMS, Mr.
Allan Bennett, that through a contact at the FDA we had heard
that a refusal-to-file letter was a distinct possibility. And
then I tried to reach Dr. Waksal that evening, called his home,
but did not leave a message on his machine and then called him
on Christmas Day to relay that information.
Chairman Tauzin. All right. Now, Dr. Waksal, you tried to
reach your brother the next morning, you called him three
times, I think, starting at 6:30 a.m.; is that correct?
Mr. Harlan Waksal. In fact, I called many members of
ImClone senior management, including Sam. I was unable to reach
him.
Chairman Tauzin. Where was he?
Mr. Harlan Waksal. I believe he was somewhere--he was on
vacation down in the Caribbean. I don't know----
Chairman Tauzin. St. Barts, you think.
Mr. Harlan Waksal. That may be correct.
Chairman Tauzin. And why were you trying to call him?
Mr. Harlan Waksal. I had just heard from our colleagues at
Bristol-Myers that we had a refusal--a high potential, a high
likelihood of receiving a refusal-to-file, and I was calling
all the senior members of management to participate in a
conference call that was scheduled for 10 a.m. eastern time
where we could discuss our options.
Chairman Tauzin. Now, for the record, both of you are
testifying that the most you got from this contact with a
consultant who had a contact with somebody at FDA that a
refusal-to-file letter was probable, likely? What did you hear
exactly, Mr. Markison?
Mr. Markison. I had a dialog with Mr. Bennett where he
described that a refusal-to-file letter was probabilistic,
highly probable. And then, subsequently, in an e-mail to me, he
did point out, in no uncertain terms, that a refusal-to-file
letter would be coming.
Chairman Tauzin. No, no, wait a minute. So when did you get
that e-mail?
Mr. Markison. On Christmas Eve.
Chairman Tauzin. So before you called Dr. Waksal, you
already had an e-mail saying that a refusal-to-file is coming
definitely.
Mr. Markison. Yes, sir.
Chairman Tauzin. Did you convey that information to Dr.
Waksal on Christmas Day?
Mr. Markison. I conveyed the information that was in the e-
mail and also my subsequent dialog with Mr. Bennett that it
appeared a refusal-to-letter was coming.
Chairman Tauzin. Now, Dr. Waksal, you just said you were
conveying the message to everyone that that was a problem. Are
you telling us that you did not convey to your officers and
directors and try to convey to your brother the fact that an e-
mail had been received saying one was definitely coming?
Mr. Harlan Waksal. No, I didn't say that at all. I was----
Chairman Tauzin. Tell me what you did convey.
Mr. Harlan Waksal. I was very clear. I relayed the
conversation I had with Mr. Markison to the team. I asked them
all to participate so that we could hear directly from the
people involved what was going to take place, and in fact we
had that telephone conference call with all parties at 10 a.m.
on the 26th.
Chairman Tauzin. On the 26th.
Mr. Harlan Waksal. That is correct.
Chairman Tauzin. So that by the 25th you all knew that in
fact a letter, the refusal-to-file decision had been made and
it was going to be announced; is that right?
Mr. Harlan Waksal. Actually, I don't know who knew on
Bristol's side. I was the only person who knew on the 25th, and
I did not contact anyone on the 25th of December. I didn't feel
it was appropriate to wreck Christmas for the people at the
company.
Chairman Tauzin. Now, I have got in my hands a document
marked, ``Confidential treatment requested by ImClone Systems,
Inc.'' We are going to make a copy available to you, Dr.
Waksal.
Mr. Harlan Waksal. Thank you.
Chairman Tauzin. It is a series of memos, handwritten
memos. We don't know who wrote it, but the date on top, if you
will follow it, is December 27, 2001; is that correct?
Mr. Harlan Waksal. That is correct, sir.
Chairman Tauzin. Would you read the second item for us?
Mr. Harlan Waksal. ``A rejection letter will include
points: study size small, truly refractory, data base flawed.''
Chairman Tauzin. So that at least by the 27th you all knew
not only that a rejection letter was coming, but you knew
exactly what the points of rejection would be; is that correct?
Mr. Harlan Waksal. What we knew is what is written here.
What was relayed to us was that there are both--there are
review issues, and these were the possible review issues that
we were going to see in that letter; yes, sir.
Chairman Tauzin. Where did you get that information?
Mr. Harlan Waksal. I believe that was part of our
conference call dialog on the 26th and possibly on the 27th.
Mr. Markison. Mr. Markison, was that information relayed to
you in that e-mail as well, not only that the rejection letter
was coming, but it was coming for the following reasons?
Mr. Markison. No, sir, it was not.
Chairman Tauzin. Do we have a copy of that e-mail that you
received?
Mr. Markison. You should have it, yes.
Chairman Tauzin. All right. I would like to turn to the
second page, Dr. Waksal. The first item says, ``No press
release by BMS.'' The second item interests me, ``Brian
understands that Sam and Harlan are calling FDA to try to stop
RTF. Our press release should be as vague as possible. A
question, do we need to do anything at all?'' Is that correct?
Did you and your brother begin calling FDA to try to stop the
RTF at that point?
Mr. Harlan Waksal. Not entirely. We were having discussions
to try to decide how to move forward and what to do. I think I
mentioned earlier one of the things we decided to do was to put
a letter together to the FDA to try to go ahead and stop the
RTF from coming. I did not call the FDA. As you mentioned, we
were not able--we were asked not to contact them. I do know
that Sam Waksal did try to contact the FDA.
Chairman Tauzin. What is confusing about these documents is
that in press releases you and your brother, either one of you,
both of you have said that you were shocked on the 28th to find
out that the RTF came down. You were shocked, utterly, to find
out that the agency would reject filing. And yet these
documents indicate that you knew at least on the 27th and your
testimony is that Mr. Markison advised you on the 25th that the
rejection letter was coming. Why would you say publicly on the
28th that you were shocked?
Mr. Harlan Waksal. Well, I was shocked, sir. When I
received the RTF letter, the tone, the content was a big
surprise. We were surprised at the number of issues that were
raised and the deficits that were noted in the RTF letter.
Chairman Tauzin. But you had to know it was coming. You
just testified you knew it was coming.
Mr. Harlan Waksal. I knew that it----
Chairman Tauzin. And you knew why it was coming.
Mr. Harlan Waksal. I felt very certain that an RTF--no,
these were issues--these were some of the issues, but we didn't
have the extent of which were reviewed and which were going to
be refusal to file issues.
Chairman Tauzin. I want to go back if I have just a minute,
Mr. Chairman, to that date when--in August of 2000.
Mr. Harlan Waksal. Yes, sir.
Chairman Tauzin. When ImClone and FDA met to discuss a
possible accelerated approval strategy. Our investigators tell
us that very clearly FDA relied upon the wrong version of the
9923 protocol. And then they tell us that ImClone did not
correct the FDA's mistake. We further learned from the senior
FDA official who overruled the medical reviewer handling the
case that she believes she was misled by ImClone about its
claim that a human clinical trial showed no single agent
activity. We have two instances here where, one, the FDA relied
upon a wrong version and our investigators tell us that no one
at ImClone corrected the FDA's mistake. Did you know in August
of 11, 2000 when FDA made the decision to rely upon the wrong
version of the protocol that they were making a mistake?
Mr. Harlan Waksal. First of all, the FDA had both versions
of the protocol prior to our meeting on August 2000, and indeed
we assumed, and I still believe, that the FDA was fully aware
of what those protocols are. It is a surprise to me that it is
suggested that we were somehow trying to fool them into
thinking we were working under Version 1.0 versus Version 2.0.
There would be no reason for us to----
Chairman Tauzin. Well, clearly, they made a mistake, but
our investigators said it was within your power to correct the
FDA mistake in August 11, 2000. Why wouldn't you, for the sake
of getting this drug approved more quickly and correctly, have
corrected the FDA's mistake on that date?
Mr. Harlan Waksal. We would have absolutely corrected the
mistake had we known about it. The first I have heard about
this issue of Version 1.0/Version 2.0, sir, is here.
Chairman Tauzin. We were also told, however, by the FDA
official who overruled the local review, that they believe they
were misled by ImClone about the claim that a human clinical
trial showed no single agent activity. Do you deny that?
Mr. Harlan Waksal. Yes, absolutely deny that. We were very
clear with the FDA that the best way to use this drug, based on
the information we had in animal studies and even in the single
human study that we had engaged in, did not show major single
agent activity, that it is primarily a cytostatic drug. The
only study that was performed in humans was the study we did in
renal cell cancer, and we articulated those results, albeit in
a different tumor type.
Chairman Tauzin. I am looking at the protocols----
Mr. Harlan Waksal. Yes, sir.
Chairman Tauzin. [continuing] that are in dispute here. And
staff is pointing out to me, and I am trying--I am getting this
correctly, that the protocol, the original version, says that
following two courses of Irinotecan, patients' tumors were
measured and based on the results. Was there a change in that
protocol?
Mr. Harlan Waksal. Yes. Medical practice doesn't allow
doctors to continue patients on a drug if they have new lesions
or progression. So the doctors, in conjunction with the
company, made a modification to the protocol to allow patients
who were failing the drug to be on the protocol in combination
with 225, or Erbitux.
Chairman Tauzin. Well, I am looking at the minutes of the
meetings with the FDA.
Mr. Harlan Waksal. Yes.
Chairman Tauzin. A meeting on August 11. And they are
saying that in fact this is the original version and that it
was changed later and that that is what they relied upon in
literally making the decision to overrule the medical reviewer
and to approve this protocol. Do you deny that?
Mr. Harlan Waksal. I am not aware of any of that. I am
aware of the fact that both protocols have been submitted to
the FDA, and I felt that both protocols----
Chairman Tauzin. We were told that you saw these minutes,
did you not?
Mr. Harlan Waksal. The minutes to----
Chairman Tauzin. To the meeting.
Mr. Harlan Waksal. Yes, I have seen the minutes to the
meeting. I would like to see them again. I am not quite sure
which part you are referring to.
Chairman Tauzin. Well, we will come back to it. We will get
you copies and I will ask the chairman to give me a unanimous
consent to come back to it in a minute. I want you to see it as
we discuss it.
Mr. Harlan Waksal. I would appreciate it, Congressman
Tauzin.
Mr. Greenwood. The Chair thanks the gentleman. The Chair
recognizes the gentlelady from Colorado for 5 minutes.
Ms. DeGette. Thank you, Mr. Chairman. Dr. Waksal, it is
your view that the problem with this Erbitux application is
irregular paperwork, right, in essence?
Mr. Harlan Waksal. Well, that is one of the major problems,
and I think----
Ms. DeGette. Well, what are the other major problems?
Mr. Harlan Waksal. I think it was pointed out very
carefully, when you have a problem in documentation, it affects
the entire study.
Ms. DeGette. So, in essence, it is documentation, right?
Yes or no.
Mr. Harlan Waksal. Yes.
Ms. DeGette. Okay.
Mr. Harlan Waksal. But there are other issues as well.
Ms. DeGette. Okay. What are the other issues----
Mr. Harlan Waksal. Well, the----
Ms. DeGette. [continuing] unrelated to documentation?
Mr. Harlan Waksal. The other issues that need to be
resolved are the protocol violations that took place as well.
Ms. DeGette. And those are serious problems too, right?
Mr. Harlan Waksal. Every clinical study has protocol
violations--every study.
Ms. DeGette. Right.
Mr. Harlan Waksal. The real question is whether the
protocol violations affect the integrity of the trial.
Ms. DeGette. Okay. Sir, I apologize, they only give me 5
minutes.
Mr. Harlan Waksal. I understand.
Ms. DeGette. And so with respect to the documentation, now
have you--you have had 6 months since you heard about this,
roughly.
Mr. Harlan Waksal. That is correct.
Ms. DeGette. Have you fixed the documentation problems?
Mr. Harlan Waksal. What we have done--we can't just fix the
problems, we have to fix the problems the right way.
Ms. DeGette. Okay. So the answer would be no.
Mr. Harlan Waksal. No, that is not----
Ms. DeGette. In 6 months you have not.
Mr. Harlan Waksal. [continuing] really the answer. The
answer is what we have done is we have gone down the process
and started discussions with the FDA to make sure----
Ms. DeGette. The answer is--Okay. I am sorry, I only have 5
minutes. The answer is you have not fixed the documentation
problems. Your view is you are working on it, right?
Mr. Harlan Waksal. That is right.
Ms. DeGette. When do you think they will be fixed?
Mr. Harlan Waksal. I can't give you that answer.
Ms. DeGette. Okay. Now, the other problem, that is a harder
problem just to fix than documentation; is that right?
Mr. Harlan Waksal. Which one is that?
Ms. DeGette. The problem of the irregularities, the
protocol violations.
Mr. Harlan Waksal. No. We believe that the vast majority of
these, the vast majority don't affect the ability to evaluate
this study and program.
Ms. DeGette. So how are you working to fix that problem?
Mr. Harlan Waksal. The same way. We are going through,
making sure we can identify which of these violations have any
impact on the ability to interpret the data and we are doing it
patient-by-patient, making sure that can indeed, at the end of
the day, have an intact trial.
Ms. DeGette. When do you expect to have all of that data to
the FDA?
Mr. Harlan Waksal. Well, what we are doing is that is an
analysis plan.
Ms. DeGette. So you don't have a firm time when you expect
to have that.
Mr. Harlan Waksal. Until we have guidance from the FDA, we
cannot give you a time on that.
Ms. DeGette. So it is their fault?
Mr. Harlan Waksal. No, it is not.
Ms. DeGette. Okay.
Mr. Harlan Waksal. It is something that is being done in
conjunction with them.
Ms. DeGette. All right.
Mr. Harlan Waksal. It is not something we can do alone.
Ms. DeGette. Okay. I mean I hope--I frankly hope Erbitux
works too. There are not very many drugs for colorectal cancer.
Mr. Harlan Waksal. I completely agree with you.
Ms. DeGette. And I understand that. But here is the thing:
The reason Congress approved this Fast Track procedure is so
that we could get drugs that we think that would work in very
serious patients.
Mr. Harlan Waksal. That is right.
Ms. DeGette. And if we don't have any protocols at all or
if we have very bad protocols, for all we know people may be
applying for laying out a hand, and I don't think that is any
of our goals here.
Let me talk to you, Dr. Smaldone, for a minute. Now, you
say that the reason to have Erbitux approved is to get these
patients who know they are dying more time, more time with
their families, more time to get their affairs in order, right?
Ms. Smaldone. That is correct.
Ms. DeGette. But are you aware that neither the 9923 or the
0141, the smaller trial, have measured life extension but
rather they have measured tumor shrinkage?
Ms. Smaldone. I am very well aware of that.
Ms. DeGette. So in fact we don't know whether or not life
extension is one of the benefits of this drug at this point, do
we?
Ms. Smaldone. That is absolutely correct. That is----
Ms. DeGette. Thank you. Now, I was really touched by the
patient that you talked about, and this is all about the
patients, Michael Ann Mullinix. I am glad that her cancer seems
to be gone. But I think we should be clear, as far as we know,
she is the only patient who has had this result from this drug.
Wouldn't that be fair to say?
Ms. Smaldone. That is not the way I would put it.
Ms. DeGette. You know other patients who have had this same
result?
Ms. Smaldone. I would like to go back to our own analysis
of--a reanalysis of 9923 that we conducted during the due
diligence, which was done with yet another independent review
group outside radiologists evaluating the scans. And----
Ms. DeGette. And they say that other patients have been
cured aside from this one patient?
Ms. Smaldone. There are other patients who have responded.
And at the worst case of that particular----
Ms. DeGette. But none of them have had the cancer go away.
They have had the tumor shrink, right?
Ms. Smaldone. We cannot comment on cure at this point in
time; it is way too early. These are response rates, which----
Ms. DeGette. And that is even true with Michael Ann
Mullinix, isn't it?
Ms. Smaldone. At this point in time, that is true, it is a
response.
Ms. DeGette. Thank you. Okay. I have a couple of other
questions. Now----
Mr. Greenwood. The Chair will be lenient with the time.
Ms. DeGette. Oh, I am sorry.
Mr. Greenwood. The Chair also would note that we are going
to two rounds with this panel.
Ms. DeGette. Thank you. Thank you, Mr. Chairman.
Mr. Greenwood. The Chair recognizes the gentleman from
Kentucky, Mr. Fletcher, for 5 minutes.
Mr. Fletcher. Thank you, Mr. Chairman. Let me first ask Dr.
Waksal some questions. You started when the initial protocol or
the initial treatment protocols were enacted at some of the
cancer centers, you mentioned Sloan-Kettering as one, a very
well-respected cancer center, started reporting back that the
results seemed very positive. Is that--how is that documented?
Is that just kind of what we used to call hallway discussions,
when you are on rounds and things are going very well?
Mr. Harlan Waksal. Very much so. We were getting case
reports--we were getting information back that was written,
data was starting to come in, a lot of it was discussions with
the doctors at these various institutions around the country.
There were about 20-some different centers who were using the
drug in this trial. A lot of it I think you could characterize
it as hallway type of, anecdotal type of discussions, sir.
Mr. Fletcher. Do you have documentation of that from
reputable oncologists that participate in these protocols that
from their experience say that, yes, in fact this drug seems to
be effective, people who have had experience in a number of
protocols and wouldn't say that without adequate experience?
Mr. Harlan Waksal. I think every one of the physicians who
were involved in our trial, every one of them, are very
reputable, and----
Mr. Fletcher. Do you have documentation, written
documentation, memos, et cetera, coming from those in the early
parts of these trials?
Mr. Harlan Waksal. We have better than that. We have their
case report forms. We actually have the documentation of the
effects it was having in their patients, the fact that they
were seeing shrinkage. And that is documentation that forms the
basis for what we did.
Mr. Fletcher. So these are early reports that are made
throughout the protocol of the effectiveness.
Mr. Harlan Waksal. Exactly. That is right.
Mr. Fletcher. Let me go on. There appears substantial
failures, or Dr. Weiss mentioned 20-some percent of those that
were enrolled should have been ineligible, at least that was
the number that I recall him giving. Now, apparently, you
acknowledged there was some failure in following the
eligibility criteria. Is that correct or not?
Mr. Harlan Waksal. Yes, I do, sir.
Mr. Fletcher. And you have said that that happens or at
least problems happen in all or most protocols.
Mr. Harlan Waksal. Yes. And if I could elaborate, I will
give an example. The major protocol deviation that took place
was for patients who had an abnormal liver test that was done,
and doctors will also use their judgment to decide if an
abnormal liver test put the patient at any increased risk. The
doctors would go ahead and put patients on this trial in spite
of that, and in fact it was their decision that it wasn't a
risk to these individuals.
Mr. Fletcher. So these very well-respected clinicians would
enter someone in the trial that was not eligible because of
elevated liver function test which was part of the protocol. I
mean they had to have normal liver function tests, I assume.
Mr. Harlan Waksal. Yes.
Mr. Fletcher. Do you think that was because of the optimism
that they saw in the response in patients that were looking for
some sort of treatment? Why would that occur if they knew that
it may possibly prevent this from being approved through the
FDA?
Mr. Harlan Waksal. I don't think that was part of their
consideration. It was their clinical judgment that these
patients were not being put at any type of risk by enrolling
them in the study, and----
Mr. Fletcher. But aren't they under sort of obligation to
follow the protocol? Isn't it not approved for those patients
to be on this under the FDA guidelines of this protocol if they
do not meet the criteria?
Mr. Harlan Waksal. There is no question. These doctors
don't have the protocol in their hands as they go ahead and
make the decisions at times.
Mr. Fletcher. Is that normal that physicians are not fully
familiar with the protocol when they are using it?
Mr. Harlan Waksal. They are familiar with the protocol,
but, as I said, mistakes happen in every study regardless of
what that study is.
Mr. Fletcher. I am just trying to get to the basis of why
there seemed to be an excessive amount of failure in meeting
the protocol in this study compared to other studies. Any
answer to that?
Mr. Harlan Waksal. I can. I think that the most important
issue with this trial is that it was never initiated as a
registration study, it was a Phase II study.
Mr. Fletcher. Well, the Phase II, but also the Fast Track
aspect, do you think that influenced it?
Mr. Harlan Waksal. No. It actually--it wasn't planned for
Fast Track until after we had the data. It was really the fact
that we had such robust responses in patients that led us to go
ahead and move this drug forward. So it was the positive data
that indeed stimulated our desire to move this forward.
Mr. Fletcher. Thank you, Dr. Waksal. Let me ask Dr.
Smaldone a question. Given the fact that your company obviously
being one of the leading providers for oncology therapies has
been through the FDA process multiple times, you have a
tremendous--much greater experience than ImClone has, in your
experience, in looking over what happened here, do you think
this is an FDA failure or is it a failure on ImClone's part to
not follow the protocol and not adequately communicate with FDA
what they are doing?
Ms. Smaldone. I can't answer that directly, but I would
like to provide you my perspective that hopefully can give
you----
Mr. Fletcher. If you can do that briefly, we would
appreciate it.
Ms. Smaldone. I will try to give you some perspective here.
I think as we came into this picture, what we saw before us was
a product that had a substantial pre-clinical profile that was
very exciting, very strong potential for what it may be able to
do in terms of inhibiting this particular receptor. There was
data that was conducted by reputable oncologists, already
presented to ASCO, which is a premier Scientific Congress for
Oncology, that validated our understanding of the data. ImClone
Systems was in very advanced discussions with the FDA, was
already in Fast Track, already with a rolling BLA submission
process underway, and the BLA responsibilities, the
responsibility of ImClone.
And as we went through all of this, as well as very
extensive due diligence, from our perspective, what we saw was
a promising anti-tumor agent, there were issues, in fact issues
that you have before you that were raised that were both
scientific and regulatory issues. But from our perspective, in
conversations with ImClone, it seemed that these were issues
that were under discussion with the FDA and that people seemed
to be at least aware of them.
Mr. Fletcher. So let me say, given this perspective--and my
time has expired, so let me just finish with this--is this an
FDA Fast Track procedural problem or is this an ImClone
problem?
Ms. Smaldone. I believe that what we saw was an FDA Fast
Track that appeared to, in a sense, that was a validator that
the protocol and the data that was coming forward was
appropriate, because we didn't have any reason to believe
otherwise. We were not in direct contact with the FDA.
Everything was happening through ImClone Systems.
Mr. Fletcher. A company doesn't invest that much money
without probably substantial oversight with the experience you
have. Back to it, FDA problem, ImClone or both? What do you
think?
Ms. Smaldone. I really can't comment specifically.
Mr. Fletcher. Okay. Thank you. My time has expired.
Mr. Greenwood. The Chair thanks the gentleman. The Chair
recognizes the gentleman from Florida for 5 minutes. And before
doing so would inform the committee that after Mr. Stearns'
inquiry we will then recess for the series of votes until 2:30.
Mr. Stearns. Thank you, Mr. Chairman. Dr. Waksal, you had
indicated when the chairman was talking to you that if the
information was not public, you didn't think it was material. I
think that is what you said or did you not, sir?
Mr. Harlan Waksal. No, I did not say that. I said that----
Mr. Stearns. Do you remember what you said?
Mr. Harlan Waksal. Yes. We didn't have material or public
information at the time. There was not material information to
disclose to the public, sir.
Mr. Stearns. Okay. And so when Dr. Lee, at least we
understand that Dr. Lee heard from the FDA about the
possibility of this refusal-to-file letter. You are saying you
did not know from her whether this was fact or not or she told
you and you knew?
Mr. Harlan Waksal. The conversation is similar to someone
driving down the street and coming to a stop light.
Mr. Stearns. Okay.
Mr. Harlan Waksal. Red, yellow or green.
Mr. Stearns. Right.
Mr. Harlan Waksal. And it was not a conjecture of what----
Mr. Stearns. No, I understand. But you had the impression
that there could be a refusal-to-file letter from the FDA after
talking to Dr. Lee on December 4; is that possible?
Mr. Harlan Waksal. No, I did not.
Mr. Stearns. Okay. Did you have any inkling at all?
Mr. Harlan Waksal. No, I did not have any inkling until
after December 12, sir.
Mr. Stearns. Okay. Dr. Smaldone, you have indicated that
this drug has great possibilities, and you have indicated a
women has taken it and has been successful. That was your
testimony.
Ms. Smaldone. Thus far, yes.
Mr. Stearns. Thus far.
Ms. Smaldone. Yes.
Mr. Stearns. So your company, the impression of you and the
executives of Bristol-Myers is that this drug someday will be
available and will be effective; is that true?
Ms. Smaldone. That is correct. The assessment of our
company was, and continues to be to this day, that this drug
has promise and has activity as an anti-tumor agent. And in
fact we have a number of dedicated personnel, probably over 50
people, that continue to work on it across the company.
Mr. Stearns. I understand. Did you see the ``60 Minutes''
CBS story about it?
Ms. Smaldone. I did not.
Mr. Stearns. Did you read the Business Week story about it?
Ms. Smaldone. I did not.
Mr. Stearns. Okay. Mr. Markison, did you see the ``60
Minutes'' story?
Mr. Markison. No, sir; I did not.
Mr. Stearns. Okay. And Dr. Waksal, did you see the ``60
Minutes'' story?
Mr. Harlan Waksal. Yes. It was a story we did not
participate in, sir.
Mr. Stearns. Did you think it was hyped or was it accurate?
Mr. Harlan Waksal. The story was about compassionate use of
the drug, and it highlighted two families, one that received it
and one that did not.
Mr. Stearns. Well, the claims that the story indicated by
inference, did you think they were exaggerated or were they
accurate?
Mr. Harlan Waksal. You would have to remind me about
specifics. I looked at the story as a very negative one for the
company, sir.
Mr. Stearns. You did.
Mr. Harlan Waksal. Yes, sir.
Mr. Stearns. Okay. In 1999 and the year 2000, during
ImClone's annual shareholders meeting, they were asked to
approve the right for yourself and your brother Sam to acquire
millions of stock options to exercise at certain prices to
acquire ImClone common stock in the future; is that correct?
Mr. Harlan Waksal. That is correct.
Mr. Stearns. And why was that done?
Mr. Harlan Waksal. We had been building the company,
invested--well, I can speak for myself, I have invested 18
years of my life in building this company from the ground up,
and I believe the stock options are reflective of the effort
and the time and the hard work that I have done over this
course of time.
Mr. Stearns. And how much total did you have in stock
options at that point, approximately, just approximately?
Mr. Harlan Waksal. I can tell you where I ended up at the
end of the day, just so you know.
Mr. Stearns. Okay.
Mr. Harlan Waksal. In terms of stock option, 2 million
shares as of 2001, and warrants of 500,000.
Mr. Stearns. Okay. And at the height of the market, so they
would be worth, what, $100 million?
Mr. Harlan Waksal. They would be worth at the height of the
market? That didn't include my shares as well. I had a total of
3.6 million shares.
Mr. Stearns. Okay.
Mr. Harlan Waksal. So at the height of the market, $210
million.
Mr. Stearns. $210 million.
Mr. Harlan Waksal. That is correct.
Mr. Stearns. Okay. On December 6, it shows you disposed of
700,000 shares, valued at roughly $75 for $50 million.
Mr. Harlan Waksal. That is partly correct. I didn't dispose
of them. I did not sell shares. What I did I entered into a
pre-pay which allowed me voting rights on those shares and the
upside potential of those shares, and it was part of a plan
that I had had for months and months to go ahead and not only
diversify but pay the taxes I owed on stock options that I had
gone ahead and purchased as well as a result of the Bristol
transaction.
Mr. Stearns. Did you execute the trade so that you actually
received $50 million?
Mr. Harlan Waksal. Actually, $44 million.
Mr. Stearns. $44 million. Okay. Did the company loan you
money to do this?
Mr. Harlan Waksal. No, it did not.
Mr. Stearns. Okay. So you just based it then on a
transaction put or call so that you wouldn't have to have a
loan then or you had the money?
Mr. Harlan Waksal. No. That was--I believe you are mixing
up a couple transactions.
Mr. Stearns. I probably am.
Mr. Harlan Waksal. Yes. And if I could help with this, I
wouldn't mind, sir.
Mr. Stearns. Oh, sure. You can help me with this.
Mr. Harlan Waksal. In July--well, in January of 2001, I
purchased my warrants, 500,000 shares. Again, a strong vote of
confidence on my part about the company and where it was going.
In July of 2001, I purchased a little bit over two million
shares. It was trading at around $42 a share, and I am sure you
are aware that when you purchase stock options, you need to pay
taxes on that.
Mr. Stearns. Oh, yes.
Mr. Harlan Waksal. And it was for those shares that I
received a loan from the company at prime interest plus 1
percent. Subsequently, I also engaged in the Bristol-Myers
tender offer that took place and sold stock into that, and that
paid for the loan I had taken from the company, the stock I
had--the taxes on the stock I had purchased, the stock options.
And, subsequently, I had another tax that I needed to pay on
the monies that I had gained from Bristol Myers, since I didn't
have any cash other than what was going to pay for the stock
and go to taxes, sir.
Mr. Stearns. Okay. I will just conclude because my time is
up and we have to vote.
Mr. Harlan Waksal. No problem.
Mr. Stearns. I mean it seems to me you are intimately aware
of the money that you are going on your stock options and how
you are going to buy it. Yet the 9923 protocol that your
company prepared and when we asked Dr. Weiss earlier about it,
he said there were three serious problems with this: Patient
eligibility criteria was not strictly defined, he talked about
changing the dose and administration frequency, and he also
said that the whole thing was such that you get so many vague
answers. And we have a prominent oncologist who said that the
overall protocol that was asked, that was created by your
company, was not tightly written and efficient. The protocol
generated far more questions than could be answered. It was
just a production for vague answers. Yet it seems like you
understood intimately all this about your own money, but the
actual protocol that your company developed seemed to be vague
and prominent oncologists say that it wasn't a good criteria.
And then the FDA asked you to come back because the clinical
procedures, you didn't even complete the application, and you
admit in your opening statement that the application had flaws
to it.
So I am just a little puzzled why you seem to be so
knowledgeable on everything about your warrants and about your
own money, yet when it comes to actually applying to the FDA
for the proper clinical procedures, you didn't get the full
information in. And in developing the 9923 protocol, you missed
out in terms of the criteria. Does that make sense?
Mr. Harlan Waksal. Well, I think your confluence of
information is----
Mr. Stearns. Interesting interpretation.
Mr. Harlan Waksal. [continuing] a little questionable. I
don't really see the point that we were not paying attention.
We were indeed. It happens to be that I differ on some of the
opinions you have raised about----
Mr. Stearns. You would agree you were paying attention with
your own money, though.
Mr. Harlan Waksal. Well, I was paying attention to the
company.
Mr. Stearns. Your warrants and all your options, yes. Thank
you, Mr. Chairman.
Mr. Greenwood. The time of the gentleman has expired. The
Chair would note that there is 1 minute and 14 seconds before
this vote closes. The committee will recess until 2:30 with
apologies to the witnesses.
[Brief recess.]
Mr. Greenwood. The Subcommittee will come to order. The
Chair thanks the witnesses for their forbearance. We do not
expect any more interruptions today. And the Chair recognizes
the chairman of the full committee, Mr. Tauzin, for inquiry.
Chairman Tauzin. I thank you, Mr. Chairman. I believe we
have copies now, Dr. Waksal, of the documents that I was
referring to. Do you have those copies?
Mr. Harlan Waksal. Yes, I do.
Chairman Tauzin. Let me make sure that you have them now,
and will the staff make sure that he has them. What I would
like to have you have in your possession is the copy of the
minutes that you have indicated that you had reviewed, and a
copy of the January 12 letter from the Department of Health and
Human Services to ImClone approving the fast track designation.
Staff, would you make sure that those copies are available
to the witness. While we are doing that, let me ask you a
couple of questions and then we will get you those copies. Do
you know whose handwriting these notes are in? Could you help
me with that?
Mr. Harlan Waksal. Yes, I do. They are notes taken by my
chief financial officer, Dan Lunch.
Chairman Tauzin. Okay. So all three of these pages are
taken by him?
Mr. Harlan Waksal. I believe so, sir.
Chairman Tauzin. And I see a snake at the bottom of page
three I take it?
Mr. Harlan Waksal. Excuse me?
Chairman Tauzin. There is a snake on the bottom of page
three, I thought. I thought it would be a pretty identifiable
little scribble, and it is his work; is that correct?
Mr. Harlan Waksal. I don't know about his art work, sir.
Chairman Tauzin. But it is his handwriting?
Mr. Harlan Waksal. But it is his handwriting.
Chairman Tauzin. It is his notes?
Mr. Harlan Waksal. Yes.
Chairman Tauzin. Thank you.
Mr. Harlan Waksal. And by the way, for the record, happy
birthday.
Chairman Tauzin. Thank you, sir.
Mr. Harlan Waksal. You are welcome.
Chairman Tauzin. And while we are doing the handouts to
you, you said that on the 26th that you began calling the team,
the offices of the team, to let them know that you have
received this information that a refusal to file letter was
coming?
Mr. Harlan Waksal. We had a working group from Bristol-
Myers and ImClone, which was a routine call that we were having
at the time.
Chairman Tauzin. Right. Did you ever get to talk to your
brother?
Mr. Harlan Waksal. I don't remember when, but I believe on
the 27th I did. I'm sure that at some point that I did, but I
don't recall any specific call.
Chairman Tauzin. Did you similarly call family members and
advise them as well?
Mr. Harlan Waksal. Absolutely not. I did not call any
family members or friends.
Chairman Tauzin. Can you give us any explanation why so
many family members sold stock on the 27th?
Mr. Harlan Waksal. I can't give any insight into that, sir.
Chairman Tauzin. All right. Let's look at the documents now
if you don't mind. The documents that I referred to are, first
of all, the minutes. And if you look at page two of the
minutes, which I understand are exchanged after these meetings
so that both sides approve the minutes, and confirm that this
is what really occurred at the meeting. Is that correct?
Mr. Harlan Waksal. We do exchange minutes.
Chairman Tauzin. Right. And if you look at page two, you
will see that this is a phase two open label study following--
it says following two courses of irinotecan, patients tumors
are measured, et cetera. Is that correct?
Mr. Harlan Waksal. I'm sorry, but I not with you quite yet.
But, yes, I see it. On page three?
Chairman Tauzin. I think page two.
Mr. Harlan Waksal. Page two? One second.
Chairman Tauzin. Page two, the middle of the page.
Mr. Harlan Waksal. Yes, I see it.
Chairman Tauzin. This defines a protocol, and this
literally is the criteria of protocol; is that correct?
Mr. Harlan Waksal. Well, it actually--it should. What we
discussed in the August meeting in the slide presentation that
was given to the FDA, and also that has been shared with this
committee as well, is very clear.
It speaks to protocol, the second protocol, and the
amendment that was taking place, and the enrollment criteria
within that, and I shared that with committee members.
Chairman Tauzin. But I want you to look at the letter of
January 12, 2001 that we also gave you.
Mr. Harlan Waksal. Yes.
Chairman Tauzin. And in the second paragraph, it clearly
refers to the fact that the fast track development program is
being designated, and where refractory is defined as
progressive disease during at least two cycles of standard
doses of these chemotherapy drugs. Is that correct?
Mr. Harlan Waksal. It says where refractory is defined as
progression of disease during at least two cycles of standard
doses of 5-fu irinotecan.
Chairman Tauzin. Right. And read the next sentence for us
if you don't mind.
Mr. Harlan Waksal. ``Please note that if the clinical
development program you pursue does not continue to meet the
criteria for fast track designation, the application will not
be reviewed under the fast track program.''
Chairman Tauzin. Wasn't this a very clear statement from
the FDA that if you deviated from the two cycle requirements of
the criteria that you would not be reviewed on the fast track?
Mr. Harlan Waksal. Well, it clearly shows some confusion.
However, I----
Chairman Tauzin. Well, what is confusing about that? I
mean, here the FDA is saying very clearly that they are
designating you on the fast track, where in fact these two
cycles of standard doses apply, and this is the criteria.
And it says in the next sentence, ``please note that if the
clinical development program that you pursue does not continue
to meet the criteria for fast track designation,'' that the
application will not be reviewed. How confusing is that?
Mr. Harlan Waksal. In March of 2000, we submitted version
two, and was stamped in and received by the agency. In August
of 2000, we reviewed with them specifically the only content
that was specific to the protocols was version two.
And I recognize this, and I must say I didn't spend a lot
of time reviewing this in this kind of detail. However, in the
patients who were treated, the average number of cycles of
treatment that these patients received wasn't two, but four
cycles of treatment.
Chairman Tauzin. Well, that may be an average, but the
bottom line is that the FDA was clearly telling you that this
is the basis upon which you are being approved. We are not
going to continue you on the fast track if you deviate from it,
and yet changes were made that you could have alerted the
agency about, or you could have discussed with the agency.
You could have informed the agency that they were working
on the wrong protocol, and you could have corrected this
misconception by the agency. And I am not being mean. I am just
trying to understand.
If you really wanted to get the drug approved, and you were
being told this is what we believe we are approving you on, and
this is the criteria that you have got to follow under what we
believe we are approving you under for fast track.
And you know that is not really what you are working on.
You are working on some other iteration of it. Why didn't you
inform the agency that they had approved you under a
misconception?
Mr. Harlan Waksal. Well, one, we always informed the agency
what we were doing well before our August meeting, and during
that August meeting, the only discussions presented by the
company was version two. I think we were very clear throughout
the time that we worked with them.
Chairman Tauzin. But the minutes reflect something very
different, and these are minutes that you reviewed and
exchanged with the agency. The letter reflects something very
different.
And the letter is a document we can look at, and not a
conversation that was not recorded. What I am looking at in
documents is very clear evidence that the agency was approving
you on the fast track under the misconception that the protocol
was based upon this criteria when you knew that it wasn't.
And I am not throwing and heaping blame on you. I am just
wondering why if this approval process was so important to you
as I know it is.
Mr. Harlan Waksal. Absolutely.
Chairman Tauzin. If it was so important to these cancer
victims as you knew it was, and we know it is, why would you
not at some point say to the agency that you have approved us
under a misconception?
Mr. Harlan Waksal. I believe I said right at the beginning
when we started the questioning on this issue that at no time
did I even have an understanding of the version one and version
two until it was raised at this meeting. I was always under the
assumption----
Chairman Tauzin. But you did review these minutes?
Mr. Harlan Waksal. Well, the company reviewed the minutes,
and I am ultimately responsible for making sure that is done,
yes, sir.
Chairman Tauzin. But you are telling us that you personally
did not know what I have shown you today until today?
Mr. Harlan Waksal. I am telling you that, one, I didn't
really look at that issue until today, but more importantly, I
am still not certain that it really is an issue. That these
patients were treated by their doctors using what is the
standard of care.
And if a patient fails a cycle of treatment, a single cycle
of treatment, with tumor enlargement or new tumors, it is
unethical to continue to treat them with a second cycle of
irinotecan. That's why we made the modification. It wasn't to
move away from the standard of care, sir.
Chairman Tauzin. I am not saying that you were wrong to
make a modification. I am not saying that may not have been the
right thing to do. But having made the modification, according
to the letter, you would not have been entitled to the fast
track approval process. That's the point that I am making.
And yet having made the modification, and knowing that the
agency was operating under this misconception, that you were
going to require a criteria based upon two cycles of standard
doses, you never said to them, hey, you have approved us on the
basis of a wrong protocol, and I don't understand why you would
not have done that.
Mr. Harlan Waksal. Well, again----
Chairman Tauzin. You did review the letter did you not, Dr.
Waksal?
Mr. Harlan Waksal. I have. I have reviewed the letter
today.
Chairman Tauzin. I mean, did you review it when you
received it?
Mr. Harlan Waksal. I clearly would have read this letter
when I received it.
Chairman Tauzin. I would have thought that you would have,
too. And it very clearly says that if the development program
that you have pursued does not continue to meet this criteria,
which you just described in the paragraph above, the
application will not be reviewed under the fast track program.
I don't know how that could be any clearer.
Mr. Harlan Waksal. Well, there was no deception on our part
on what we were doing. We were very clear with the agency, and
I believe if the agency will be given the opportunity to
respond, maybe they could clarify whether or not this was a
relevant issue.
I don't believe that this was a major problem as we move
this forward.
Chairman Tauzin. Well, apparently this becomes the major
reason why the letter is--a refusal arrives. I mean, the agency
finally recognizes that it was pursuing a course of approval
here based upon a misconception.
Mr. Harlan Waksal. I am not aware of that, sir.
Chairman Tauzin. I am being corrected. I am told that they
didn't realize that either until we pointed it out to them,
which is really perhaps even more damning. Let me----
Mr. Harlan Waksal. I don't believe that was an issue that
the agency or the company focused on as being important.
Chairman Tauzin. But that is amazing to me. It really is.
Mr. Harlan Waksal. Well, I think it is because it really
was not an issue that spoke to the heart of whether or not this
drug was working or not. I don't believe that that is a
critical component.
Chairman Tauzin. Well, all we know is what the documents
tell us, and what is concerning to us is that when an agency--
our problem is looking at this process to see whether it works
well, and whether it fails or not.
Mr. Harlan Waksal. Yes, sir.
Chairman Tauzin. And we are seeing a process whereby the
agency approves you for this fast track, which is a special
procedure, based upon a criteria clearly defined.
It gets changed, and the investigators for our committee,
and in interviewing the senior FDA official, believes that in
fact that they made their decisions based upon the wrong
version of the protocol, and they also state, which you have
denied under oath, that ImClone mislead them about the claim of
single agent activity.
So we have got a situation where we are going to have to
find where the truth lies in between those two statements.
Mr. Harlan Waksal. There is no question that at no time did
we mislead the FDA regarding what we were doing, and again I
want to emphasize that the fact that the FDA didn't emphasize
this issue, even at the refusal to file time, and the fact that
I didn't recognize it until today, this does not seem to be a
major issue regarding why we received the refusal to file.
Chairman Tauzin. Well, they seem to think it was a major
issue when it was pointed out to them finally.
Mr. Harlan Waksal. That's very possible.
Chairman Tauzin. I want to take you to statements that your
brother, Sam, made when he was chief executive officer on the
29th, as reported by Reuters. Do you have a copy of that, too?
Mr. Harlan Waksal. I do not.
Chairman Tauzin. I am going to read it to you, and we will
make a copy available to you as I read it to you.
Mr. Harlan Waksal. I believe I have a copy now.
Chairman Tauzin. All right. It says that Sam Waksal,
ImClone's chief executive officer, told Reuters that the agency
first wants more annotation information about how the company
verified that patients enrolled in these trials had indeed
failed, et cetera.
It says also further down that there is a prediction that
it would take only--Waksal said that company officials hope to
meet with the FDA within 10 days to supply necessary
information to the agency 6 to 10 weeks.
There were a lot of statements made minimizing the effect
of this letter apparently of denial, and then we have something
that I hope the Bristol-Myers witnesses will help me
understand. We have got a confidential document. Do you have it
in front of you? It is B019629.
And let me read it to you. It says, ``Nancy, I agree that
some, a lot, of Sam's comments are misleading, and at this
point we should continue to be silent.'' What does that mean,
and what is Bristol-Myers doing at that point?
I mean, you are hearing the chief executive officer of the
company make these comments publicly, and then an e-mail is
exchanged saying that we agree that some, a lot, of Sam's
comments are misleading. At this point we should continue to be
silent.
What is the meaning of that kind of an e-mail? Mr.
Markison.
Mr. Markison. Well, sir, these are the comments of two
people that are within the company. I am not quite sure they
represent the entire company. However, we were certainly going
through a period where we were trying to determine the best
course of action, and that is where we were at that time.
Chairman Tauzin. But of course the problem was that you
were a partner in this operation, and you are aware that the
chairman of the company is making misleading statements to the
public in the middle of this crisis, or at least the comments
were that you were, and that people in your company were saying
that we should continue to be silent.
Mr. Markison. Well, sir, these again--and I am sorry to
point this out, but these are just two folks within the
company. And again we were struggling with the new information
received, and attempting to determine for ourselves----
Chairman Tauzin. Were these two people pretty key people in
the development of this product?
Mr. Markison. Absolutely not, sir.
Chairman Tauzin. They were not?
Mr. Markison. In the development of this compound, they had
no relevant roles.
Chairman Tauzin. No, not in the development of the
compound, but in the development of or the marketing of it.
They were part of the team were they not on this particular
drug?
Mr. Markison. Both of them were part of the team.
Chairman Tauzin. And they are saying in an e-mail that Sam
is making misleading comments. But let's just be silent.
Mr. Markison. Sir, I can't tell you if they are talking to
themselves. I am not a party to this. This is the first time
that I have seen it. I am acknowledging clearly that Bristol-
Meyers Squibb was trying to assess for themselves the exact
extent of what needed to be done as we go forward, and that's
clearly where we were.
Chairman Tauzin. Well, Mr. Chairman, again, I think part of
what I hope we will discern, and perhaps as we proceed further
with the investigation, is how in fact the fast track process
can be improved. I would hate for this hearing to somehow in
any way cast dispersions upon what is an incredibly important
process to make incredibly important drugs more quickly
available to people once they have been properly tested.
But at the same time, I suspect that we have some real
problems with the way that the system works, and when an
exchange of letters that looks so clear to me at this point can
be so confusing to the partners involved here, and the parties
involved here.
And when approvals can be based upon wrong versions of
protocols, and at least in the testimony of one FDA official on
a misleading claim, the bottom line is, and I think you have
said it, Mr. Waksal, and you apologized for it.
But we all could have done a better job with your company
and the FDA in making this process work so that an important
drug could have been properly processed, and perhaps available
today to the American public.
And if we can straighten it out for the future, Mr.
Chairman, I think we will have learned a lot from this hearing.
Thank you very much.
Mr. Greenwood. The Chair thanks the chairman, and
recognizes the gentleman, Mr. Stupak, from Michigan, for 5
minutes.
Mr. Stupak. Thank you, Mr. Chairman. Dr. Smaldone, you
indicated that you were part of the due diligence review for
Bristol-Myers Squibb before they agreed to go in with ImClone,
correct?
Ms. Smaldone. Yes, I was.
Mr. Stupak. And in fact you sent an e-mail to your
colleagues, a Peter Ringrose, and a Beth Seidenberg, concerning
ImClone. And it states that on a whole, and I am quoting now
from the e-mail, ``that on a whole this remains a very high
risk opportunity.'' Is that correct?
Ms. Smaldone. That is correct. That was in June.
Mr. Stupak. Right. In June. And then you went on and you
pointed out certain critical outstanding issues that you cited.
One--and again I am going to quote them There were three issues
that you had here. The pivotal CRC colorectal cancer issues,
single agent activity.
``The trial which is ongoing will need to be shared with
us. We should attend the FDA meeting with ImClone when the data
is final. There is no agreement that we could find that is
reassuring regarding the activity level needed for approval.''
Is that correct?
Ms. Smaldone. That is correct.
Mr. Stupak. Okay. You go on to say that the weak dose
selection rationale, ``they have developed APK pharmacokinetics
rationale for dose selection. However, the dose is questionable
for refractory patients, and the safety margin for the early
stage patient, has not been determined.
``In their phase three first line study, they are
evaluating the same dose used in refractory disease. This is
already seen as a problem by the FDA and us.'' Is that correct?
Ms. Smaldone. That is correct.
Mr. Stupak. And safety, you indicated again, and quoting,
``that the safety of the product specifically related to skin
toxicity, bleeding, allergy, has not been well categorized.
This reemphasizes the weaknesses of the dose selection
argument.'' Is that correct?
Ms. Smaldone. Yes, that is correct.
Mr. Stupak. And then you went on to your executive, and you
point out the risk of the results of the single study agent,
and again let me quote you. That ``the FDA has requested that
the data be provided on the anti-tumor activity of C-25 as a
single agent. Pre-clinical data has thus far been provided to
FDA to address this issue.
``But they have persisted in their interests that clinical
data be provided. No accelerated approval has ever been granted
for an oncology drug for use in a combination therapy.'' Is
that correct?
Ms. Smaldone. This is coming from the same memo? I'm sorry.
Mr. Stupak. This is coming from the memo, yes, and the
concerns about the single agent study and 9923 study were not
completely resolved before you entered in your agreement. In
fact, we have a copy of it if you would like to see it.
Ms. Smaldone. If I may, please. Thank you.
Mr. Stupak. Sure. Can we provide that to the witness. Here,
give her this one right here, Alan.
Ms. Smaldone. Thank you very much. Yes.
Mr. Stupak. Okay. So no accelerated approval, and that is
what you are going for here before you enter into this
agreement, and this is June of 2000.
No accelerated approval has ever been granted for an
oncology drug for use in a combination therapy. Is that
correct? And that's really what ImClone was asking to do?
Ms. Smaldone. Right.
Mr. Stupak. And whether we agree if it was protocol one or
protocol two here you had to have, this approval fast track was
based upon the combination therapy; is that correct?
Ms. Smaldone. That is correct.
Mr. Stupak. Even after the rejection though. So there
should be no question here that we have to have a combination
therapy and there is some weaknesses here.
Bristol-Myers Squibb reviewed ImClone's application again
after it was rejected in January of 2002, correct?
Ms. Smaldone. In January of 2002, this was after the
refusal to file letter, went through a full assessment again,
yes.
Mr. Stupak. Correct. Were you a part of that review?
Ms. Smaldone. Certainly my team was, yes.
Mr. Stupak. So you are familiar with it?
Ms. Smaldone. Yes.
Mr. Stupak. Dr. Weiss says that BMS review, and that
performed by the independent review assessment committee. That
is part of your team, right?
Ms. Smaldone. I believe that may be referring to the
independent radiology review that we pulled into place in
August of 2001.
Mr. Stupak. Okay. So, yours, plus this independent review
committee, agreed that only 16 of the 21 patients admitted to
the 9923 study has having progressive disease show a partial
response to the combination therapy. This is 13.2 percent.
Has the FDA ever approved an oncological drug with a
response rate that low using only clinical end points?
Ms. Smaldone. Yes, they have. In fact, if I may,
Congressman----
Mr. Stupak. And what drug did they use it on?
Ms. Smaldone. For irinotecan itself----
Mr. Stupak. But irinotecan was not used in combination. It
was used as a single agent, correct?
Ms. Smaldone. That is correct.
Mr. Stupak. And it also increased life expectancy of the
patient as we talked about with Ms. DeGette earlier, and your
drug does not increase the life expectancy of a patient. It may
at best shrink a tumor.
Ms. Smaldone. At the present time under accelerated
approval regulations, which is evaluating the effect on a
surrogate marker, which in this case was response rate, at the
same time it is necessary to evaluate the full clinical benefit
if you will with long term data, which was the plan for this
program in any event. If I may just make one clarification if I
may.
Mr. Stupak. Sure.
Ms. Smaldone. In June 1901, what I was referring to were a
series of issues, scientific and regulatory issues, that were
bubbling forward at that point in time, which are part and
parcel of what is seen throughout the due diligence process.
One point in particular, just to get the sequence here, is
that because of some of those issues that were raised, and
further discussion within the company, as well as with outside
experts, both oncologists, regulatory experts, we did create a
separate independent review panel with radiologists that were
identified to look at the 9923 data specifically, and
reevaluate the responders in that particular study.
So as a result of these issues and discussions on
collapsing time here, Bristol-Myers Squibb took this step to
reevaluate with a separate review panel of experts that
particular study on those data.
Mr. Stupak. Right. And in the review panel and all of this
review, and rightfully so, Bristol-Myers Squibb did it, and it
was in January of 2002 after refusal, right? That's what I am
talking about, the refusal now.
Ms. Smaldone. No, this was before. This is prior to the
time of the agreement.
Mr. Stupak. Okay. Now, we have all of this in June when you
did your memo, and you agreed with me that no accelerated
approval has ever been granted for an oncology drug for use in
a combination therapy. And that was your statement back then,
and that's true of what you said in June of 2001?
Ms. Smaldone. Right.
Mr. Stupak. Now, I am bringing you to January of 2002.
Ms. Smaldone. Yes.
Mr. Stupak. And you have gotten your RTF, and you have been
rejected, and there is an internal review that you are doing;
isn't that correct?
Ms. Smaldone. Yes.
Mr. Stupak. You are doing it with this independent
committee, and Bristol-Myers Squibb, and you are saying what
happened here. And your own document says that it was agreed
upon by your independent assessment committee that the 9923
study has having progressive disease show a partial response to
a combination therapy.
This is 13.2, because only 16 of the 121 patients
responded. And that is less than the 15 percent that it was
supposed to be, correct?
Ms. Smaldone. What we did at that point in time--and this,
Congressman, was in August.
Mr. Stupak. No, no, January, 2002. You are not familiar
with any of that?
Ms. Smaldone. I'm sorry?
Mr. Stupak. You are not familiar with the Bristol-Myers
Squibb review in January of 2002?
Ms. Smaldone. In the January-February timeframe, we went
through several internal reviews within Bristol-Myers Squibb,
as well as again another panel of experts that were brought in
to assess all of the information.
And at that point in time, what I believe is that the
reassessment that was done in August was put forth to this
group.
Mr. Stupak. Forget August. In January of 2002, here is your
draft document, confidential, Bristol-Myers Squibb, you are
going through to see why you were refused, right? Are you
familiar with this? It is January 11, 2002.
Ms. Smaldone. I really couldn't say specifically. There are
so many documents, and I would be happy to see it and comment
if I may.
Mr. Stupak. Okay. Did you tell our staff, the Congressional
staff--you have been interviewed by them, right?
Ms. Smaldone. Yes.
Mr. Stupak. Right. Did you tell the staff that you would
never have permitted Bristol to submit an application to the
FDA of the quality of the ImClone submission of their
application? Did you tell our staff that you would never allow
your company to submit an application like that?
Ms. Smaldone. The discussion was as it relates to quality
and study conduct, and quality assurance. We within Bristol-
Myers Squibb work at very high standards, and after the refusal
to file letter, and the extent, and the depth of the issues
that were raised in the refusal to file letter, it was very
clear that there were some very substantive--what I would call
study conduct quality assurance types of issues, that is
correct.
Mr. Stupak. So you did tell our staff that you would never
let----
Ms. Smaldone. That's correct.
Mr. Stupak. Okay. So, Bristol sent in an application such
as what ImClone did, and you said there was some substantive
issues, and that's why the refusal letter, right?
Ms. Smaldone. Yes.
Mr. Stupak. So it is more than just documentation?
Ms. Smaldone. In its cumulative, it certainly appeared to
be more than documentation.
Mr. Stupak. And then in the substantive issues that the FDA
raised in its refusal, the FDA was fully justified in sending
ImClone an RTF based on the application that they submitted in
the fall; isn't that correct?
Ms. Smaldone. When we say, Congressman, the refusal to file
letter, and went through a thorough review and evaluation of
it, it became apparent that in accumulative of all of the
issues that were raised there, it appeared difficult for--and I
can't speak for the FDA, but based on my experience, it
appeared difficult for them to reconstruct the datasets and
follow the chain of evidence.
Mr. Stupak. So if they couldn't follow the chain of
evidence, and if they couldn't reconstruct it, they were
certainly justified then in putting out the RTF were they not
in your 17 years of experience as you said?
Ms. Smaldone. If I can make some qualifications to that,
sir. I have never seen a refusal to file letter before, and I
have never since.
Mr. Stupak. Well, the refusal to file was based upon those
substantive issues that you said were lacking, correct?
Ms. Smaldone. That is correct.
Mr. Stupak. So if the refusal is based upon substantive
issues, then the FDA was correct in putting an RTF on?
Ms. Smaldone. I believe that it had some justification
based on what I was able to see.
Mr. Stupak. Okay. On December 4, there is starting to catch
wind that maybe ImClone or that ImClone might be receiving an
RTF or that there application would not be approved.
Did you or anyone from Bristol-Myers Squibb call up and
say, look, what do you need to make this thing work, and can we
withdraw it, or can we rework it? Did anyone do anything like
that that you know of?
Ms. Smaldone. Excuse me, sir. With the FDA, or with----
Mr. Stupak. With the FDA. Did you call the FDA and say how
can we rework this. Can we withdraw. Let us do further work on
this?
Ms. Smaldone. We are not responsible at that point in time
and still are not for the BLA or any of the dialog with the
FDA.
Mr. Stupak. Thank you.
Mr. Greenwood. The gentleman's time has expired. The Chair
recognizes himself for--well, first off, to--well, without
objection, the Chair would enter into the record certain
documents. The first of these is three pages of handwritten
notes referred to by Mr. Tauzin.
The second is a Department of Health and Human Services
document, reference number BBIND5804, dated January 12, 2001.
The third is a Department of Health and Human Services
memo, dated September 22, 2000. And fourth is the e-mail
referred to that is addressed to Nancy.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Greenwood. The Chair recognizes himself for 5 minutes
for inquiry. Dr. Markison, I would like to go back to the way
that you learned of the refusal to file letter. How did you
learn that was going to happen?
Mr. Markison. Well, sir, there was a series of events
throughout the month of December, an inkling it seems on
December 4, and as the month progressed, certainly there was--
--
Mr. Greenwood. It is an inkling that Dr. Lee described as
three equal possibilities?
Mr. Markison. That's the way that Dr. Lee described it.
Mr. Greenwood. But you had an inkling that there was a
greater likelihood of the three possibilities?
Mr. Markison. There was an inkling, sir, and quite frankly
that was in essence the beginning in my mind anyway of----
Mr. Greenwood. It was an inkling in your mind?
Mr. Markison. It was an inkling in my mind, yes.
Mr. Greenwood. And how did that inkling get into your mind?
Mr. Markison. That it was mentioned as a possibility.
Mr. Greenwood. Mentioned by whom?
Mr. Markison. Dr. Lee reported it from the FDA dialog.
Mr. Greenwood. But did she say that it was more likely that
there would be a refusal to file letter than that there would
be an approval?
Mr. Markison. No, sir.
Mr. Greenwood. She just mentioned it as one of two or three
equal possibilities?
Mr. Markison. Dr. Lee just reported to our group on the
results of her conversation.
Mr. Greenwood. Okay. All right. And then on December 20th,
there was a teleconference, which we referred to earlier where
it was apparent that the FDA had made or come to a decision and
told ImClone not to call them, and that they would receive
their decision on the 28th.
At that point, we had been working with Alan Bennett,
outside counsel, for some time off and on, and he was familiar
with the project, and I asked him if he could find out any more
information that would be helpful, because at this point it was
not definitive.
Mr. Bennett then responded to me on Christmas Eve, as I
have stated, in writing, and was----
Mr. Greenwood. What time of day was that on Christmas Eve?
Mr. Markison. I believe it was in the early evening because
I was trying to head out the door with my children for
Christmas mass.
Mr. Greenwood. Okay. So you were in the office when you
received that?
Mr. Markison. No, I was at home, sir.
Mr. Greenwood. You were at home when you received that
information from Mr. Bennett early in the evening?
Mr. Markison. Yes.
Mr. Greenwood. And then who was the next person--who was
the first person with whom you shared that information?
Mr. Markison. Well, I left the house, and came home, and
tried to reach Harlan Waksal, and again failed, and did not
leave a message on his machine. I called him the next day and
also----
Mr. Greenwood. So you didn't share this information with
anyone else over Christmas Eve?
Mr. Markison. On Christmas Eve, no, sir. But on the next
day, Christmas Day, it was shared within my company certainly.
Mr. Greenwood. Well, Mr. Bennett knows the information, and
Mr. Bennett gives the information to you. Does Mr. Bennett give
the information to anyone else?
Mr. Markison. He was also corresponding with Mr. Keene,
legal counsel to Bristol-Myers Squibb, and Mr. Costa, also
legal counsel to Bristol-Myers Squibb.
Mr. Greenwood. So Mr. Bennett informed those two gentleman
on Christmas Eve, as well as he informed you?
Mr. Markison. They received a copy of the same e-mail that
I did.
Mr. Greenwood. A copy of the same e-mail. Okay. So the
first person that you shared this information with was whom?
Mr. Markison. I believe it would have been Harlan Waksal,
or additionally I spoke to Cheryl Anderson, who is in
regulatory affairs in our company as well.
Mr. Greenwood. This is on Christmas Day?
Mr. Markison. On Christmas Day, yes, sir. And I wanted to
make sure that Cheryl communicated with the appropriate----
Mr. Greenwood. Did you share the information with anyone
else at ImClone?
Mr. Markison. I only spoke to Dr. Waksal on this Christmas
Day.
Mr. Greenwood. And did you call anyone else at Bristol?
Mr. Markison. Yes, sir, I did. I called Cheryl Anderson. I
believe I also called my supervisor at the time, Mr. McBlaine,
to inform him, and I believe I may have spoken to other people
in the company at that time, but quite frankly I can't remember
all of them.
Mr. Greenwood. Did you inform those folks at Bristol before
or after you spoke to Harlan Waksal?
Mr. Markison. I can't recall exactly, sir, because I know
that I made a number of attempts to call Dr. Waksal, and I did
not want to leave this message on his machine.
Mr. Greenwood. Mr. Waksal, I have a copy of a letter signed
by your brother, Sam Waksal, and sent to the ImClone Board of
Directors, on July 18, 2001. It appears that the purpose of the
letter is to inform the Board that you and your brother had
borrowed over $30 million from the company to exercise over 4
million options. Is that true? Have you seen that letter?
Mr. Harlan Waksal. Can I see a copy of that letter, please?
Mr. Greenwood. While Mr. Waksal is looking at that, Mr.
Markison, do you know how Sam Waksal did find out? You couldn't
reach him, but do you know how Sam Waksal found out about the
refusal to file letter?
Mr. Markison. No, sir, I do not.
Mr. Greenwood. You have no idea?
Mr. Markison. No.
Mr. Greenwood. Harlan Waksal, Dr. Waksal, do you have any
idea how your brother learned of the refusal to file letter?
Mr. Harlan Waksal. As I mentioned, I had told the senior
management team about the refusal to file letter, or the
potential for the--the strong potential for a refusal to file
letter, and I believe he spoke to the head of investor
relations at the company, Andrea Rabney, when he arrived
sometime in the evening of the 26th.
Mr. Greenwood. Have you had a chance to glance at that
letter?
Mr. Harlan Waksal. I'm sorry, I was. Just 1 second. But I
am familiar with it. It was asking for permission to get a
letter, a promissory note from the company to go and exercise
the stock.
Mr. Greenwood. So did you and your brother borrow the $35
million to exercise the 4 million shares on July 12, knowing
that you would use these shares during the tender offer from
Bristol?
Mr. Harlan Waksal. No. We did exercise our options, and we
did enter into a promissory note with the company at the time
that the Bristol deal was not completed, and due diligence was
still ongoing.
And, in fact, at the time we already had strong discussions
with outside counsel that we could go ahead and do conditional
exercise of the stock options. But I certainly would not have
had to purchase the options, but could have used the stock
options themselves in the offer if indeed we went down that
pathway.
So they were different types of issues. I exercised the
stock because of the price of $42 a share, and my feeling that
the company was going to continue to do strong, and continue to
move forward, and in flexion points would add value to this,
and that I wanted to gain the long term value of that equity in
the company, and that is why I have so many shares today. I
still believe that.
Mr. Greenwood. Did you know by the end of June that
Bristol-Myers Squibb was going to purchase roughly 20 percent
of the company?
Mr. Harlan Waksal. At the end of June, we had various
discussions with Bristol, and options included them purchasing
more, but 20 percent was around the number that we were
negotiating at that time.
Mr. Greenwood. How likely did you think that by the end of
June that that was to happen?
Mr. Harlan Waksal. In truth, I had been down this pathway
so many times with companies that I felt at that time that it
had probably a 50-50 chance of taking place.
Mr. Greenwood. And did that have anything with the decision
of you and your brother to exercise those options at that time?
Mr. Harlan Waksal. I can't speak for Sam. But it had no
impact on my exercising. If it had to do with a tender offer,
and the question is economically what would have made more
sense, it would have been simply to tender my stock options
rather than exercise them, which would still have resulted in
whatever financial gain.
What I did was buy a stake in ImClone. It was a promissory
note that was paid back. No money was given to me. I bought a
large stake in my company, which I still hold today. I still
have two million shares of ImClone stock, sir.
Mr. Greenwood. My time has expired. The Chair recognizes
the gentleman from Kentucky, Mr. Fletcher.
Mr. Fletcher. Thank you, Mr. Chairman. I wanted to ask just
a few questions following up.
Mr. Greenwood. Excuse me, but the gentlelady is being very
polite in allowing Dr. Fletcher to go ahead.
Mr. Harlan Waksal. I hope this level of politeness
continues in this direction as well.
Mr. Fletcher. Dr. Smaldone, when we asked Dr. Waksal about
compliance with the protocol, it mentioned that--and let me
preface this by saying is this going through the refusal to
file letter here, there seems like--and maybe it is just in
retrospect, but I think you probably share that.
But there is a lot of discrepancies here that are rather
obvious. If you can document CT scans on results with
irinotecan before you begin the combined therapy, you have no
base line, and there was some problems there.
But one of the things that was stated is that--for example,
it mentioned the elevated liver function test and some other
things of folks who have may been entered into the study that
were not eligible, was that the oncologist may not have had the
specific protocol right there in front of him.
And my recollection, and we have had patients entered into
protocols, and we have worked with protocols personally, and
generally there is a whole team that works. Often times nurses
that screen these patients, and they are very thorough, and the
protocol is very clear.
It is outlined in fact to assure that you meet the FDA
criteria. All of these things are checked off and file forms
are written, and all the criteria is written down. So how does
that happen that these were entered and maybe some oncologist
didn't know that they met the protocol? That seems odd to me.
Ms. Smaldone. It seems odd to me, too, sir. I really can't
comment beyond that.
Mr. Fletcher. I mean, these are not fly by night
oncologists. These are probably the world's experts.
Oncologists is what we are talking about. I mean, is the
protocol that poorly structured, and was it that poorly
organized.
I know that there are mistakes and things like that that we
make, and we are humans, and there are times where there are
deviations, or because of clinical reasons that you have to
depart from the protocol.
But these are things that are clearly aberrations, and I
just wondered from your standpoint if you have ever seen
anywhere where protocols are done where the clinician doesn't
have the protocol in front of him.
Ms. Smaldone. Normally, that is not the case, sir.
Mr. Fletcher. Okay. Dr. Waksal, if you could maybe respond
to that. I know that you said, well, maybe they didn't have it
in front of them. I assume you are a clinician as well.
Mr. Harlan Waksal. I am, but I can't give an explanation on
it. It was not because of a lack of clarity in the protocol.
Why it took place, I don't know. I can tell you that the
majority of these had to do with what I mentioned before, the
liver function test problems.
And in fact that is something that makes the patient
sicker. It means that these patients were a little bit more
else. So the doctors must have felt, and I am speculating, must
have felt that they still were going to be given a drug that
would not result in an adverse event.
But I am really speculating. I don't know why it took
place.
Mr. Fletcher. Well, I just find that very concerning,
because most of the oncologists that we have worked with, as
well as other clinicians in different areas, have done FDA
studies, phase two.
Mr. Harlan Waksal. This study was done at the University of
Colorado, at Memorial-Sloan-Kettering, at the University of
Alabama, at UCLA. It was done at prestigious institutions
across the country, and with clinicians that were very good at
doing these types of trials.
Mr. Fletcher. Let me ask Dr. Smaldone. Are those normally
done with a lot of intervention, or at least oversight from a
company that is sponsoring these, to go in and make sure that
there is compliance all along the protocol, and was that a
problem with ImClone?
Ms. Smaldone. I can tell you what we do, Congressman, which
is there is significant oversight on the part of our clinical
teams, our clinical monitors, or indeed the contract research
organization if the study is contracted out to a research
organization to assist in the clinical monitoring and study
conduct.
That's what we do, and I can't say exactly what the----
Mr. Fletcher. To ensure things like some of these patients
where they simply did not have any adequate CAT scans, which
are pretty obvious that those kind of mistakes are not made.
But let me ask you--and I want to ask both of you. Dr.
Smaldone, from your standpoint, how much communication took
place in your review, and I assume that you have reviewed this,
especially since the refusal to file letter.
How much communication took place on these concerns prior
to the refusal to file, because I think Dr. Waksal, you said
that on December 28, or even a few days before, that you were
quite surprised at the refusal to file.
Mr. Harlan Waksal. Yes.
Mr. Fletcher. So obviously in your mind there was not the
adequate information from the FDA that the data that you were
giving them was not adequate or that the protocol was not
stringent enough as they said it wasn't conducted properly.
Mr. Harlan Waksal. Actually, my comment was that I thought
it was reparable, and I knew that there were issues, but I
thought that they were all issues that we could go ahead and
fix.
Mr. Fletcher. Okay. Dr. Smaldone.
Ms. Smaldone. Sir, we did not review the clinical program
of ImClone. So we----
Mr. Fletcher. But did you review all the communications and
everything that answered between--Dr. Lee, I assume that you
were seeing the clinical aspects of that. Did you review all
the communications to see where in the world--I mean, it is
bound to have caught you by surprise as well.
Ms. Smaldone. Congressman, we did a very extensive due-
diligence review of the scientific aspects, pre-clinical
aspects, and clinical, regulatory, financial, full-team of
people reviewing this.
There are however certain levels of expectations on the
part of the proposed partner that the study conduct, ways of
approaching good clinical practice, and quality assurance,
would be conducted as would be conducted with any
pharmaceutical company according to guidelines.
So it was with total hindsight at this point that some of
those expectations were not met, but we did not review the
program, and we were certainly not there to participate in any
of the specific dialogs between ImClone as a sponsor in any of
their clinical investigators.
Mr. Fletcher. Okay. Thank you. Well, it is just that in my
experience that clinicians rarely deviate from a protocol that
is pretty well understood, especially if it is done well.
Let me just say that the thing that really concerns me here
is that you have got obviously the financial ramifications, the
investors, and some of the other things. It is very, very
important.
And not only that, but it is just as important, and
probably even more so, is the expectations, and it appears that
the financial influence of this, particularly from the
executives of ImClone, drove raising patient expectations, and
that is very concerning.
And I just wondered, Dr. Waksal, in retrospect, what would
you have done differently to have prevented this debacle and
tragedy actually?
Mr. Harlan Waksal. Well, it is a tragedy, and I think most
importantly one point that seems to be left out, and we talk
about certain documentation, and one point that is left out is
the response rates in these patients, and the response rates,
which is really critical.
And it wasn't survival, but other drugs have been indeed
approved based on response rates, including irinotecan.
Survival data came later that these types of effects that we
are seeing in patients were remarkable, and we tried to give
some testimonials.
In fact, there is a patient here today, Amy Cohen, who
again has been treated with this drug, and who had benefit, and
I think that the most important thing that we did wrong--we are
a small company, and we didn't have the resources to do some of
the quality checks that needed to be done.
We worked with outside groups, and clinical research
organizations to do that work with us and for us. Unfortunately
that is where the errors took place, in the quality and making
sure that quality was intact. And we are working now
continuously to reconstruct this to the best of our ability.
Mr. Fletcher. Thank you. Mr. Chairman, one thing I would
just recommend. If we have clinical trials that are FDA
approved, and they are being conducted, and clinicians are
not--in other words, if a company requires to have the kind of
oversight to ensure that clinicians are not following the
protocol, I think we have got some significant problems here.
And I just wanted to add that to my closing. Thank you.
Mr. Greenwood. The Chair thanks the gentleman and
recognizes the gentlelady from Colorado, Ms. DeGette, for 5
minutes.
Ms. DeGette. Dr. Waksal, you said that you have provided
testimonials from patients who have been helped by this drug.
Would that include the letters that we have received in this
committee?
Mr. Harlan Waksal. That's correct.
Ms. DeGette. And if I understand it, all of the letters
that we have received in this committee have been received
because the patients are getting the drug under the
compassionate-use doctrine, which does not require pre-approval
by the FDA; is that correct?
Mr. Harlan Waksal. I believe that is correct. I am not
sure, but I believe that could be correct.
Ms. DeGette. And, Dr. Smaldone, is that your understanding
as well, that these patients who have been helped, have been
helped under the compassionate-use doctrine, and that in fact
for these colorectal cancer patients who have no other help,
that your company and ImClone can provide the drug to them
without pre-approval by the FDA. Would that be correct?
Ms. Smaldone. I am not aware of what testimonials were sent
to the committee. I am very sorry. So I really can't comment.
Ms. DeGette. Okay. But as far as you know, Erbitux could be
provided to colorectal cancer patients without any other
alternative under the compassionate-use doctrine.
Ms. Smaldone. Under compassionate-use, it can, yes.
Ms. DeGette. Thank you. Now, I just have a couple of more
questions, Mr. Chairman. I do apologize, but I am going to have
to leave to go get on an airplane because of the forest fires
in my State, and so I will try to be quick because I want to
hear a lot of what the FDA says.
As I understand it, Mr. Markison, and also Dr. Smaldone,
your company invested $2 billion in ImClone, right, Mr.
Markison?
Mr. Markison. Well, we invested $1 billion for nearly 20
percent of the company, and then we paid--we structured a
transaction that would have us paying another billion dollars
for the right to market the product.
Ms. DeGette. So that answer would be yes, $2 billion?
Mr. Markison. We have not paid the $2 billion.
Ms. DeGette. You have paid only $1 billion?
Mr. Markison. $1 billion, plus $200 million up front.
Ms. DeGette. Thanks. So I would think as a business man
that you would want to make sure that there was some efficacy
to a drug before you invested $1 billion plus, correct?
Mr. Markison. That's correct, ma'am.
Ms. DeGette. And, Dr. Smaldone, as I understand it, the due
diligence review that was done before this business decision
was made was that the patient who had a positive response were
the only ones that were looked at, is that correct?
Ms. Smaldone. The patients that had a positive response to
Erbitux were reevaluated by an outside expert group that we
brought in as part of the due diligence, that is correct.
Ms. DeGette. And what else was done as part of the due
diligence?
Ms. Smaldone. We went through extensive evaluation of this
product that identified many of the issues that we had talked
about, and also evaluated this product and the entire
arrangement, including the manufacturing capacity, and there
were other things that were looked at as part of this.
Ms. DeGette. But in terms of the efficacy of the drug, what
else was done aside from this independent review of the 27
patients that had a positive result?
Ms. Smaldone. This was discussed internally and externally,
and we went to outside experts. It was discussed with many
individuals, including individuals that have since come to the
company who had been experts in the field at the National
Cancer Institute in the U.S.
Ms. DeGette. So you didn't recreate any of the critical
trials?
Ms. Smaldone. We could not recreate any of the critical
trials. Those were not possible to do.
Ms. DeGette. Those were done in 1999, right?
Ms. Smaldone. That was accepted as work done by ImClone,
correct.
Ms. DeGette. Okay. So when you had your independent experts
review, the 27 patients with the positive response, the results
went down from 22 percent to 13 percent, correct?
Ms. Smaldone. That is correct.
Ms. DeGette. And yet based on that, with 27 patients out of
a roughly 130 some patients study, 27 patients with a positive
response, in your independent review, it went down by 11
percent; from 22 percent to 13 percent.
But yet your team felt that was worth a $2 billion
commitment for financing?
Ms. Smaldone. After everything was said and done, and all
the assessments were made in this review, which was essentially
doing everything against the drug, and this was the worst case
scenario analysis that was done, we believe that this drug had
positive potential, and that at the end of the day was an agent
that had promise for cancer.
And again if you consider a 13 percent response rate with
an unmet medical need in a setting where patients have no other
alternative, and if this were a family member of anyone of the
committees, I would think that this would be seen as something
very important.
Ms. DeGette. Now, wait a minute. First of all, Dr.
Smaldone, if there was no other alternative, they could get the
drug under compassionate use, right? I mean, the question that
we are asking today is should the FDA approve this drug as a
drug to be used by all patients in colorectal cancer, which
would mean that you would want to have some kind of--I mean,
that's why we do trials, is to make sure that the drugs work.
And not just on one patient, but at a high level of
percentage, and what I am asking you is a pretty simple
question. You felt that 13 percent was adequate.
Ms. Smaldone. Not only did we feel, but this was reviewed
with many experts, and that was thought to be an important
response rate in this particular setting of metastatic
colorectal cancer, where really a response rate at this point
in time of something of that magnitude is really unheard of.
Ms. DeGette. Mr. Chairman, excuse me, but I am out of time.
I just want to say, Mr. Chairman, that I think something else
for us to look at here is how a company could be so dead sure
of the efficacy of a drug to put a commitment of $2 billion in,
and then only a few months later come back in January and say,
oh, we reexamined the data, and we found it very, very
defective. That is a mystery to me.
Mr. Greenwood. The Chair recognizes Mr. Stearns of Florida
for 5 minutes.
Mr. Stearns. Thank you, Mr. Chairman. There was a 1993
article in Barrons, and it talked about some of the loans that
you folks made, and it said that ImClone loaned Sam Waksal
$70,000 and gave him a miscellaneous cash advance of almost
$90,000.
And the loans in advance were repaid with interest, but the
following year another loan of $117,000 non-interest bearing
cash advance was made to him again. And then in the end, 9
months ending December 31, 1992, the company loaned him another
$275,000.
These loans of course were on top of his salary and
bonuses, and made him one of the best paid biotech CEOs. Now,
according to Barrons, because of failed business ventures,
Waksal needed the money to renovate his apartment, where he
featured a collection of modern art and ancient relics.
And when Barrons raised the question of the issue of
borrowing, your chairman, Robert Goldhammer, disclosed a new no
loan policy. He said the money is paid back, and would not be
loaned to him again. So it is a historical event, rather than
an ongoing one. But according to the SEC's filings, your
company continues to make personal loans, and no interest cash
advances to Sam Waksal over the last several years. So the
question is are you continuing to make loans, and did Mr.
Goldhammer not tell the truth about his no loan policy, or did
you change it again, and what is the policy today?
Mr. Harlan Waksal. Well, I can speak about the policy
today, and I think it is critical for you to know that the
company has appropriate governance in place that loans to
officers will not be made.
There are certain circumstances that will allow monies to
be--promissory notes to be given. For example, stock option
types of exercises, which is part of the stock option plan, as
long as one can support the ability to pay it back.
Mr. Stearns. Well, Barrons is talking about the personal
loans, and it was said back in 1992 that we will not do this
any more the chairman said, and so now you are saying that it
is a policy now of no personal loans; is that what you are
saying today?
Mr. Harlan Waksal. As the president of the company, I am
telling you that there will not be further loans to officers of
this company.
Mr. Stearns. Okay. But you understand that they were done
in the past, even after Mr. Goldhammer said that we won't do it
any more. Isn't that true?
Mr. Harlan Waksal. I don't know the context of the
interview, but I do know that loans were given after that
comment was made.
Mr. Stearns. Okay. At the time that you and your brother
granted millions of more options in 1999, weren't you and your
brother trying to sell the company?
Mr. Harlan Waksal. Many times during the course of this
company, in 1998, 1999, 2000, we met with a variety of
companies, and entertained possibilities of ventures, including
mergers and acquisitions.
Mr. Stearns. Okay. At the time that ImClone accelerated the
vesting of these options so that they would vest if the stock
price climbed, wasn't ImClone trying to sell a majority equity
interest in publicizing its attempt to get FDA approval?
Mr. Harlan Waksal. Well, no, sir. Actually, the stock
options that were granted, the stock option itself was one that
was triggered by increases in stock prices. The incentive was
based on an increase in stock price.
The company at the time was having discussions, and it
wasn't as if we were----
Mr. Stearns. Did you change the policy? I don't think in
the original policy it was set up that way?
Mr. Harlan Waksal. Not to my knowledge.
Mr. Stearns. Okay. At the time that you and other ImClone
insiders got millions of dollars in loans from ImClone in mid-
July, weren't you deep in negotiations over the tender offer
with Bristol, and it was clear that the premium price for
shares tendered would be $70 when it was trading at $50?
Mr. Harlan Waksal. We had a discussion on this earlier, and
indeed, as I pointed out, my exercise of the stock at that time
was based on my belief and faith in the company.
I was able to tender into that offer with a conditional--
with just using my stock options. I didn't need to exercise
those stocks. In fact, one that did was it raised money for the
company because the monies weren't borrowed. Although I had a
promissory note, they were repaid to the company.
And what it did was increase my position in the company,
which I still hold today, quite considerably.
Mr. Stearns. Were other shareholders aware, and did they
have the opportunity to get loans?
Mr. Harlan Waksal. Shareholders, or people with stock
option plans?
Mr. Stearns. Either one.
Mr. Harlan Waksal. It is a part of the stock option plan,
yes. It is a standard part of our stock option plan.
Mr. Stearns. But the shareholders could not get these loans
that you and your brother could get?
Mr. Harlan Waksal. Well, shareholders don't have stock
options, sir. These are stock options.
Mr. Stearns. But the point is that you were able to get
these loans and the shareholders were not, right?
Mr. Harlan Waksal. It was a promissory note. We didn't get
cash from the company. We owed the company money, and it was an
exercise of those options. And, yes, that is not something that
the shareholders can do unless they would have stock options in
the company.
Mr. Stearns. Now, when you get these promissory notes, did
you sign them personally?
Mr. Harlan Waksal. Yes, I did.
Mr. Stearns. And what did you put up for collateral?
Mr. Harlan Waksal. What I had to represent to the company
was my stock, and the stock----
Mr. Stearns. You put up stock for collateral?
Mr. Harlan Waksal. There was no stock transfer to the
company, but I demonstrated to the company where the stock was,
and that it was unencumbered.
Mr. Stearns. Because if I go to the bank, I have to put up
either collateral or I have to sign personally?
Mr. Harlan Waksal. I signed personally and I needed to show
to outside counsel, as well as counsel of the company, my
ability to use my stock to repay that loan.
Mr. Stearns. So the collateral was the stock?
Mr. Harlan Waksal. Yes, it was.
Mr. Stearns. On a promise that it would go to X, Y, Z?
Mr. Harlan Waksal. No, sir, it was on no promise of
anything. This was a non-recourse promissory note. They could
ask for it back and it had nothing to do with stock price. In
fact, if I had chosen at the time to go out and to sell my
stock, at where it was trading at $42 a share, I could have
done so.
Mr. Stearns. And this is the last question, Mr. Chairman,
and I will let you go. Is the advantage of a tender offer that
it allows the largest shareholders to sell massive amounts of
stock in 1 day without the disruption caused by day to day
selling to work off a block of shares?
Mr. Harlan Waksal. No, I don't believe that at all. I think
the benefit of a tender offer is to make sure that all
shareholders can equally participate if they choose to in an
opportunity to divest whatever percentage of shares that would
be.
Mr. Greenwood. The Chair thanks the gentleman. We are just
about to dismiss you, and I have one quick line of questioning
for Mr. Waksal, and I would have preferred to ask these
questions of your brother were he willing to testify.
Do you have the same secretary that he had when you took
over as CEO? Do you have the same secretary as your brother had
on at least the 27th of December?
Mr. Harlan Waksal. I have a different administrative
assistant. However, the administrative assistants are now part
of a corporate office that I have established to administer to
the other senior people in the company.
Mr. Greenwood. I think you have in front of you a phone log
from December 27, and of course the committee has been
interested, as the SEC has, and others, in who knew what that
might have been inside information.
And this shows--and I am just looking at some of the names
and some of the messages that might have had something to do
with the selling of shares. Carl Icon called at 11:05. A Mr.
Weissbroad--do you know who Mr. Weissbroad is?
Mr. Harlan Waksal. Yes, I do.
Mr. Greenwood. Who is he, sir?
Mr. Harlan Waksal. I believe he is a fund manager.
Mr. Greenwood. Okay. He called regarding shares. Bob
Cicuchi; do you know who he is, sir?
Mr. Harlan Waksal. I do not.
Mr. Greenwood. Okay. Martha Stewart. Something is going on
with ImClone, and she wants to know what. She is on her way to
Mexico, and staying at Las Ventanas. Jarrett, and I assume that
is Jarrett Posner, a son-in-law of Sam, called.
Mr. Harlan Waksal. That's correct.
Mr. Greenwood. Do you know from discussions with the person
who made this phone log, or by any other means, whether Sam
conveyed information back to any of these folks about the
status of the company with regard to their refusal to file a
letter?
Mr. Harlan Waksal. I have no information regarding that.
Mr. Greenwood. Okay. And you have not learned from an
administrative assistant or secretary, and whether any of these
calls were returned?
Mr. Harlan Waksal. I have not. The only information that I
have heard is what has been really in the press, and otherwise,
I am not familiar with any calls being returned or the kind of
calls.
Mr. Greenwood. Was your brother, Sam, in the office that
day?
Mr. Harlan Waksal. I believe so, but I would have to tell
you that I was in Colorado at that time, and so I can't tell
you absolutely.
Mr. Greenwood. Well, did you speak with your brother on
that day?
Mr. Harlan Waksal. I did.
Mr. Greenwood. And where was he when you spoke to him, or
where did you reach him?
Mr. Harlan Waksal. I don't remember. I just don't remember
if I called him or me. It could have very well been at the
office, or on his cell phone. I just don't recall.
Mr. Greenwood. Okay. And you were in contact with other
company officials that day in the office. You called the office
and talked to other folks at ImClone?
Mr. Harlan Waksal. We had a conference call that morning
and certainly we were in discussions during that time, yes,
sir.
Mr. Greenwood. But you have no way of knowing whether any
of these phone calls were returned by Sam or by anyone else?
Mr. Harlan Waksal. I would have no way of knowing that.
Mr. Greenwood. I thank you, Mr. Waksal, and I thank you,
Dr. Lee, and thank you, Mr. Markison, and thank you, Dr.
Smaldone.
Mr. Stearns. Mr. Chairman, I think there has been some
requests to put some documents in the record. Just so the
record is clear, I had asked about the BMS memo of January 11,
2002.
We have a copy here, and I would ask that this copy in its
entirety be placed in the record.
Mr. Greenwood. Without objection, the document will be
placed in the record.
[The information referred to follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Stearns. Thank you, Mr. Chairman.
Mr. Greenwood. The Chair thanks the witnesses for their
patience, and calls our third and final panel, consisting of
Dr. Patricia Keegan, Deputy Division Director, Center for
Biologics Evaluation and Research at the Office of Therapeutic
Research and Review, Division of Clinical Trials Design and
Analysis, at the U.S. Food and Drug Administration; Dr. Richard
Pazdur, Director of the Division of Oncology Drug Products,
Office of Drug Evaluation, Center for Drug Evaluation and
Research, at the FDA; Dr. Lee H. Pai-Scherf, M.D., Medical
Officer, Clinical Reviewer, Center for Biologics Evaluation and
Research, Office of Therapeutic Research and Review, Division
of Clinical Trials Design and Analysis, Oncology Branch, FDA;
Dr. George Mills, Acting Chief, Team Leader, Center for
Biologics Evaluation and Research, Office of Therapeutic
Research and Review, Division of Clinical Trials Design and
Analysis, Oncology Branch, FDA; and Dr. Susan Jerian, M.D.,
Medical Officer, Team Leader, Center for Biologics Evaluation
and Research, at FDA.
Thank you all for your presence, and I thank you all for
your forbearance and patience. You are aware that this is an
investigative hearing, and that it is the practice of this
subcommittee when holding such hearings to take testimony under
oath. Do any of you object to giving your testimony under oath?
[No response.]
Mr. Greenwood. You are also aware that you are entitled
pursuant to the rules of the House and this committee to be
represented by counsel. Do any of you wish to be represented by
counsel?
Mr. Pazdur. Yes. I have my personal lawyer, Stephen
Lieberman.
Mr. Greenwood. Stephen Lieberman is with you?
Mr. Pazdur. Yes.
Mr. Greenwood. Very well. Anyone else? Yes, Dr. Keegan?
Ms. Keegan. I am represented by the FDA General Counsel.
Mr. Greenwood. You are represented by the FDA General
Counsel?
Ms. Keegan. Yes.
Mr. Greenwood. Dr. Jerian.
Ms. Jerian. I am represented by the FDA General Counsel.
Mr. Greenwood. Okay. Anyone else?
Mr. Mills. Dr. Mills, FDA General Counsel.
Mr. Greenwood. And could you name the General Counsel for
us that is representing all of you?
Ms. Keegan. Michael Landa.
Mr. Greenwood. The Chair would note that each of you is
here under subpoena. The Chair would also note that it what we
call a friendly subpoena, and that we felt that it was
important to issue to protect any legal concerns that might
come from your rules and regulations with regard to
confidentiality. Would you please all rise and raise your right
hand.
[Witnesses sworn.]
Mr. Greenwood. Okay. Thank you. And you may be seated, and
I understand that you have chosen not to have opening
statements, but are here to respond to our questions, and we
thank you for that.
TESTIMONY OF PATRICIA KEEGAN, DEPUTY DIVISION DIRECTOR, CENTER
FOR BIOLOGICS EVALUATION AND RESEARCH, OFFICE OF THERAPEUTICS
RESEARCH AND REVIEW, DIVISION OF CLINICAL TRIAL DESIGN AND
ANALYSIS, U.S. FOOD AND DRUG ADMINISTRATION; ACCOMPANIED BY
RICHARD PAZDUR, DIRECTOR, DIVISION OF ONCOLOGY DRUG PRODUCTS,
OFFICE OF DRUG EVALUATION I, CENTER FOR DRUG EVALUATION AND
RESEARCH, U.S. FOOD AND DRUG ADMINISTRATION; LEE H. PAI-SCHERF,
MEDICAL OFFICER, CLINICAL REVIEWER, CENTER FOR BIOLOGICS
EVALUATION AND RESEARCH, OFFICE OF THERAPEUTICS RESEARCH AND
REVIEW, DIVISION OF CLINICAL TRIAL DESIGN AND ANALYSIS,
ONCOLOGY BRANCH, U.S. FOOD AND DRUG ADMINISTRATION; GEORGE Q.
MILLS, ACTING CHIEF, TEAM LEADER, CENTER FOR BIOLOGICS
EVALUATION AND RESEARCH, OFFICE OF THERAPEUTICS RESEARCH AND
REVIEW, DIVISION OF CLINICAL TRIAL DESIGN AND ANALYSIS,
ONCOLOGY BRANCH, U.S. FOOD AND DRUG ADMINISTRATION; AND SUSAN
M. JERIAN, MEDICAL OFFICER, TEAM LEADER, CENTER FOR BIOLOGICS
EVALUATION AND RESEARCH, DIVISION OF CLINICAL TRIAL DESIGN AND
ANALYSIS, ONCOLOGY BRANCH, U.S. FOOD AND DRUG ADMINISTRATION
Mr. Greenwood. And let me begin----
Ms. Keegan. Mr. Chairman, we were wondering if you would be
interested in having us present, or having myself present, some
background on the FDA chronology of this application as it
might streamline your questioning.
Mr. Greenwood. Sure. If you are prepared to do that, that
would be most helpful, please. You are recognized.
Ms. Keegan. I am Dr. Patricia Keegan. I wanted to say that
the application, the IND, for ImClone's Erbitux, was filed in
1994, and that the IND application was filed in order to
conduct clinical studies in humans in the United States with
the FDA.
A number of studies have been submitted to that IND, and in
the late spring of 2000, ImClone contacted us to talk and to
request that we have a meeting to talk about what they thought
were some very promising results with a Phase II study that has
been submitted to that IND, and the study conducted in 1999 as
you have heard.
We agreed to meet and talk about the results of that study,
and we met with the company in August of 2000. The discussion
at that time was centered on whether or not the promising
results that were being reported to us, which was a response
rate of about 20 percent in patients with metastatic colorectal
cancer, with no available therapy, might be sufficiently
promising to warrant consideration for an accelerated approval
based on that end point of that observation of tumor response
or tumor shrinkage.
We discussed at that meeting the adequacy of the trial
itself, and I would say that we concur with the statements made
by Dr. Waksal that that trial was not intended either by
ImClone or ourselves to be a registration or a major efficacy
trial.
And the specific design elements of that trial had not been
evaluated critically by the FDA. At the time of the meeting, we
sat to discuss whether or not the data, which indeed appeared
to be promising based on the report, could be used, or some
portion of the study results could be used.
Also, what the limitations of that data were and what
additional information that the FDA might need to consider
whether or not there might be enough data to submit an
application.
The critical elements of that protocol that we looked at
were that a significant proportion of the patients, close to 90
percent, were purported to have had tumor growth, progressive
disease, while receiving irinotecan therapy.
We understood at the time that there was progressive
disease in the face of at least two cycles of irinotecan
therapy so that the patients had an adequate amount of drug in
order to determine whether or not their tumor would shrink or
would grow.
In addition, patients whose tumors had not shrunk on
irinotecan that were enrolled in the study went on to receive
not only Erbitux, but irinotecan at the same dose and schedule
that they had received earlier.
These design elements were critical in our considerations
because we felt that they were necessary to determine whether
or not the results that were being observed might be attributed
to Erbitux, the addition of Erbitux, or whether we could not
discern that.
And it was on that basis that we felt that the design might
be adequate to assess whether the addition of Erbitux was
causing tumor shrinkage. We also recognized that the design was
not adequate to identify other aspects that were important
here.
And the other aspect was whether or not irinotecan was
contributing to that effect. At the meeting, we discussed
ImClone's perceptions of their drug and how they felt that it
worked. Specifically, that Erbitux would not act alone, but
would only act in collaboration with a chemotherapy drug such
as irinotecan.
And in fact the way that Erbitux worked was to overcome the
tumor resistance to that prior therapy, the irinotecan, in this
case. And that was the way in which it was effective. We have
asked where the data to support that statement might exist. And
the response that we received was that it was based upon prior
other studies conducted in human beings, and animal studies
that were conducted.
And that that data resided currently in the application as
of August 2000. Based on those discussions, we informed the
company that we thought that there might be reasonable promise
to go forward and pursue discussions of a license application.
Subsequent to that time, we conducted an extensive review
of the information in the file, and we reached a different
conclusion from that provided by ImClone, which was that we did
not think that the information currently in the file showed
that Erbitux would not be active by itself.
Our conclusion was that there was insufficient information
to judge whether it would work alone or not, and that the only
way to address that was to conduct an additional trial.
In January of 2001, we conveyed to the company, both by
letter and in a subsequent telephone conversation, that we
disagreed with their assessment of the data in the file, and
that they needed to conduct another study.
The representatives of ImClone did in fact begin another
study that was begun in April of 2001, and that study was
considered critical to provide a critical piece of evidence for
the license application that they were intending to file.
That is the study that I think some refer to as 0141. And
in June of 2001, the initial portions of the license
application were filed and submitted to the FDA, and the last
portion of that application, which was the clinical study data,
was submitted in October 2001 as you have heard.
And I think the rest is obvious to the committee that upon
review of that information, we felt that there were multiple
deficiencies in the application, primarily arising not only
from the inconsistencies and defects in the data and missing
data, but also issues with regards to the conduct of the
clinical trial.
Mr. Greenwood. Thank you. Dr. Keegan, why don't I start my
questioning with you, and I would ask anyone else if you feel
that you can add to her response, please do, or maybe you feel
it is more appropriate to respond.
According to an October 12, 2001 e-mail from BMS chief
scientific officer Peter Ringros to other BMS executives,
Bristol-Myers Squibb executives, which reads, ``I just had Sam
Waksal on the phone regarding the single agent data.
Apparently, it came out at 13 percent, which he feels is half
the C225, plus CPT-11, data. They have informed the FDA, who
were pleased, and confirmed that they would be on for the
February 28 ODAC,'' which is the Oncological Drug Advisory
Committee.
``He reckons that they will be on the market by March. I am
planning to meet with Sam in New York the week after next.''
Did any of you ever get contacted by ImClone about the
results of the study testing Erbitux alone before ImClone
completed its application submission on October 31, 2001?
Ms. Keegan. I don't believe I can recall any contacts
regarding that before the end of the submission.
Mr. Greenwood. Anyone else?
[No response.]
Mr. Greenwood. Okay. Did any of you ever inform anyone at
ImClone that they would be on the agenda for a February 2002
ODAC meeting?
Ms. Keegan. I did not.
Mr. Greenwood. Anyone else?
[No response.]
Mr. Greenwood. Dr. Pazdur, the FDA announced as the
protocol design of the ImClone 9923 is seriously flawed, not
adequate, or well controlled. Are you familiar with the
protocol design?
Mr. Pazdur. That was the original protocol that had
irinotecan, plus CPT-11, plus Erbitux, correct? The original
study?
Mr. Greenwood. Yes.
Mr. Pazdur. Yes, I believe--you are asking for my opinion
regarding that trial?
Mr. Greenwood. Yes.
Mr. Pazdur. I believe that trial was a flawed trial for a
registration trial. It really never answered the question do
you need irinotecan with Erbitux, and that is a critical
question to be answered here.
The whole development of this drug, I think, was one of
very--it put the drug in very serious regulatory jeopardy, and
violated several principles of medical oncology.
First of all, a heavy reliance on pre-clinical activity and
pre-clinical design is based on animals models. We know that
animal models can give us an inclining or a suggestion of where
to go.
But to conduct a whole development plan and a sole
development plan on an animal model is a very risky venture.
Second, they are asking patients to continue a drug,
irinotecan, after they have progressed, or after their tumors
have gotten larger on this.
This violates every principle that I know of in medical
oncology, and in order to do that, you better have very good
evidence that that is the thing to do here before you just go
ahead and do it.
The drug, irinotecan, is a fairly toxic drug, and in the
original registration trials for that drug, there were at least
a 3 to 5 percent death, as well as a 20 percent hospitalization
rate for toxicity related to irinotecan.
Again, if you are using this drug in a relatively
unconventional study after the tumors have grown, it again
points to the need to have adequate confirmation that this is a
thing to do.
The way that this drug should have been developed is in a
randomized trial. If they really believed that you needed the
combination, they needed to do a randomized trial, which is
being done now, looking at irinotecan, plus their drug, plus
Erbitux alone. That would be the correct way of developing this
drug.
Mr. Greenwood. Well, did the FDA share that information or
make that suggestion to ImClone? Did you say to them--I mean--
--
Mr. Pazdur. Could I say just one thing?
Mr. Greenwood. Please.
Mr. Pazdur. I am not a member of the review team, and I am
from a different center here, although my expertise is in
colorectal cancer.
Mr. Greenwood. Okay. What Dr. Pazdur just said was pretty
damming information. He said that this is a risky venture, and
he said that if you really want to get this drug approved, you
should have developed a randomized trial. That is language that
even I can understand.
Did the FDA--do you agree with Dr. Pazdur, and if you do,
is that a recommendation that the FDA shared with ImClone at
any time in this long tortured history?
Ms. Keegan. What I would say is that the company believed
based on data which we didn't find as compelling as they
obviously did, that this drug would not be active on its own.
And if one truly believed that to embark on a large
randomized controlled trial, might not be in the best interests
of patients who got the Erbitux by itself, because one would
enter it with the presumption that none of those patients would
respond, and I think we would all find that to be a disturbing
way to develop the drug if one was truly convinced by the data.
We did not find that data compelling, but we actually
reviewed that data after the fact, after the Phase II study was
completed. Based upon that, we recommended that a randomized
study be performed. The company was persistent in their belief
that Erbitux is not going to be an active agent, or would not
have been an active agent when give alone.
And they requested permission to conduct a small study in
which the premise, the hypothesis, was that no patient would
respond. And if they showed that in a relatively small number
of patients, it could stop the exposure to patients of what
they felt would be an ineffective therapy.
We recognized that could have been a risky approach because
their premise could have been wrong, and in fact it turned out
we believe to be wrong, although I would have to say we have
not yet verified any of the data even in the single-agent
study.
Mr. Greenwood. Given the limited time we have, I had two
more questions of a very general nature. Where did this company
go wrong? Where did ImClone make its gravest errors?
Because what strikes every one of us is that there is this
enormous gap between the buzz on this drug. This is attracting
capital by the hundreds of millions, and this was attracting a
company with the prestige of Bristol-Myers Squibb, and they put
$2 billion on the table.
This was a drug that was touted as the wonder drug or
perhaps the best drug ever developed for cancer, and on, and
on, and on, with highfalutin buzz on this drug, and yet as we
have sat here all day long, what we have seen is a risky
venture.
What we have seen is a dearth of information or we have
seen lots of sizzle, but not a lot of steak here. So that is
what this hearing is all about. How could such a disparity
between the promise made to the patients about this drug, and
the promise made to the investors, could have existed when in
fact just last December this was a fizzling dud?
Ms. Keegan. Well, I think there is sometimes a discrepancy
between the promise as it may sound to outsiders, and to an
oncologist, who would actually find a response rate of 20
percent in patients with no available therapy for colorectal
cancer to actually be something of significance clinically and
medically.
So if that were in fact the case, I think we would find
that probably compelling and that was why we were willing to
listen to the company in August 2001 and when we pursued this.
One of the major deficiencies that I see was in the conduct
of the clinical trial, and in the oversight of the clinical
trial, and in ensuring that the investigators followed the
clinical trial, and that the data that the protocol required to
be collected, was collected, and that the records were
available for review.
I think that was one major deficiency. And as Bristol-Myers
Squibb said earlier, that was a basic expectation of Bristol,
and that was a basic expectation of the FDA that that would
have been done. We did not even discuss that issue. We presumed
that it had occurred, and it did not, and I think that is a
significant failing that none of us anticipated.
Mr. Greenwood. And to what would you attribute that? The
thing that is remarkable about this is that if you tell the
world that you have in your possession the Holy Grail of cancer
treatment, and then when it comes to the conduct of the
clinical trials, you have this half-hazard conduct, the two--I
can't get these two things to compute. How could that happen?
Dr. Pazdur.
Mr. Pazdur. It is called good drug, bad development plan,
and there is nothing that we can do about that at the present
time. For example, we may have a meeting with the company, and
talk to them about a development plan, and they could walk out
of this office and do another development plan if they wish.
I cannot take a gun to somebody's head basically and say
you must do what I say here. Nor do I have any recourse to
publicly address that issue.
Mr. Greenwood. One final question. When the FDA approves of
a drug, it is very, very prescriptive in what you may and may
not say about the efficacy of that drug, very, very
prescriptive. Very complicated labels as to the claims that may
be made.
In the period prior to approval of a drug, or prior to the
refusal to file a letter of disapproval, it seems that the
company can say just about anything. I mean, it seems that the
company has this tremendous latitude to say this drug will
enable you to fly to the moon and back.
The FDA has some pre-market jurisdiction with regard to
such claims, and so could someone help me here with again the
discrepancy between--what I am wondering is does the FDA need
more power to rein some of these companies in, because a
phenomena in which a company pumps up its potentiality to draw
investor capital dollars, and to draw in big players in mergers
and acquisitions, and so forth, they have tremendous power to
do that.
And regardless of whether what they have is really going to
do what it says, and very few investors are going to be able to
understand the complexities of a cancer treatment. So is there
a problem here that the FDA needs to have a little bit more
regulatory ability with regard to the claims that companies can
make while their product is pending?
Ms. Keegan. What I would say is that we actually do have
the ability if we believe that somebody is clearly making false
and misleading statements. But what we don't have are the
resources and the staff to continually monitor for this.
Mr. Greenwood. Well, someone said that some of the FDA
staff were cringing as they were watching 60 Minutes, and so
forth. Were any of you among the cringers watching 60 Minutes?
Ms. Keegan. My personal recollection of that 60 Minutes was
very much like Dr. Waksal's, which is the focus of that meeting
was really on access for patients, and how that was not
equitable. I don't recall a lot about things that made me
cringe in that.
Mr. Greenwood. But what you have said is that if you had
more resources and personnel that you could do a better job of
perhaps making certain that the claims that are made about
pending drugs and other products are reasonably close to
accurate?
Ms. Keegan. Yes. That is actually done by a different
group. I mean, our particular staff are medical officers, and
that is not our function. But if there was better resources in
order to monitor, I don't think we have a systematic program
for doing that. We usually are reactive in that sense if
somebody brings a particular claim, or a particular egregious
statement to our attention.
Mr. Greenwood. Thank you.
Mr. Pazdur. Here again, most of these are made--most of
DDMAC, which handles the advertising, and looks over
advertising of drugs, okay? These claims of pre-approval are
usually press releases, et cetera.
And which I am not quite sure how much DDMAC gets into. But
we have really no regulatory authority over, I don't believe,
of press releases after a meeting with the FDA.
For example, where we could have a very contentious
meeting, and this is not uncommon that our medical officers
then pull something off Reuters News or something like that,
that says that the meeting with the FDA was a very fruitful and
productive meeting, which is exactly the opposite of what it
was. And we have no way to basically counteract that in
essence.
Mr. Greenwood. The Chair recognizes the gentleman from
Michigan, Mr. Stupak.
Mr. Stupak. Thank you, Mr. Chairman. But doesn't the FDA
get concerned when as in Business Week, the first question I
asked today, that this drug was the furthest along of a handful
of new cancer treatments that precisely home in on a growth
signal found in up to 50 percent of all cancer types? Isn't
that an over-hype of the statement?
Ms. Keegan. I am not certain that it is. It is the one for
which we have had a pre-BLA meeting the earliest, and it does
work against the growth factor receptors. So I am not certain
what about that statement that you find particularly
disturbing.
Mr. Stupak. Well, in the cancers that we have heard about
thus far today is colorectal, and I think there might have been
some renal, and there was some questions about neck cancer.
There is more than six times of cancer isn't there?
Ms. Keegan. That's correct. The epidural growth factor
receptor that Erbitux reacts with, and that other drugs are
working on, are found on a variety of solid tumors.
Mr. Stupak. So 50 percent would be a rather misleading
statement would it not?
Ms. Keegan. I think that is where that comes from, yes.
Mr. Stupak. So even though you were in the process of doing
an accelerated statement, you didn't think the FDA as a public
health agency had a right to comment on this?
Ms. Keegan. I am not sure that I am finding it to be as
problematic as you are.
Mr. Stupak. Well, maybe we see it as problematic of all the
investors, of all the patients, and all their family members
who were basically led down the road on this miracle drug that
is going to cure up to 50 percent of the growth in cancer
tumors in the United States.
In fact, after the USA Today article ran, they were
receiving 400 calls a day. I am sure that the FDA must have
received at least one call. I mean, I see that you are
laughing, but I don't find that a laughing matter.
We are having a hearing because if we are going to have
people out there over-hyping their drugs, and the FDA knows
that it is not true, and they don't say anything, how does the
American people, the investors, large and small, know what the
heck is going on here?
And when it shoots up into the top 100 drugs of NASDAQ,
that is a concern here. And we look to the FDA, at least us up
here, and some of us who have been on the committee for a while
at O&I, to at least set the record straight when misstatements
are being made that not only harm people who have cancer, but
also investors, and companies, and individuals who may finally
put their faith in there because they are at a very desperate
stage in their life, especially those who have cancer.
And so I think there is a responsibility here of the lead
public health agency in the United States to at least say
something, and not just write it off as, oh, well, it is just
another hype story.
Ms. Keegan. I'm sorry. I smiled because you said you
figured that the FDA got at least one phone call, and I am
certain that we got way more than one following the publication
of that.
I completely agree that it is extremely unfortunate when
this information is provided and when cancer patient's hopes
are raised. I would say that particularly for pre-market
applications that we don't always have all the information in
hand, and we rely on the investigators who are publishing
results, and on the company who are providing summary data to
provide accurate information.
And we don't always have all the information available to
know if every statement being made is true or false, and we
certainly don't have the resources to review every statement
made about every drug in the pre-market phase and determine its
accuracy.
Mr. Stupak. We are not asking for every statement or every
press release to be reviewed. It's just that in your area of
expertise of cancer oncology--I mean, you are looking at a drug
here which is the second most prevalent--I'm sorry, a cancer
that is the second most prevalent, and probably one of the most
deadliest.
And I think that there is some responsibility there for the
FDA to at least when they see, whether it is 60 Minutes, or USA
Today, or Business News, to at least say something to inform
the public. After all, it is the public that you are supposed
to keep foremost in your mind.
Let me ask you this. Fast track. Is it used only for life-
threatening drugs, or is it used for drugs where there is an
unmet medical need?
Ms. Keegan. It should be used for both those conditions;
either life-threatening, or serious disease where there is an
unmet medical need.
Mr. Stupak. And fast track has been around since Congress
granted it in 1997. Has any other drugs other than cancer drugs
where fast track has been used to get cancer drugs up there?
Ms. Keegan. I don't know the history of all the others, but
I would guess that there are some other drugs that have been
evaluated, and AIDS would certainly fall in that
classification.
Mr. Stupak. So AIDS would be one of them. Dr. Pazdur, are
there any others?
Mr. Pazdur. I was just going to say AIDS is the most common
one now.
Mr. Stupak. And that was the one that really spurred the
1997 amendments to PDUFA?
Mr. Pazdur. Yes.
Mr. Stupak. All right. There was a pre-meeting of your
August 2000 meeting with ImClone, and in the pre-meeting, the
primary FDA medical review officer indicated her reservations
concerning the 9923 study, and that is Dr. Jerian. Is that you?
Ms. Jerian. Yes, that's me.
Mr. Stupak. Who is part of this team that met in August of
2000 with ImClone?
Ms. Jerian. This the IND Review Team, which would typically
consist of the clinical reviewer, the oncology reviewer, often
including the supervisors of those reviewers, and the
regulatory project manager. And at times also including the
product reviewer.
Mr. Stupak. So your recommendation that this not be--or at
least your reservations, that was shared with everybody was it?
Mr. Jerian. I shared my opinion about the request of the
sponsor at that meeting.
Mr. Stupak. At the meeting?
Mr. Jerian. At the pre-meeting.
Mr. Stupak. And then you had the meeting of August 11,
correct, with ImClone?
Mr. Jerian. Yes.
Mr. Stupak. And you were there?
Ms. Jerian. Yes.
Mr. Stupak. Okay. What transpired and did you change your
mind about those reservations at this meeting?
Ms. Jerian. I did not change my mind.
Mr. Stupak. Okay. How then was this allowed to proceed then
if you did not change your mind? You are the medical officer,
and you are the person who is primarily responsible for
overlooking this application, or this request for fast track;
is that not correct?
Ms. Jerian. I am the primary medical officer, and I report
to my supervisors, and my supervising medical officer at that
time during the meeting felt that a different approach would be
appropriate.
Mr. Stupak. Okay. Just one person thought that, your
supervisor, or did everyone thing that? Obviously, you didn't,
but I mean, did the rest of the people there think that?
I guess I am trying to figure out how did this come about?
I mean, you are at a meeting, and you have this memo or pre-
meeting at which yo decide that they have to go a long way to
convince us.
And you are in the meeting, and you are the primary medical
review officer, and they have not convinced you, but somehow
they get this application to go forward.
Ms. Jerian. If I am in a meeting with a sponsor, and my
supervisor has made a decision, that person is my supervisor,
and I defer to them.
Mr. Stupak. Okay. So is the decision made upon review of
medical or new medical evidence, or just upon hierarchy?
Ms. Jerian. I would have to defer to my supervisor to
answer that question, because it----
Mr. Stupak. Well, let me put it like this. Was there new
medical evidence submitted on August 11, which would change
your opinion?
Ms. Jerian. In my recollection, there was no new medical
evidence based on my review.
Mr. Stupak. Well, your supervisor was Dr. Keegan then,
right?
Ms. Jerian. That's correct.
Mr. Stupak. So then, Dr. Keegan, why was the medical review
overruled if you will, or the supervisor overruled the
decision, or the medical review officer's indications?
Ms. Keegan. I would attribute it to a difference of opinion
in looking at the information. It was my assessment that a drug
that is purported to give an approximately 20 percent response
rate in patients with refractory disease was something that
should be evaluated further.
And we should provide guidance to the company on the kinds
of information, and the way they should go about providing
evidence to the FDA so that we could consider that and review
the data.
Mr. Stupak. So before August 11 then, did you review the
medical evidence that had been submitted?
Ms. Keegan. I did not review the entire file. I reviewed
the pre-meeting package, which was provided to us, which was
the summary data.
Mr. Stupak. And in that pre-meeting documentation, it had
Dr. Jerian's recommendation that we not move forward with this,
correct?
Ms. Keegan. Could you repeat that?
Mr. Stupak. Sure. You said that you reviewed the pre-
meeting documentation, and you read some of it, and there was a
summary, and I expect that would include Dr. Jerian's
recommendation that you not move forward with this?
Ms. Keegan. Dr. Jerian's recommendations were really
verbal. We had a meeting, a discussion, for which there were no
minutes kept, and I think the handwritten notes were really her
assessment written down, but there was no formal memo written.
I think it was just the discussion of the review team.
Mr. Stupak. Okay. Well, her memo, and her notes from the
meeting, state that ORR, overall response rate, equals 15
percent clinically significant for colorectal track--I'm sorry,
for colorectal CPT-11 failure, correct? That is one of her
concerns, right?
Ms. Keegan. Yes.
Mr. Stupak. Is that correct?
Ms. Jerian. May I clarify?
Mr. Stupak. Sure.
Ms. Jerian. I believe what you are reading from, although
it would help if I could see the document, are the questions
that the sponsor was asking of us.
Mr. Stupak. Okay. And then there is another one that says
CP02-9923, and that is the protocol that we are talking about,
meet accelerated approval criteria in fast track, and then
after that it says no. So that would be from your notes, right?
Ms. Jerian. Those are from my notes, yes.
Mr. Stupak. Okay. So was it the 20 percent then, because
the medical review officer was saying 15 percent; and is it the
20 percent that was in that you decided that we should shoot
for?
Ms. Keegan. Well, actually, it was the precedent that has
been set by the approval of the irinotecan, which was approved
on an overall response rate of 13 percent.
And if 13 percent was sufficient to approve irinotecan, it
is hard for me to believe that we should judge a much higher
standard for Erbitux.
Mr. Stupak. Sure. Irinotecan was a single agent?
Ms. Keegan. That's correct.
Mr. Stupak. And also demonstrated life expectancy, correct?
Ms. Keegan. Not on the original approval. The original
approval was based only on response rate information in
patients who had failed the available standard therapy. So the
setting was very similar in the question being addressed to us.
Mr. Stupak. Okay. Well, is it fair to say then that you
were mislead on the single agent idea that was put forth?
Ms. Keegan. By ImClone?
Mr. Stupak. Yes.
Ms. Keegan. I felt that when they told me, or when they
told the group at the meeting, that the information in the
application would satisfy us, that we would find that
compelling and convincing, I felt mislead personally.
That may be a difference of interpretation. They certainly
seemed to very much believe that even after we told them that
we didn't concur with that assessment.
Mr. Stupak. So you told them that you didn't concur with
that, but they insisted that they could prove this to you on
this single agent? You have to say yes or no.
Ms. Keegan. I'm sorry, yes. They felt that they could. They
felt very strongly that--and they represented to us, to the
point of saying that they felt that it would be unethical to
conduct a single agent study, and that is where we felt we
could not agree with that statement, and why we told them they
should do a study.
Mr. Greenwood. The gentleman's time has expired. The Chair
recognizes the gentleman from Kentucky, Dr. Fletcher.
Mr. Fletcher. Thank you, Mr. Chairman, and certainly I
thank you all for coming. It has been a long day for you, I'm
sure. Let me just ask first, and I guess Dr. Keegan, this would
be probably addressed to you.
But was this the first clinical drug trial or request for
approval of a particular agent from ImClone to the FDA?
Ms. Keegan. They have a number of studies in development
programs in other cancers, and we had been talking about other
development programs. But this was their first approach with a
completed study sent that they felt might be reasonable to
consider for accelerated approval.
Mr. Fletcher. Does the FDA, who works with a lot of
companies, many like Bristol-Myers Squibb, who had extensive
experience with the FDA, and given that, does the FDA have any
protocol for new, relatively small, companies that come out to
assist them to make sure that they comply with the protocols
that they are adequately informed as we go through this
process?
Ms. Keegan. No.
Mr. Fletcher. Do you think that would be helpful?
Ms. Keegan. I am sure that it would be helpful to the
companies. I am not sure how we would accomplish that given our
current resources.
Mr. Fletcher. Let me go back. I believe you were here and
you heard Dr. Waksal talk about--and I guess you reported that
the discipline of the clinical trial was poor.
And yet we are dealing with the premier institutions in the
United States, and probably the premier in the world, and how
does that occur, and have you seen this before?
Ms. Keegan. I would say that most protocols have a very low
rate of protocol violations, but I have never seen a perfect
study. The number of deviations in this protocol was out of the
norm in my experience, and it exceeded what we expected
certainly.
Mr. Fletcher. Dr. Pazdur, do you have any comment on that?
Mr. Pazdur. Yes, I do. I have been an investigator for
almost 20 years before I joined the FDA at the Anderson Cancer
Center, and I have done work in colorectal cancer.
The issue here is the supervision that a pharmaceutical
company has to give the sites, and there has to be a fairly
frequent auditing of the data by qualified auditors either from
the company, or from a CRO, a contract research organization.
I don't know if this was in place since I was not involved
with this study, but it is not just the institutions. There is
obviously people that are there and variations in the
investigators in any institution.
But the overall supervision of a study is the
responsibility of the company, and there has to be some type of
careful auditing plan. Usually a periodic audit of the data on
a monthly, or bi-monthly, quarterly basis, would have caught
some of these errors.
So they would not have been problematic and this data would
not have been submitted in such poor quality shape here.
Mr. Fletcher. My understanding is that clinicians do not
deviate from requirements based on their best judgment, and
that the patient is eligible for the study. Is that a legal
requirement?
Ms. Keegan. All the investigators who conduct studies under
IND sign a statement, a government form, called a 1572, in
which they agree to basically conduct the study according to
good clinical practices.
It is not enumerated in that, but it basically is a
statement that they will adhere to their obligations as a
clinical investigator. In that sense, it is a legal
requirement. I am not certain that every physician who signs
that form understands that, but it is a legal requirement, and
a form that they are to sign.
Mr. Fletcher. Dr. Pazdur, you obviously participated in
this. I have been a participant somewhat as a clinician, and
more of referring patients, and kind of following them along
and training, but we were pretty strict on that, because it is
your reputation at stake. And what happened here?
Mr. Pazdur. I don't know. I don't know. You are entirely
right. When you have a protocol, and it specifies the
eligibility criteria, a competent investigator should follow
those eligibility criteria. It is not a game of chance here.
If it says that a BUN has to be such and such value, then
it has to be that value, or less, or greater than a particular
value. It is not left up for the judgment of the investigator.
Mr. Fletcher. Well, there is one patient here, Patient
Number 20635, that received the irinotecan for a certain period
of time, and there was no CAT scan to evaluate the response
during this period. It indicated that as a matter of fact that
the CAT scan report on one cycle of the drug that we are
talking about showed that the patient had no metastatic disease
at all.
And the question is was this a miraculous cure, or was
there any metastatic disease at the very beginning, and that is
just very troubling. There is something called a special
protocol assessment, and----
Mr. Pazdur. But could I just--I think what you are pointing
to and getting at is that it is sloppy work.
Mr. Fletcher. Well, that's it, and I have the utmost
respect for our institutions of health care in this country,
even though a company has the inexperience, and that's why I
wanted to ask you about this special protocol assessments.
Is there a mechanism that when you have a company that may
have an excellent product, and some very brilliant minds that
have developed something, that as they bring it to the FDA that
there is some assurance that there are some special protocol
assessments that are done to ensure that they are following
this protocol?
Because that is in the interests of the patient, and I
realize that there is staffing limitations, et cetera.
Mr. Pazdur. The special protocol assessment isn't to follow
a protocol or to audit it as you are suggesting. What special
protocol assessments are, are basically we have a meeting with
the company, an end of phase two meeting, where we discuss
their pivotal registration trials.
Those trials, the written protocol is then sent to the FDA.
That protocol is then reviewed in detail. The statistical plan
is looked at, and the eligibility plan is looked at. The
treatment plan is looked at. They then get a written letter
back from the FDA with what the FDA would like to see in the
protocol, and what the company would like to see in the
protocol. A meeting of minds is had there, and an agreement on
a final protocol is established.
The meaning of a special protocol assessment then is that
the FDA cannot deviate from its agreement with the company on
that unless there is an overwhelming new medical discovery that
comes along, or new medical situation.
So it locks the FDA and the sponsor into an agreement, and
that has to be so that the FDA does not have the complaint that
we are arbitrary and capricious in our decisions, and in our
review, and we said this at one time, and we said something
else at another time. It locks us into an agreement.
Mr. Fletcher. Let me ask a couple of other questions. One
is do you think--I mean, these are patients where we have to
understand from a clinical standpoint that you are dealing with
patients who have no other hope.
So there is a strong desire to give them some hope, and if
a clinician sees that this medication--I just came from a
patient who had a response to this, and it is promising,
certainly there would be a great deal of pressure to make sure
that this individual was eligible.
You are dealing with real people, and you are dealing with
hope where there is no hope. So do you think that influenced
the discipline, or the lack of discipline that we see in this
study or not? Including the hype about the effectiveness of
this drug.
Mr. Pazdur. Possibly, but we see that in other areas, and
that doesn't account for really sloppiness to be honest, and to
really evaluate the situation.
There are other mechanisms to avail the patient to
therapies, rather than trying to get them in to the protocol in
an artificial fashion, and those include a compassionate use
program, expanded access program, et cetera.
Mr. Fletcher. So that is not an excuse for not complying?
Mr. Pazdur. It should not be.
Mr. Fletcher. Because actually in the long run from what I
understand, you would discredit the trial, which would hurt
patients in the future, which is exactly what happened here.
Dr. Keegan, let me ask you something.
We have this disparity, in the sense that as a trial is
being done, a company has the ability to issue press releases
and with the result in this situation of producing a lot of
enthusiasm about a drug that may be overstated and maybe not.
But in this case, you all are setting--and I think the
chairman mentioned this, you are there watching this happen,
and yet one of the requirements or restrictions on the FDA of
speaking up when you see this going on, especially--and, Dr.
Jerian, you mentioned that you had some concerns about the
clinical trial as it goes on.
I mean, are you all restricted from coming out and saying
anything? What kind of restrictions do the regulations have? I
know that there is some proprietary information that you have
that you can't disclose, but what are the restrictions on you
all speaking up as you see this disparity of a lot of hype that
went on in the ImClone situation?
And do you have a protocol on that? I mean, how do you all
deal with this?
Ms. Keegan. I don't know that we have an absolute standing
operating procedure that is written. If we were to see
something very disturbing in the Center for Biologics, because
we have a slightly different administrative structure, we would
refer our concerns to the advertising and promotional labeling
branch, and say we have some concerns about this.
And to the extent that we have in our hands the facts and
can document that the statements are untrue, and the statements
are very egregious, it is possible that the advertising and
promotional labeling branch could write some sort of letter to
the sponsor indicating which statements we object to and which
we think are false and misleading.
I think we are often hampered in the pre-marketing setting
by, one, not actually having the facts and the raw data, and
not being able to tell how far off the mark they are, and the
others might be ones of semantics. If someone says interesting,
it is hard to say that is a misleading statement.
Mr. Fletcher. In this situation, and I know that the August
meeting of 2000 requested fast track, and you felt like the
trial was adequate at that time given the fact of a 23 percent
response. You didn't feel like a randomized trial was necessary
at that time because you didn't want to deprive patients from
the medication, and we can understand all of that.
But as things started to unfold did you all become more
skeptical of this, and if you did, how much communication was
there where you picked up the phone and said, Sam, I think you
all are overselling this thing, and you might want to back off?
Ms. Keegan. I would say that I think that a reviewer, or an
individual could feel that they could make those statements to
a sponsor, but that would not carry the same weight as coming
to--as a letter or some other action.
However, I think again that the situation was in somewhat a
state of flux at the time, particularly during the review as we
were just becoming aware of some of these.
And I think that we have spent our focus on assessing the
application and not on monitoring the statements that were
being made publicly. At least I would say for myself that I
really don't on a regular basis review the press releases and
the clippings, because I have other things that occupy my time.
Mr. Fletcher. Mr. Chairman, I certainly appreciate the
opportunity. Thank you very much, and thank you all.
Mr. Greenwood. The Chair thanks the gentleman. Dr. Mills,
when did you come to the realization that the deficiency in the
ImClone application were too great and that a refusal to file
letter would be necessary?
Mr. Mills. At the standpoint that there were a number of
points, where we were talking with ImClone and discussing
elements that we found in the submission which were defective.
By November 30, where we had a telecon with ImClone, and
discussing some additional elements on that day.
At that time, the number of defects that I had discovered
with Dr. Lee Pai-Scherf, such that we both came to the
conclusion in that telecon that we felt we needed to recommend
to our group that it was time to consider a refusal to file.
When we had just come out of that telecon, we briefed Dr.
Keegan at that time, and we gave her the information. She
certainly understood our concerns, and she certainly felt that
we needed to provide the documentation to her because we were
just coming out of the telecon.
In the course of the following week, it was arrived that we
were going to refuse to file, based upon that information that
we had discovered in the course of the review, and the filing
issues.
Mr. Greenwood. Did you have a meeting on December 4 with
Lilly Lee?
Mr. Mills. That is correct.
Mr. Greenwood. Okay. Now, you were here for her testimony?
Mr. Mills. Yes.
Mr. Greenwood. Would you characterize that meeting in terms
of the likely, or how you presented to her the likelihood of
various outcomes, because it seemed to me that she was saying
that what she came out of that meeting with was that, well, we
could get a green light, or we could get a red light, or we
could get a yellow light.
The odds are relatively equal that we could get any of
those outcomes. How would you characterize that meeting?
Mr. Mills. I characterized it with Dr. Lee very carefully,
that there were indeed four options that could occur. I wanted
to maintain a very even balance, while I knew that my
recommendation and Dr. Pai-Scherf's recommendation to Dr.
Keegan a couple of days before was that we should refuse to
file it.
I also knew that we had not arrived at that decision as a
group, and so, I presented to her in the discussion as it came
up, would there be a potential that there would be a refusal to
file? I went over the four potential options.
Mr. Greenwood. Did you tell her that you had recommended to
Dr. Keegan that there be a refusal to file?
Mr. Mills. No.
Mr. Greenwood. Why not?
Mr. Mills. From the standpoint that that was an internal
communication. I did not feel that it was appropriate. If I
told her my recommendation at that time, then that would be
disclosing information that was informal at that moment with
Dr. Keegan one is the supervisor.
Dr. Keegan's decision is what is going to hold the weight.
As any of your staff would make staff recommendations from time
to time, but you in your situation have to come to that final
conclusion.
So I would not disclose to her my internal recommendation,
which was still based upon developing information. When I am
still in the midst of doing the filing review, I may find
additional information which may sway me back.
At this time, though, I knew that I had that concern, that
recommendation, but I wanted to be sure to present to her all
of her options, and not to overweigh any of the options because
I did not represent the entire organization at that moment.
Mr. Greenwood. Did she specifically raise the question or
ask the question are we going to get an RTF?
Mr. Mills. That is my recollection of that conversation.
She did ask that question.
Mr. Greenwood. But you did not assign any probability to
that?
Mr. Mills. No, I did not. I told her and I explained that I
could not. That it was the matter of our internal group
discussion, and we do have a BLA review committee that is
operational here. We also have our own internal organizational
structure, a matrix management, where we discuss this and
arrive at that type of decision.
I, again, reviewed the four options that could occur from
this point, but I was careful to maintain an even weight to
them because we had not yet arrived at a decision.
Mr. Greenwood. When the RTF letter came out, it had four
concerns I think raised about the--well, four reasons why the
RTF letter was given. Were those reasons shared with her? Were
those concerns that eventually found their way to the RTF
letter?
Mr. Mills. Often----
Mr. Greenwood. Were they shared with Dr. Lilly at that
time?
Mr. Mills. I want to be sure in terms of what we were
sharing at that time, because it was an ongoing process. It is
December 4, and we are going to go to December 28. So issues
are coming in as we go.
There was a stream of communications between Dr. Lee, Dr.
Pai-Scherf, and myself over the course leading up to December
4. Most of those issues that I was raising with her related to
the review of the CT scans and the independent review.
I had carefully documented those and made sure that ImClone
was aware of them, and that they were able to give me full
input, and to make sure that I was correct in my assessments
that these were defects and that they were going to need
repair.
In each one of those cases that I had raised, we had
communications back from Dr. Lee in the documents that we
presented to the committee that indeed that she had agreed, and
that they were going to need to be repaired.
Mr. Greenwood. By December 4 was it clear to you and was it
conveyed to Dr. Lee that more studies would be necessary?
Mr. Mills. I don't know whether I could determine that more
studies would be necessary. But, indeed, it was quite clear
that the independent review committee was going to have to be
brought back together, and the CT scans were going to have to
be reviewed, and that they were going to have to be
reassessed----
Mr. Greenwood. I am referring specifically to a single
agent study.
Mr. Mills. The single agent study had come in and I believe
that we actually had the result come in, and while I have heard
December 4 throughout, I believe I knew about that result on
December 3.
But that she was aware of that result, and from the
understanding that I had, that that was a remarkable piece of
information, inasmuch as it had originally been purported to me
that Erbitux alone was not going to show any responses.
Mr. Greenwood. And finally in retrospect, and in looking
prospectively to future applications, one of the things that is
particularly troubling about this matter is that this drug
had--that it may still hold great promise; great drug, bad
study, as Dr. Pazdur said.
Mr. Mills. Yes?
Mr. Greenwood. It had such a hard landing, and when a drug
has a hard landing like this, and the stock goes into a free
fall, and investor confidence crumbles, and patient confidence
and hope crumbles, and so forth, could that have been avoided,
and should that have been avoided by the FDA at a date like
December 4, saying, look, you might have had this conversation
with Dr. Lilly.
You might had said, look, I am going to tell you something,
I have recommended an RTF You may want to--I think that is what
is likely to happen. I can't be positive because it is subject
to review. But you folks may want to pull back and withdraw
your application now, and work on some of these things.
And come back with this when you are ready so that your--
because you know when an RTF letter comes out, it is a
relatively unusual thing, and you know that the impact that is
likely to have on the product with such enormous expectations,
and this sudden and hard, and devastating landing for the
product.
Would it not have been better had you done what I
suggested, and that is offered them the opportunity to withdraw
their application, and work on it, and come back later to avoid
this relatively public embarrassment?
Mr. Mills. From the standpoint of the four options that I
discussed with her, the fourth option that I was clear to
remind her of, that in view of the single agent study, Erbitux
alone, the result had just come in, plus the findings to date,
which showed a number of things that were going to need to be
repaired, and which she agreed to already, that ImClone always
has the option to withdraw, and to be able to come back and
represent this data. So there were three options that were
available to the FDA, in terms of the review, and the fourth
option was there with ImClone.
While I made sure that the balance was there, it was
remarkable for me at that moment in time, half-way through the
review cycle for filing purposes, to be able to tell a sponsor
that that is a consideration, and you should consider it in
view of everything that you know to date, and especially when
you decided, as she had, to come down independently that day
unannounced prior to an e-mail coming from her on the train
that she would like to meet with us, and that she had had that
much concern.
Mr. Greenwood. Well, I might question whether in fact your
presentation should have been so balanced, when in fact the
likelihood in your own mind was that those were not equally
likely outcomes.
Mr. Mills. Well, from that standpoint here, I fully
understand your question. Please bear with me, in terms of
understanding that I was only halfway through the filing
assessment, and I still had to present all of my data and to
get confirmation from my organization.
I don't think you want, necessarily, a medical reviewer
independently deciding to tell any sponsor that their drug
should be withdrawn halfway through the filing, necessarily,
without full coordination with the rest of the agency.
And while I might think that my opinion is the opinion, it
is an organization that is a matrix, and there are a number of
people who have input.
Mr. Greenwood. Well, when the team made the decision the
next day to go to the RTF, and then there was nearly 3 weeks,
or about 3 weeks went by before they got their letter, you did
have the opportunity to assertively contact the company and say
I am now not compelled to give you such a balanced review, but
to suggest to you strongly that your options have narrowed to
two; withdrawal or an RTF.
And I would ask the question, Dr. Pazdur, how would your
side of the shop have handled it?
Mr. Pazdur. I think that you really hit upon a very
important point here, and that is that there is a high degree
of inconsistency on how the agency communicates with sponsors.
And I think that maybe this puts a spotlight on it. And a
lot of it has to do with personal preference of the director of
the division, for example, and I can't really speak for what
goes on in CBER.
For a refuse to file, for example, that we had recently, we
took a look at the data, and within 1 week we realized that
they forgot to collect an important element, the duration of
responses.
So I called up the sponsor and said no way this is going to
make it. I am not going to waste our resources reviewing a
document when you know that you have a fatal flaw here. Why
don't you withdraw it, and you are going to need a new study.
We have meetings before an application comes in and
frequently if I realize that there is a fatal flaw in the
application, why not address it up front with a sponsor and say
don't even bother submitting this.
I don't want to waste our review time, our resources. It
takes one medical officer on a priority review 6 months
basically full-time, and if you already know on a priority that
there is a fatal flaw here, why bother going through the
mechanics of a review.
So I think in essence that there is a high degree of
variability from one division to another. For example, even on
non-approval letters, with some companies we may call them up
once we have reached that decision and say you have the option.
Do you want a non-approval letter or do you want to withdraw
the application, and here again there is not a consistent
approach within the agency dealing with this, and I think it is
a very important element that needs to be addressed.
Mr. Greenwood. Dr. Keegan, do you want to say something?
Ms. Keegan. Yes. I would agree with Dr. Pazdur that if at
the time that we met with the company on a particular product
that we felt that there was no way that we were going to be
able to approve--for example, if we knew that the major end
point of the study, that the primary goal of the study had
failed, and that they had not shown what they had intended to
show, we would tell a company and that we considered this to be
a negative study, that they should not file it and they should
not even attempt to submit an application. I think the
circumstances here are a little bit different, in that some of
the flaws only became available to us as we reviewed the
application. And there is a difference in approach here.
We have not to my knowledge in the Center for Biologics in
our office called up the sponsor and said we are going to
refuse to file this application. Do you want to withdraw.
I think we don't do that for several reasons and I can't
speak to all of them because we haven't actually gone through a
major discussion, but one consideration would be that such a
phone call might to some extent be considered coercive; to call
up a company and say do this, and if you don't withdraw, we are
sending you this letter. It is a consideration that some people
might----
Mr. Greenwood. I don't know. I think if someone said to me
that you can step off the scaffold, or we can pull the trap
door, I think I would like to exercise my options. The
gentleman from Michigan.
Mr. Stupak. Well, thank you. Along those lines then, if
ImClone had the inclining that they might get an RTF, did they
ever call and ask can we withdraw our drug until we submit
further documentation?
Ms. Keegan. I was never contacted with a request like that.
Mr. Stupak. Was anyone?
Ms. Keegan. And I don't know of anyone who was.
Mr. Stupak. And like the FDA, and instead of them taking
the positive approach, or however you want to look at it, the
approach that maybe you should withdraw, the company also could
have requested a withdrawal before that December 28 RTF came
out, correct?
Mr. Mills. I had advised them on December 4 that that was
their option, and reminded them that is an option that they can
exercise. Let met emphasize that on December 12 that we had a
follow-up telecon with Bristol-Myers, also on the line at that
time, where we went through each of the issues again that we
had focused on all of the telecons up to that date to make sure
and reconfirm each time.
At that time, they were quite aware that these were
significant issues, and there were numerous issues, and that
they were going to require significant amounts of time to
repair.
Mr. Stupak. Now, the design of the 9923 protocol, that was
ImClone's stage two study, correct?
Mr. Mills. Yes.
Mr. Stupak. And that was later submitted as a study for
this fast track approval, correct?
Mr. Mills. Yes.
Ms. Keegan. What was requested was the portion of the study
that met the criteria that we discussed in the August 11
meeting, the subset of the patients in that study, but not the
protocol itself, but some modification of that.
Mr. Stupak. Well, the experts, and I think that Dr. Weiss
had talked about this, that the protocol for 9923 was really
flawed. In fact, they cite another oncologist that stated, and
let me quote, that overall this was a protocol that asked the
wrong questions, and then is not tightly written and efficient.
The protocol generates far more questions than it could ever
answer. It is a blue print for the production of vague answers.
So the protocol from the very beginning had fatal flaws in
it.
Ms. Keegan. I would disagree with that. I think that there
were issues with the protocol that were problematic, but
presented with the results of the study, we didn't consider it
to be a fatal flaw, but a protocol that didn't answer every
question necessary to review the drug for approval.
And that reflects the approach that I recommended that we
take.
Mr. Stupak. If the protocol was not a fatal flaw, then did
you, Dr. Keegan, tell them what they had to do to correct 9923?
Ms. Keegan. They couldn't correct the protocol after the
fact. What we could do is arrive on a group of patients on whom
we could assess the effectiveness, the activity, of Erbitux,
and that is how I viewed the August 11, 2000 meeting; to
determine whether or not there was a significant population.
And we were told approximately 120 patients of the 138 in
that study in whom we could assess Erbitux, and we discussed
the criteria to be applied for that study, and how we would
look at that.
Mr. Stupak. And actually when you applied the criteria the
138 went down to 89, which then made it statistically
unacceptable, correct?
Ms. Keegan. That was an issue with the conduct of the
study. If in the conduct of the study data were not correct,
that is different from the design, and I would just like to
make that distinction.
Mr. Stupak. Sure. And on August 11 when you met with
ImClone, you not only met with your officials, but you met also
with their consultants, right?
Ms. Keegan. Yes.
Mr. Stupak. And were these consultants of reputable stature
within----
Ms. Keegan. Yes. Dr. Saltz was their consultant for their
colorectal application.
Mr. Stupak. And did that doctor present some of ImClone's
positions to you at that time or were they just there?
Ms. Keegan. As I recall, he made the presentation of the
study results as an investigator on the study 9923. And then
other portions of the presentation were made by various
additional members. I don't know if Dr. Mills or Dr. Jerian
recollect any differently.
Ms. Jerian. What I recall of what Dr. Saltz discussed was
with what Dr. Keegan mentioned, and in addition when we asked
about the issue of single agent use of Erbitux, he expressed
the opinion that he felt that it would be unethical to study it
as a single agent.
Mr. Stupak. And, Dr. Pazdur, you said it is a good drug,
bad development plan. Is it a good drug or a good idea behind a
drug, and a bad development plan?
Mr. Pazdur. Well, you have to understand that when we see
activity, tumor shrinkage, in heavily pre-treated patients,
that gives us the initial signal that there is something there
to further develop.
I think that this drug has shown some activity.
Mr. Stupak. For shrinkage?
Mr. Pazdur. Tumor shrinkage, okay. It's life's story is
just beginning basically. What needs to be done is obviously to
show that this drug works, and as I stated before, I firmly
believe that as it is being done now that you needed a
randomized study to show this.
Mr. Stupak. To show that it works in what way?
Mr. Pazdur. To show that it works with CPT-11. The clue
here, or the major crux of the situation is in that original
study with CPT-11, plus Erbitux, do you need the CPT-11 or
irinotecan. I have no idea.
And what their subsequent study, the single agent study,
was that in order for that to work, you had to have a zero
percent almost in the single agent Erbitux study. So in essence
they were betting against their own drug to get the combination
approved, which is a very faulty design.
And that's why I am saying for a similar study or for a
similar drug under development in our center, we have demanded
that the sponsor do a randomized study, and work with the
sponsor to achieve that, and they did for the exact same
indication, a 600 patient study, and answered the question.
So can it be done? Yes, it can be done, but you have to
make sure basically that the sponsor adheres to the plan, and
for the one indication for this drug, we actually had to work
with the sponsor very closely in developing the protocol.
But I guess to answer your question, Mr. Stupak, what I am
saying here is that its initial activity is seen, and once
these drugs get approved in a refractory setting, they are used
in less advanced disease studies.
They are eventually sent into patients that are adjuvant
therapy, after surgery and very early staged patients that are
at a high risk for a relapse. And that may even save lives of
people who are at high risk for having a relapse after surgery.
So it is a glimmer of activity that needs to be further
developed.
Mr. Greenwood. The gentleman's time has expired. The Chair
recognizes the gentleman from Kentucky, Mr. Fletcher, for 5
minutes.
Mr. Fletcher. Thank you, Mr. Chairman. Let me certainly
thank all of you for coming. Dr. Pai-Scherf, you are currently
the medical review officer for Erbitux; is that right?
Mr. Pai-Scherf. That's correct.
Mr. Fletcher. And when did you take that position?
Mr. Pai-Scherf. July 15, 2001, the file was transferred to
me.
Mr. Fletcher. Okay. So you have been through this process
quite a bit. Now, as a medical review officer, what are your
responsibilities on overseeing this study and the approval
process?
Mr. Pai-Scherf. My responsibility is to review the clinical
portion of the BLA.
Mr. Fletcher. Now, do you get ongoing reports back from
these studies? In other words, as the data comes through, I
guess you don't get all the data at once. Do you begin to get
part of it?
Mr. Pai-Scherf. The first portion of the clinical studies
came in early October, and the final piece came on December 3.
So I started my review in early October.
Mr. Fletcher. And when did you really begin to see that,
hey, there are some problems here, or did you see that there
were problems?
Mr. Pai-Scherf. In a very early stage of my review, I
noticed some problems, and the first one is that we did not
have documentation of the CT scan of the patients receiving
irinotecan.
Mr. Fletcher. So you could not document that they were non-
responders?
Mr. Pai-Scherf. Yes. Yes, and that was the first piece and
a very important piece.
Mr. Fletcher. And at what point--well, who did you
communicate that to?
Mr. Pai-Scherf. With Dr. Lilly Lee.
Mr. Fletcher. Dr. Lee with ImClone?
Mr. Pai-Scherf. Yes.
Mr. Fletcher. And that was reported that, hey, you have got
some real documentation. Did they report back to try to get the
documentation? Because that certainly looked to have a
significant impact on the refusal to file letter.
Mr. Pai-Scherf. First she reported that there were 11
patients, and she sent me a table stating that there were 11
patients who were ordered to have a CAT scan, or the physician
never ordered, and felt that the patient progressed because of
clinical judgment.
Mr. Fletcher. And that is not adequate for your study at
all. I mean, just a clinician's feeling from clinical judgment
that the tumor has progressed is not an adequate data
collection; is that right?
Mr. Pai-Scherf. Not for a clinical study supporting
licensure, no.
Mr. Fletcher. Okay. Thank you. In your communication were
you at a meeting with Dr. Lee on December 4 when she asked
whether the FDA was going to send an RTF letter?
Mr. Pai-Scherf. Dr. Lee was clearly concerned about all the
issues that we had raised at that point.
Mr. Fletcher. Were you at that meeting?
Mr. Pai-Scherf. Yes.
Mr. Fletcher. And so you were at that meeting. Okay.
Mr. Pai-Scherf. And she stated that--she asked us if there
would be an RTF.
Mr. Fletcher. And what did you say?
Mr. Pai-Scherf. Dr. Mills answered the question, and I
agreed with what he said.
Mr. Fletcher. Well, you had mentioned that earlier, but go
ahead.
Mr. Mills. From the standpoint again that I offered the
four options that were available, three of which were FDA, and
one of which was that I offered to ImClone that certainly they
could withdraw.
Mr. Fletcher. Let me ask a question, and I guess it is--I
guess this probably goes to Dr. Keegan, but if somebody else
has a responsibility, don't hesitate to answer it.
We got testimony earlier from Mr. Bryan Markison that on
December 25, of all days, Christmas, that he received a call
from someone, and I don't know that we got that individual's
name. But he received a call on December 25 that you all were
likely--well, not only likely, but that it was going to occur,
that an RTF letter would be issued.
And the letter that came out, or at least the one that I
see, has got stamped on it December 28. Now, what is the
protocol here? Who leaked the information, and is that normal
to leak the information, or is that okay to leak the
information? It had tremendous impact on the executives, and
family, friends, and other folks who ended up selling off a
whole lot of stock based on that information.
Ms. Keegan. Well, as Dr. Pazdur says, we do have the
option, and in his center, he will actually inform a sponsor, a
commercial firm, that they would refuse to file the application
ahead of issuing the letter.
There is no prohibition against telling a company that you
will refuse to file their application. We did not choose to
tell them that definitely before we sent the letter, but there
is no prohibition against it.
Mr. Fletcher. Given the fact, and I know that your area of
expertise is not that of the SEC, or some of the other things,
but should there be something? As someone mentioned, there is
no standardization of communications to the companies, and Dr.
Pazdur, you may have made that statement.
Mr. Pazdur. Correct.
Mr. Fletcher. Should we have some standardization given the
impact of markets, the venture capital that is required in the
development of these, and obviously the number of investors
involved that were affected tremendously by this December 28
letter, and some who used inside information to make a bundle?
Ms. Keegan. Well, I think how someone chooses to use the
information is not part of our procedure, and certainly any
communication that we would provide, we would expect that the
company would use it responsibly, or the individuals who
received that.
What I would say about standards is that I am not certain.
I don't know if it is preferable to companies to be told and to
have the opportunity to withdraw. It is certainly something
that we could consider.
As Dr. Pazdur says, every office within the Center for
Drugs, as well as the three review offices within the Center
for Biologics, may differ somewhat in terms of how they might
approach that, and whether a standardization is preferable or
beneficial, I don't know.
Mr. Fletcher. Well, let me ask one final or just a few
questions. Dr. Pazdur, you mentioned that this is probably a--
well, is this a promising drug?
A promising drug class probably, but is it a promising
drug?
Mr. Pazdur. I think it is. I think it is, and what we have
seen here as I have stated before is a good drug, bad
development plan.
Mr. Fletcher. What is the time line that you think that
this randomized study will come out that this may come back and
be issued? How soon do you think we can have this drug, if it
is good as you feel it is, and obviously Bristol-Myers----
Mr. Pazdur. I am not saying that it is as good as it is. I
am just saying that it has the potential.
Mr. Fletcher. Well, if it is 13 percent effective, and
people have no other hope, and if it is that in some very
recalcitrant tumors, think what it is in some less recalcitrant
tumors.
Mr. Pazdur. You've got it.
Mr. Fletcher. I mean, you are able to affect shrinkage in
tumors that have been resistant to everything. So that is a
tremendous potential.
Mr. Pazdur. Yes.
Mr. Fletcher. So what is the timeframe that you think----
Mr. Pazdur. I don't know what the current study is. Pat
knows as far as the European study.
Ms. Keegan. There is a study being conducted by another
partner with ImClone, Merck KGA, and they are conducting a
registration trial in Europe that is looking at a randomized
trial of Erbitux alone, versus Erbitux plus irinotecan.
That study has completed accrual, and I don't believe that
the data are mature enough to analyze at this point. And I
don't know the specific timeframes, but the study was conducted
and has been completed, but is not yet ready for submission.
Mr. Fletcher. Would that be submitted to the FDA, or would
that be approved only in Europe?
Ms. Keegan. No, at the time that we met with ImClone after
the refusal to file letter in February 2002, we discussed the
source of additional data, and they committed to providing the
results of the Merck study to the USFDA and Merck committed to
do that.
Mr. Fletcher. Thank you. Mr. Chairman, I would just like to
say in closing that there are several things which I think have
been brought to our attention. One is the lack of discipline in
this study, even by some of the finest experts in the country,
and I think that is shocking.
Second, I believe that the lack of standardization in
communication is a real problem here, especially given the
market impact that it has, and the financial impact that it has
on a lot of investors that were caught unaware.
And so I appreciate you holding this. I think it has
uncovered some very important issues that need further work.
Thank you.
Mr. Greenwood. The Chair thanks the gentleman for his
comments, and also for his attendance and participation in the
hearing. I would add to that list of policy issues for us to
address, and that I think we need to address the question of
making sure that there is some process by which the claims of
companies who have applications pending can be reviewed, and if
necessary, curtailed, and reined in if in fact those are
raising expectations that are significantly beyond the
expectations that ought to be raised.
Let me clear up just one final piece of information with
Dr. Pai-Scherf and Dr. Mills. When Dr. Lilly arrived
unannounced or had an unscheduled meeting on December 4, I
believe it was her testimony earlier today that she did not
initiate the question of are we going to get an RTF letter, and
that she just wanted to check on things and see what the
options were.
I believe that it was both of your testimonies that she did
raise that issue. So you are both nodding your heads?
Mr. Mills. That is correct.
Mr. Greenwood. For the record, since we don't record head
nods.
Mr. Mills. That's right. That is correct.
Mr. Pai-Scherf. That is correct.
Mr. Greenwood. Okay. Thank you. Thank you all for your
presence and for waiting to testify, and I thank you for the
work that you do on behalf of our country. The hearing is
adjourned.
[Whereupon, at 5:03 p.m., the subcommittee was adjourned.]
AN INQUIRY INTO THE IMCLONE CANCER-DRUG STORY
----------
THURSDAY, OCTOBER 10, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Oversight and Investigations,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:10 a.m., in
room 2123, Rayburn House Office Building, Hon. James C.
Greenwood (chairman) presiding.
Members present: Representatives Greenwood, Stearns,
Whitfield, Fletcher, Deutsch, Stupak, Strickland, and DeGette.
Staff present: Alan Slobodin, majority counsel; Anthony M.
Cooke, majority counsel; Will Carty, legislative clerk; and
David Nelson, minority Counsel.
Mr. Greenwood. The meeting will come to order.
Today the subcommittee continues its inquiry into the
ImClone cancer-drug story. The purpose of this hearing is to
help this committee, as well as the public, understand the
circumstances surrounding the Food and Drug Administration's
refusal to file the application for Erbitux, a highly
publicized cancer drug developed by ImClone Systems, and how
the cancer-drug approval system can be improved.
Erbitux initially attracted national attention because it
offered new hope for seriously ill colon cancer patients; and
because of the premarket publicity about the drug, ImClone's
record-setting $2 billion alliance with Bristol-Myers Squibb to
market Erbitux, the controversy over the accuracy of ImClone's
public descriptions of FDA's concerns in a nonpublic letter and
multimillion dollar stock trades by ImClone insiders in the
weeks before FDA's negative decision.
On June 12, Samuel Waksal, one of the founders of ImClone
and its former CEO, was arrested on a Federal criminal
complaint for insider tipping, attempted insider trading, and
false statements. In its complaint, the Federal Government
alleged that members of Samuel Waksal's family had sold about
$10 million worth of stock on December 27, 2001, based on tips
by Dr. Waksal the day before the FDA's decision. Dr. Samuel
Waksal himself allegedly attempted to sell about $5 million
worth of ImClone stock by initially gifting the stock to one of
his daughters and having her immediately sell it.
At the subcommittee's hearing on June 13, we heard
testimony from one of the committee's investigators and the
committee-retained oncology consultant who reviewed some of the
data and documentation from the key study on Erbitux. In
addition, Dr. Samuel Waksal appeared and exercised his
constitutional right not to testify. We heard testimony from
witnesses from ImClone Systems, Bristol-Myers Squibb and the
FDA.
Some of the key findings from this hearing were that the
primary FDA medical reviewer handling the Erbitux matter did
not believe that ImClone's key study met the criteria for
accelerated approval and fast-track designation. However, at a
meeting between FDA and ImClone in August 2000, the senior FDA
medical official in effect overruled the primary medical
reviewer and said the protocol design was probably acceptable.
The senior FDA official testified that she believed she was
misled by ImClone about its claim that a human clinical trial
showed that Erbitux had no activity when used alone.
FDA granted fast-track designation to ImClone's Erbitux
based on the wrong version of the protocol for the key study
and was made before the agency had the single-agent data on
Erbitux.
ImClone testified that its officials believed that FDA had
accepted the protocol design, that FDA had the correct protocol
version and that they were not led to believe that any of the
documentation problems and flaws in the studies would actually
result in FDA refusing to file the Erbitux application.
On December 24, a law firm retained by Bristol-Myers
obtained information from an FDA source that confirmed ImClone
would receive a refusal-to-file letter. This information in
turn was passed to Harlan Waksal, the then chief operating
officer at ImClone, on December 25.
On December 28, 2001, FDA sent ImClone the refusal-to-file
letter on the Erbitux application. In subsequent days, Samuel
and Harlan Waksal portrayed the reasons for FDA's refusal-to-
file letter as based on a lack of proper documentation.
However, excerpts of the refusal-to-file letter appeared in a
trade publication that showed that FDA's concerns were more
serious than just missing documentation and, in fact, raised
serious questions about whether ImClone would have to obtain
additional data from other preexisting studies or conduct new
studies in order to get approval.
The committee's oncology consultant testified that there
were serious problems in the key study including high rates of
patient ineligibility and waivers. In addition, Bristol-Myers'
independent radiology review showed that strict scrutiny of the
study data yielded only a response rate of 12.5 percent, less
than ImClone's 15 percent goal and much less than the 22.5
percent response rate presented to the public.
Testimony from the FDA officials showed inconsistent
approaches on drug product applications and interactions with
companies between FDA's Center for Biologics and FDA's Center
for Drugs.
Since the June 13 hearing, there have been a number of
major developments reported. On June 19, ImClone Systems
received a Wells Notice from the Securities and Exchange
Commission that appears to indicate that the SEC staff is
considering recommending the Commission bring an action against
ImClone relating to the company's disclosure immediately
following its receipt of the refusal-to-file letter on December
28.
Besides Samuel Waksal and members of his immediate family,
other individuals, notably Martha Stewart, have emerged as
subjects of investigation for conduct related to trading
ImClone stock immediately before the FDA letter was issued.
With respect to Ms. Stewart, the committee on September 10 sent
a bipartisan letter to the Attorney General requesting his
consideration of concerns and information related to statements
that Ms. Stewart caused to be made to the committee concerning
her trade of ImClone stock.
In August, a Federal grand jury in New York indicted Samuel
Waksal on 13 felony counts, including obstruction of justice
and bank fraud. Dr. Waksal has pleaded not guilty to these
charges.
A few days later, ImClone Systems sued Samuel Waksal for
breach of contract and for breach of fiduciary duty based on
the company's belief that Dr. Waksal falsely affirmed that he
was cooperating with the Federal investigations. FDA granted
accelerated approval to a colon cancer drug called Eloxatin.
The approval was noteworthy for two reasons. The drug was
finally available in the U.S. after being on the market for
years in over 50 countries, and the company gained approval by
conducting a three-arm randomized trial in less than 2 years
with FDA approving the application in 46 days.
An FDA advisory committee recommended approvability for
Astra-Zeneca's Iressa based on a 10 percent response rate where
the drug was used alone in seriously ill cancer patients who
had few, if any, alternatives.
These new developments and additional information obtained
by the committee provide the subcommittee with reasons to
continue this inquiry and discussion with today's witnesses.
For example, the committee has learned that ImClone insiders
sold $244 million of ImClone stock in the 2 months before the
FDA rejection, and the volume of options trading of ImClone on
December 27 and December 28 was unusually high.
This subcommittee is encouraged by FDA's reorganization,
but still has questions about how the FDA envisions improving
the approval process for cancer drugs. We will also want to
hear the FDA's views on the adequacy of its law and procedures
on dealing with misleading premarket statements by industry
officials to patients and the investing public about data or
events contained in confidential FDA meetings and documents.
The subcommittee remains interested in discussing drug
approval issues with ImClone, but in addition, this
subcommittee will also want to discuss issues bearing on
corporate governance. For example, ImClone's legal department
told the committee staff that it discovered that Samuel Waksal
had forged the signature of ImClone's general counsel in a
document certifying Samuel Waksal owned stock warrants that he
no longer had. We have also learned that Samuel and Harlan
Waksal purchased shredders in January shortly after Sam
received a phone call from an SEC investigator.
Many aspects of Samuel Waksal's financial problems and past
professional record have come to light. We will want to learn
what ImClone's board and management knew about these issues,
and when and how these decisionmakers responded.
As the committee continues its inquiry, the picture comes
into sharper focus. The ImClone-Erbitux story is truly a
tragedy, particularly for cancer patients and especially those
making 400 telephone calls to ImClone daily for compassionate-
use access. The evidence shows, in the months leading to the
December 2001 rejection, ImClone management spent much of its
time nailing down its billion-dollar tender offer with Bristol-
Myers, publicizing Erbitux, making millions, but failing to
provide the necessary quality control of the clinical package
in its application.
At the same time, there appears to have been confusion and
miscommunication at FDA. Profits before patients and regulatory
incoherence is a betrayal of cancer patients and is at odds
with the Federal mission of promoting the public health.
Through this accounting of what happened at this hearing, it is
my sincere hope that this will enhance the public's confidence
in the biotechnology industry and the FDA, and produce a more
efficient and effective drug approval process.
I look forward to hearing from the witnesses and working in
a bipartisan fashion with my colleagues to produce a better
cancer-drug approval system for patients.
The Chair recognizes for purposes of an opening statement
the ranking member, the gentleman from Florida, Mr. Deutsch.
[The prepared statement of Hon. James C. Greenwood follows:
Prepared Statement of Hon. James C. Greenwood, Chairman, Subcommittee
on Oversight and Investigations
Today the subcommittee continues its inquiry into the ImClone
cancer-drug story. The purpose of this hearing is to help this
committee as well as the public understand the circumstances
surrounding the Food and Drug Administration's (FDA) refusal to file
the application for Erbitux, a highly publicized cancer drug developed
by ImClone systems, and how the cancer-drug approval system can be
improved.
Erbitux initially attracted national attention because it offered
new hope for seriously ill colon-cancer patients and because of the
pre-market publicity about the drug, ImClone's record-setting $2
billion alliance with Bristol-Myers Squibb to market Erbitux, the
controversy over the accuracy of ImClone's public descriptions of FDA's
concerns in a non-public letter, and multi-million dollar stock trades
by ImClone insiders in the weeks before FDA's negative decision. On
June 12th, Samuel Waksal, one of the founders of ImClone and its former
CEO, was arrested on a federal criminal complaint for insider tipping,
attempted insider trading, and false statements. In its complaint, the
federal government alleged that members of Samuel Waksal's family had
sold about $10 million worth of stock on December 27, 2001 based on
tips by Dr. Waksal, the day before the FDA's decision. Dr. Samuel
Waksal himself allegedly attempted to sell about $5 million worth of
ImClone stock by initially gifting the stock to one of his daughters
and having her immediately sell it.
At the subcommittee's hearing on June 13th, we heard testimony from
one of the committee's investigators and a committee-retained oncology
consultant who reviewed some of the data and documentation from the key
study on Erbitux. In addition, Dr. Samuel Waksal appeared and exercised
his constitutional right not to testify. We heard testimony from
witnesses from ImClone systems, Bristol-Myers Squibb, and the FDA. Some
of the key findings from this hearing were:
--The primary FDA medical reviewer handling the Erbitux matter did not
believe that ImClone's key study met the criteria for
accelerated approval and fast-track designation. However, at a
meeting between FDA and ImClone in August 2000, the senior FDA
medical official in effect overruled the primary medical
reviewer and said the protocol design was probably acceptable.
--The senior FDA official testified that she believed she was misled by
ImClone about its claim that a human clinical trial showed that
Erbitux had no activity when used alone.
--FDA granted fast-track designation to ImClone's Erbitux based on the
wrong version of the protocol for the key study and was made
before the agency had the single-agent data on Erbitux.
--ImClone testified that its officials believed that FDA had accepted
the protocol design, that FDA had the correct protocol version,
and that they were not led to believe that any of the
documentation problems and flaws in the studies would actually
result in FDA refusing to file the Erbitux application.
--On December 24th, a law firm retained by Bristol-Myers obtained
information from an FDA source that confirmed ImClone would
receive a refusal-to-file letter. This information in turn was
passed to Harlan Waksal, the then chief operating officer at
ImClone, on December 25th.
--On December 28, 2001, FDA sent ImClone the refusal-to-file letter on
the Erbitux application.
--In subsequent days, Samuel and Harlan Waksal portrayed the reasons
for FDA's refusal-to-file letter as based on lack of proper
documentation. However, excerpts of the refusal-to-file letter
appeared in a trade publication that showed that FDA's concerns
were more serious than just missing documentation and in fact
raised serious questions about whether ImClone would have to
obtain additional data from other pre-existing studies or
conduct new studies in order to get approval.
--The committee's oncology consultant testified that there were serious
problems in the key study, including high rates of patient
ineligibility and waivers. In addition, Bristol-Myers
independent radiology review showed that strict scrutiny of the
study data yielded only a response rate of 12.5%, less than
ImClone's 15% goal and much less than the 22.5% response rate
presented to the public.
--Testimony from the FDA officials showed inconsistent approaches on
drug product applications and interactions with companies
between FDA's center for biologics and FDA's center for drugs.
Since the June 13th hearing, there have been a number of major
developments reported:
--On June 19th, ImClone systems received a wells notice from the
Securities and Exchange Commission (SEC) that appears to
indicate that the SEC staff is considering recommending the
commission bring an action against ImClone relating to the
company's disclosure immediately following its receipt of the
refusal-to-file letter on December 28th.
--Besides Samuel Waksal and members of his immediate family, other
individuals, notably Martha Stewart, have emerged as subjects
of investigation for conduct related to trading of ImClone
stock immediately before the FDA letter was issued. With
respect to Ms. Stewart, the committee on September 10th sent a
bipartisan letter to the attorney general requesting his
consideration of concerns and information related to statements
that Ms. Stewart caused to be made to the committee concerning
her trade of ImClone stock.
--In August, a federal grand jury in New York indicted Samuel Waksal on
13 felony counts, including obstruction of justice and bank
fraud. Dr. Waksal has pleaded not guilty to these charges.
--A few days later, ImClone systems sued Samuel Waksal for breach of
contract and for breach of fiduciary duty based on the
company's belief that Dr. Waksal falsely affirmed that he was
cooperating with the federal investigations.
--FDA granted accelerated approval to a colon cancer drug called
Eloxatin. The approval was noteworthy for two reasons: the drug
was finally available in the U.S. after being on the market for
years in over 50 countries and the company gained approval by
conducting a three-arm randomized trial in less than 2 years
with FDA approving the application in 46 days.
--An FDA advisory committee recommended approvability for Astra-
Zeneca's Iressa based on a 10% response rate where the drug was
used alone in seriously ill cancer patients who had few if any
alternatives.
These new developments and additional information obtained by the
committee provide the subcommittee with reasons to continue this
inquiry and discussion with today's witnesses. For example, the
committee has learned ImClone insiders sold 244 million dollars in
ImClone stock in the two months before the FDA rejection, and the
volume of options trading of ImClone on December 27th and December 28th
was unusually high.
The subcommittee is encouraged by FDA's reorganization but still
has questions about how the FDA envisions improving the approval
process for cancer drugs. We will also want to hear the FDA's views on
the adequacy of its law and procedures on dealing with misleading pre-
market statements by industry officials to patients and the investing
public about data or events contained in confidential FDA meetings and
documents. The subcommittee remains interested in discussing drug-
approval issues with ImClone, but in addition the subcommittee will
also want to discuss issues bearing on corporate governance. For
example, ImClone's legal department told the committee staff that it
discovered that Samuel Waksal had forged the signature of ImClone's
general counsel on a document certifying Samuel Waksal owned stock
warrants that he no longer had. We have also learned that Samuel and
Harlan Waksal purchased shredders in January shortly after Sam received
a phone call from an SEC investigator. Many aspects of Samuel Waksal's
financial problems and past professional record have come to light. We
will want to learn what ImClone's board and management knew about these
issues, when, and how these decisionmakers responded.
As the committee continues its inquiry, the picture comes into
sharper focus. The ImClone-Erbitux is truly a tragedy, particularly for
cancer patients, and especially those making 400 telephone calls to
ImClone daily for compassionate-use access. The evidence shows in the
months leading to the December 2001 rejection, ImClone management spent
much of its time nailing down its billion-dollar tender offer with
Bristol-Myers, publicizing Erbitux, making millions, but failing to
provide the necessary quality-control of the clinical package in its
application. At the same time, there appears to have been confusion and
miscommunication at FDA. Profits before patients and regulatory
incoherence is a betrayal of cancer patients and is at odds with the
federal mission of promoting the public health. Through this accounting
of what happened at this hearing, it is my sincere hope that this will
enhance the public's confidence in the biotechnology industry and the
FDA, and produce a more efficient and effective drug approval system.
I look forward to hearing from the witnesses and working in a
bipartisan fashion with my colleagues to produce a better cancer-drug
approval system for patients.
Mr. Deutsch. Thank you, Mr. Chairman. We have two separate
panels today, and I think they highlight the two separate
trends in our hearings and our investigation.
First, with the head, acting head of the FDA, I think we're
here--we will hear an excellent story of really an agency and
Congress working very well together, and our staffs, both of
our staffs, really doing the work of this subcommittee, really
its investigative arm that I think we are so well known and so
talented about. And that is--in fact, my understanding is that
the FDA has or is in the process of changing its review
procedure for human organism drugs to basically--back to the
Center for Drug Evaluation from the Center for Biologics. And
from all of our understandings, one of the problems of the
Erbitux was really a problem--a procedural problem in a sense
in terms of the expertise within those two parts of the FDA.
Clearly, there are challenges in that animal studies are
different for biologics and chemicals in terms of preclinical
trials, but I think our best assessment, as well as the
agency's best assessment, is that this review potentially has
some very dramatic, positive effects for all Americans and, in
fact, all people throughout the world; and so I'm very proud of
the work that we've done in a very bipartisan, workmanlike
fashion, doing our job.
The second part of the hearing is, I guess, more a step
forward in a sense, in our continuing look at some of the
corporate disasters that have occurred and looking both at
specifics and then systematic issues. I hope that we will focus
on systematic issues today, and I think there are some that are
clearly there.
In this case, I think the largest focus is really the role
of board of directors, in a case where their judgment, in terms
of independence, is very much open to question. I
specifically--there will be many questions that will come up
this morning, but with all that the board knew in terms of Sam
Waksal's actions, including--my understanding is the general
counsel whose signature was forged will be here--with all of
that information available to the board, the fact that the
board still did not seek to remove him even at others'
suggestion--obviously issues about some of the consulting
relationships with the board, really, and the independence.
What I've said previously in other hearings is, even with
downturns almost on a daily basis in equity markets, our
economy is still by far the strongest economy in the world and
the strongest economy in the history of the world, and a lot of
that has to do with transparency. And what we've seen, step
after step, seem to be problematic issues related to
transparency.
To some extent, it is unfortunate that we're doing this in
the waning hours of this Congress, because we still have
legislation which, hopefully, although it appears more and more
unlikely to pass, is trying to protect investors, trying to
protect 401(k) owners as well.
Thank you, Mr. Chairman.
Mr. Greenwood. The Chair thanks the gentleman.
The gentleman from Kentucky, opening statement.
Mr. Fletcher. First, Mr. Chairman, I want to thank you for
holding this subsequent hearing to the hearing that we had
previously. I think as we look--just very briefly, and I'll
enter a statement, a little more, later, but it's about
patience and investors, public trust.
First, I'm glad to hear some of the changes that the FDA is
making in their drug approval process, particularly that some
of the problems were uncovered as we looked at the process, the
fast-track approval; and also the relationship between the FDA,
the SEC, when products are being marketed and statements are
being made by companies related to those products that are
under review by the FDA.
Second, I think it's very important--and I want to thank
the chairman for the second panel as well--corporate
responsibility. There are some grave concerns about oversight
on the board during all this problem with the approval of
Erbitux and ImClone's management. So let me introduce my more
lengthy statement, but conclude with that.
And thank you, Mr. Chairman.
Mr. Greenwood. The gentleman's statement will be made part
of the record, as will any other opening statements that
members wish to include in the record.
[The prepared statement of Hon. Ernie Fletcher follows:]
Prepared Statement of Hon. Ernie Fletcher, a Representative in Congress
from the State of Oklahoma
Chairman Greenwood; thank you for having this hearing today.
We have all seen the devastation that Cancer can cause. We know the
emotion and physical destruction that this disease brings to patients
and their families.
In the US where we have one of the best healthcare systems in the
world, there will be more than 1.2 million new cancer cases diagnosed
this year alone. This year about 555,500 people will die from cancer.
It is no surprise that patients and physicians are excited when a
promising new drug or therapy becomes available. The Energy and
Commerce Committee has worked hard to see that groundbreaking research
can provide physicians with the tools to provide treatment for cancer.
While new drugs, Like Erbitux show great promise, we must also
balance their development with the public's interest--including
patients, their families, and investors. They must be proved safe and
effective before they are available for general use.
I have deep concerns that ImClone ignored important advice from Dr.
Frederick Sparling that the scientific advisory board (SAB) could help
the company's situation regarding clinical trials if they would just
bring them together to ensure the company could recognize what sound
science should look like. I am concerned that the decision to not bring
the SAB together, was made because some on the Board were too close to
the clinical trials and Erbitux itself to make unclouded judgements
about what were best practices in order to achieve a study void of
design and conduct flaws.
At our last hearing, I wanted to make sure that FDA was doing the
best job possible to balance these two issues. I still believe we must
continue our conversations with the FDA, but I am pleased to see the
FDA making some positive changes that will help balance safety and
effectiveness. I hope that we can continue to work with FDA to develop
policy that allows these new technologies to be available to patients
as quickly and safely as possible.
Equally as important, we must look at corporate governance issues
such as CEO misconduct, the ImClone insider trading policy, conflicts
of interest within the Board and management, and changes in corporate
policies made in 2002 in response to this Committee's inquiries, the
media attention, and enactment of the Oxley-Sarbanes Act.
It is my hope that many new cancer treatments, including Erbitux
can be approved for marketing as quickly and safely as possible. It is
FDAs responsibility to maintain the Gold Standard of safety. ImClone
needs to recognize that they must not only work to ensure that Erbitux
is approved, but also that is safe and effective according to the FDAs
standards.
Again, I thank the Chairman for holding this hearing today.
Mr. Greenwood. The gentlelady from Colorado is recognized
for an opening statement.
Ms. DeGette. Thank you, Mr. Chairman. Just to say briefly,
I'd like to commend you on holding this hearing today.
Like the other members, I've been quite concerned for some
time about what the role of corporate boards has been in all of
our investigations on corporate responsibility. And what we've
seen over the last year during the hearings of this
subcommittee, which have been incredibly productive, we've seen
throughout the economy, every industry, from energy to
telecommunications to pharmaceuticals; corporate officers,
corporate employees almost running rampant with the resources
of the company, and the boards just standing by and rubber-
stamping whatever these employees wanted to do.
I think that our continuing investigation into board
activities and board accountability will be greatly helped by
our hearing today, and I just want to thank you for really
refocusing this committee's efforts with respect to ImClone on
the board activities and also the FDA approval process. I think
it will yield a lot of evidence as we move forward to decide
what, if any, additional legislation Congress needs to examine
to improve the system.
And I yield back the balance of my time.
Mr. Greenwood. The Chair thanks the gentlelady.
The gentleman from Florida, Mr. Stearns.
Mr. Stearns. Thank you, Mr. Chairman, and I commend you for
this hearing.
I think many of us have either been on television or heard
from the news media. They always ask the question: Congress
doesn't need to aggressively inquire into these cases of
corporate governance; why don't we just turn these over to the
Department of Justice? Why don't we turn them over to the
Federal Trade Commission? And my response is that we do have a
responsibility here in Congress. We make the laws, both on drug
approval and securities trading, and therefore we need to be
informed of examples where events do not proceed as the law
intended, because we are making the laws here.
One of my concerns was how ImClone was hyping Erbitux on 60
Minutes and the cover of Business Week. Meanwhile, the FDA's
hands were tied in not correcting any exaggerated claims made
by this company. So, rightly so, we have to explore these, and
I think this hearing is important to do that. We'll hear today
from the FDA on Federal trade secrecy laws and how they might
be permitted to communicate with the subcommittee in such cases
where the stock prices have these exaggerated claims.
Furthermore, I'm glad that this committee will again
examine these corporate governance issues, because the
oversight committee on commerce has the responsibility--and
that is what we're elected to do--how directors of companies
abuse their positions, get interest-free loans, the CEOs and
the like. For this whole system of capitalism to work and the
general public to have transparency, we need to have a better
understanding of how companies in the biotech industry, like
ImClone, work and how we as legislators can make it so it is
more transparent to the investors.
Integrity is the elixir that will attract capital and lead
to this life-saving innovation which ImClone is trying to do.
And to see this poison that is eroding investors' confidence
today--so I think this hearing is timely and important, and I
commend you, Mr. Chairman.
[The prepared statement of Hon. Cliff Stearns follows:]
Prepared Statement of Hon. Cliff Stearns, a Representative in Congress
from the State of Florida
Mr. Chairman, thank you for holding this follow-up hearing today.
On August 25, I was interviewed on MSNBC News, and the reporter asked
me didn't I feel that Congress doesn't need to aggressively inquire
into cases of corporate governance, that we should just turn these over
to the DOJ's antitrust lawyers and the FTC. My response was, and is,
that we in Congress make the laws on both drug approval and securities
trading, and therefore we need to be informed of examples where events
do not proceed as the law intended. And so here we are again.
One of my grievances at the last hearing was how while ImClone was
hyping Erbitux on ``60 Minutes,'' and the cover of Business Week, the
FDA's hands were tied in not correcting any exaggerated claims made in
these features. And rightly so: their role is not as watchdog of the
media. I am especially pleased, therefore, that today we will hear from
the FDA on Federal Trade Secrecy laws, and how they might be permitted
to communicate with the SEC in such cases where stock price may be
affected.
Further, I am glad this Committee will again examine corporate
governance issues: how directors of companies abuse company debt, get
interest-free loans, and the like. For the system of capitalism to
work, where the general public invests in private ventures for the
betterment of themselves, of the economy, and in the case of a biotech
company, the betterment of patients, there needs to exist complete
transparency and integrity in a company's operations. Shady executive
practices lead to damaging effects rippling through the economy:
Integrity is the elixir that will attract capital and lead to
lifesaving innovation, while deceit is the poison that is eroding
investor confidence. Thank you.
Mr. Greenwood. The Chair thanks the gentleman.
The gentleman from Ohio, Mr. Strickland, for an opening
statement.
Mr. Strickland. Mr. Chairman, I would like to enter my
statement into the record, and I would like to yield my time to
Mr. Stupak who has an opening statement.
Mr. Greenwood. The gentleman from Michigan is recognized to
make an opening statement.
Mr. Stupak. Thanks, Mr. Chairman. We just called a vote.
We're less than 10 minutes, so I won't give my full statement.
First of all, we talked about another hearing. I'm pleased
to see that we're having one on Erbitux and ImClone, and the
two aspects are how the FDA approves their drugs in the
biologics approval and also how ImClone, as a company, failed
its investor.
You know, Mr. Stearns brought up the exaggerated claims we
heard at the last hearing. Dr. Frank Papineau, who said that--
well, the claims may have been exaggerated, and the officials
were aware, FDA officials were aware they could do nothing
about it because of the secrecy, the trade secrets and stuff of
drug applications, he said. I find that sort of just plain
wrong. I fail to see how trade secrets are exposed by a simple
rebuttal of claims; or at the very least, a statement of
caution to the public by the FDA should have been taken. It
should have been put out.
After all, the FDA's responsibility here is to protect the
health, safety and welfare of the American people. And when
exaggerated claims are being made on so-called ``miracle
drugs,'' as this was, there should be something there to be
able to rebut it; and I hope that is one of the policy
decisions this committee will handle.
I also have great reservations about how the FDA handled
drug and biologic approvals, and I'm not sure that just
switching over to biologics approval to the Center for Drug
Evaluation will work. I'll withhold my judgment on that until
we hear more about it.
Finally, we've seen in the long series of cases Oversight
and Investigation has done, once again a corporate board has
allowed its officers basically to take a publicly owned company
and use it as their own privately owned piggy bank; and again,
I'd be remiss if I did not once again say, I think all this
started back in 1995 when we passed a Private Securities
Litigation Reform Act that should be repealed.
The Private Securities Litigation Reform Act of 1995
created a permissible legal environment for the threat of
lawsuits that were removed and the loser pay--and that law
should just be repealed, and I would once again ask the
committee to consider repealing the Private Securities
Litigation Reform Act.
With that, I'd yield back and submit my full statement for
the record.
[The prepared statement of Hon. Bart Stupak follows:]
Prepared Statement of Hon. Bart Stupak, a Representative in Congress
from the State of Michigan
Mr. Chairman, we are here today to continue our investigation of
the ImClone/Erbitux disaster.
I am pleased we are taking up two very important aspects of this
fiasco: how the FDA conducts its drug and biologic approvals, and how
ImClone as a company failed its investors.
On June 13, 2002 we had a hearing on ImClone, and I questioned Dr.
Frank Papineau, an investigator for this committee and a witness at the
hearing, about how FDA could have let ImClone make such exaggerated
claims about its drug, Erbitux.
I asked him how it was that the FDA did not take steps to publicly
correct these misstatements. He replied that FDA officials were aware
of these misstatements but could not do anything because of ``the
secrecy--the trade secrets and stuff of drug applications.''
He went on to say that the FDA officials saw the ``60 Minutes''
story, the USA Today story, and the Business Week cover story, and
still could not say anything.
When I brought up this point to Pat Keegan, the officer who
overruled her own staff and allowed the Erbitux application to go
forward, she found it amusing and laughed. I do not think this is any
laughing matter.Well, this is just wrong. I fail to see how trade
secrets are exposed by a simple rebuttal of claims, or at the very
least a statement of caution to the public from the FDA.
I have great reservations about how the FDA handles drug and
biologic approvals, and I am not sure that switching over the biologics
approval to the Centers for Drug Evaluation will work. I will withhold
judgment on that.
Today, we are also looking at how the senior officers and board
members of ImClone may have worked the system in their favor at the
expense of their shareholders.
It appears we have a classic case of corporate malfeasance,
although further investigation is ongoing.
What I--and the shareholders who got the short end of the stick--
want to know is, ``What happened?''
What we do know at this point is that top officers sold large
amounts of stock after privately receiving bad news. Stock prices
plunged.
It seems as though certain people may have treated this publicly-
owned company as a privately-owned piggybank.
I hope this is not what happened.
Perhaps shareholders would have had more recourse if those in
Congress didn't strip away their rights in 1995 as part of the Contract
on America.
The Private Securities Litigation Reform Act, or PSLRA, stripped
away shareholders rights and virtually eliminated deterrence.
It created a permissive legal environment where the threat of
lawsuits were removed and the loser pays.
PSLRA should be repealed, and I request the support of my
colleagues for my bill that would do just that, H.R. 3829.
Mr. Chairman, I yield back the balance of my time.
Mr. Deutsch. Mr. Chairman, I have a statement from the
ranking member of the full committee, Mr. Dingell.
Mr. Greenwood. Without objection, Mr. Dingell's statement
will be made a part of the record.
[The prepared statement of Hon. John D. Dingell follows:]
Prepared Statement of Hon. John D. Dingell, a Representative in
Congress from the State of Michigan
Mr. Chairman, thank you for holding this hearing. As our first
ImClone hearing and reports in the press have revealed, this company
belongs in the infamous pantheon of firms whose executives have been
allowed to treat publicly traded businesses as their own personal
cookie jar. Apparently the ImClone Board of Directors, like many
others, has been content to take their fees while at best turning a
blind eye to abuses that were occurring under their very noses.
This investigation, however, has also addressed another issue of at
least equal importance to corporate misdeeds--the efficiency and
fairness in the expedited approval process at the Food and Drug
Administration (FDA) for drugs to treat illnesses, often life
threatening, for which no alternative treatment regime exists.
Congress enacted a process that expedites new experimental
treatments to the market in record time, based on very little evidence
of effectiveness. Even under these very lax procedures, ImClone was
unable or unwilling to undertake the research necessary to make the
necessary showing of possible efficacy.
This hurt colorectal cancer patients for whom this drug was the
last hope. No drug currently on the market as a treatment for
colorectal cancer is much better from a placebo. Even ImClone only
claimed its drug, in combination with a chemotherapy agent, shrunk
tumors, not actually extended life but shrunk tumors, in less than a
quarter of the 120 patients in the study. Analysis of the data by
Bristol Meyers put that number at less than 13 percent. The Waksals
raised false hopes, and stole the hope that did exist, from those
suffering, or whose loved ones are suffering, from this terrible
disease.
It appears that the FDA has taken a positive step in the direction
of a more rational, consistent approach to expedite these applications.
When the reorganization that transfers all drug reviews to the Center
for Drugs is complete, all applicants should realize that if they hope
to get small Phase II studies considered for early approval, that the
science behind those limited studies will have to exhibit the kind of
rigor that Dr. Pazdur advocated at our last ImClone hearing.
While this proposed transfer of authority holds the promise of
consistency and good science as the heart of expedited consideration,
the devil remains as always in the details. Congress, and particularly
this Subcommittee, will need to watch carefully. Will needed expertise
be transferred? Will bureaucratic delay and uncertainty cause FDA to
lose important scientific expertise? Will employee rights be respected?
This transfer must be done right, or FDA may make matters worse.
Mr. Greenwood. We have just over 7 minutes left in this
vote, so the committee will recess and return immediately after
the vote.
[Additional statement submitted for the record follows:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Mr. Chairman, thank you and let me commend you and the staff on
both sides of the aisle once again for the path-breaking work in this
ImClone investigation. There is so much more to this than people just
following the news stories over the summer may realize.
Ultimately, this investigation comes down to doing what's right for
cancer patients. By exposing the problems that occurred with ImClone's
Erbitux and the FDA, you are helping to point the way for us to improve
the drug-approval system--to make it work better for these and other
patients desperately hoping for breakthrough treatments.
So with all the attention on insider trading and corporate
governance--subjects we will take on today as they relate to the
problems here--the public should not forget that potential flaws in
FDA's drug approval process have been at the center of this
investigation all along.
These flaws allowed a study of questionable quality to become the
basis for fast-track application. They allowed irresponsible hyping of
a promising drug as FDA silently stood by--thus raising and dashing
hopes of thousands of cancer patients.
I am encouraged that since the June ImClone hearing, the FDA has
reorganized pharmaceutical product reviews to enhance consistency and
performance. This is a good first step and we are very interested to
learn how FDA envisions this reorganization will improve the drug-
approval system, especially for cancer drugs. I welcome Dr. Lester
Crawford, FDA's Deputy Commissioner, who can discuss this for us.
There's clearly room for improvement. We know this from FDA's own
work. Consider Eloxatin. This colon-cancer drug was approved on an
accelerated basis by FDA's Center for Drugs on August 12, 2002, within
46 days of submission--a new FDA record. And it was approved based on
an interim analysis of a Phase III randomized trial--a trial that
measures actual patient survival--instead of less reliable Phase II
study-data on surrogate endpoints, which had been the basis for past
accelerated-approvals and were the basis for ImClone's application.
Eloxatin shows a company can get accelerated approval just as fast
as ImClone had hoped its drug would be approved, and with better data.
Perhaps the Eloxatin case can be a useful model for the future. It
clearly suggests that ImClone's experience might have been different,
if there had been better communication between FDA and ImClone.
I understand that FDA is working on a communications policy that is
aimed at improving interactions between the agency and the companies it
regulates. This is encouraging and I am hopeful that FDA is moving in a
constructive direction.
I look forward to hearing about FDA's views on pre-market promotion
or pre-market statements--a topic that also gets to ImClone's actions
and governance. This aspect of the ImClone story is essential to our
inquiry.
We now understand that ImClone directors and officers reaped
millions from the sale of ImClone stock before FDA's refusal-to-file
letter. Cancer patients, of course, got their hopes dashed. And what
did many ImClone shareholders get from the rejection of Erbitux? An 88%
reduction in share price, delay in the development of Erbitux, a CEO--
Sam Waksal--who resigned and then was arrested and indicted.
ImClone Systems has now sued Sam Waksal because it believes he did
not cooperate with the federal investigations while he affirmed to the
company that he was cooperating.
Yet we have now learned that for years ImClone did not trust Sam
Waksal with the company's corporate credit card. It actually installed
special procedures to ensure he did not charge the company for his
personal expenses.
Why would ImClone management have trusted Dr. Waksal?
The media have already reported his financial problems, and his
past firings for allegedly misleading and even falsified scientific
work. Fortune reports that, over the past 20 years, dozens of lawsuits
and tax liens have been filed against Waksal by the IRS, New York
State, American Express, banks and brokers, art galleries, contractors,
and individuals.
Are we to believe that ImClone management was totally unaware of
these issues? Did the Board and management act properly in light of
these red flags? We will be interested to hear from the ImClone
witnesses on these questions and others surrounding the rejection of
Erbitux.
Mr. Chairman, it is my hope that, from this investigation, we will
see an improved drug-approval system--where the public has confidence
in the companies, the FDA and the companies are clearly communicating
with each other, and drug-studies are conducted properly to provide
information that will optimize the chances for approval, so patients
can be helped.
Thank you, Mr. Chairman.
[Brief recess.]
Mr. Greenwood. The committee will come to order. The Chair
apologizes for the delay.
And we welcome Dr. Crawford. Thank you for being with us.
And I think you're aware that this committee is holding an
investigative hearing, and when we hold investigative hearings,
we take testimony under oath.
Do you have any objections to giving your testimony under
oath?
Mr. Crawford. None whatsoever.
Mr. Greenwood. I also should advise you that pursuant to
the rues of this committee and the House, you are entitled to
be represented by counsel.
Do you choose to be represented by counsel this morning?
Mr. Crawford. Not at this time.
Mr. Greenwood. Okay. If it gets dicey and you need a
lawyer, just let us know.
Mr. Crawford. We have some waiting in the wings, Mr.
Chairman.
Mr. Greenwood. All right. In that case, if you would stand
and raise your right hand.
[Witness sworn.]
Mr. Greenwood. You are under oath, and recognized to make
your statement.
TESTIMONY OF HON. LESTER M. CRAWFORD, DEPUTY COMMISSIONER, FOOD
AND DRUG ADMINISTRATION
Mr. Crawford. Mr. Chairman and members of the subcommittee,
I am Les Crawford, Deputy Commissioner of the Food and Drug
Administration. I appreciate the opportunity to address the
committee's questions about the agency's communications policy.
The recent announcement of a plan to transfer
responsibility for the premarket review of certain therapeutic
biological products from our Center for Biologics Evaluation
and Research (CBER) to our Center for Drug Evaluation and
Research (CDER) and the agency's authority to police the
marketplace for false or misleading statements made by
companies about their products that are being reviewed by FDA
prior to marketing.
In conjunction with the June 2002 reauthorization of the
Prescription Drug User Fee Act of 1992, FDA agreed to meet
specific performance goals. Under the PDUFA goals, as they are
called, CBER and CDER agreed to draft a joint guidance for the
agency and industry on how we define good review management
principles for the first review cycle of a new drug application
or a biologics license application, otherwise known as a BLA.
At this committee's hearing in June on the subject of the
review of the BLA submitted by ImClone for Erbitux, questions
were raised about whether CBER and CDER had consistent policies
for communicating with sponsors of premarket approval
applications. Thus, the importance of this guidance document
was highlighted further. This guidance, when finalized, will be
based on the agency's best practices for efficient management
of review processes and will emphasize the need for effective
communications between the agency and sponsors during premarket
review.
We recognize the need for guidelines to ensure the
consistency of communications. While our overriding
responsibility is to help assure the safety and effectiveness
of drugs and medical devices, we're also aware that information
concerning the status of premarket review and the likelihood of
FDA approval can substantially affect the financial markets for
publicly held companies.
We anticipate publishing the draft guidance in the next few
months and will welcome comments from the public.
As you may know, in September, I announced a plan to
transfer responsibility for premarket review of certain
therapeutic biologics from CBER to CDER. As part of continuing
efforts to improve agency efficiency and consistency, in the
fall of 2001, the Office of the Commissioner hired consultants
to evaluate the drug review process to identify best practices
and make recommendations for improving those processes. The
consultants conducted reviews with CBER and CDER staff and
reported their findings to me.
Also, during the renegotiation of PDUFA, industry
representatives expressed their views to Secretary Thompson and
me about the importance of achieving consistency across all
review divisions.
Members of my scientific management team gathered data on
specific issues of concern and developed a list of options for
improving efficiency and consistency at FDA. After reviewing
these options, I concluded that CBER performs a variety of
functions, such as vaccine and blood regulation, that are
distinguishable from the review of most therapeutic biologic
products. Furthermore, I concluded that consolidation of
certain review functions within CDER would promote efficiency
and consistency within the agency.
To manage the transfer of these functions, we have
established a team of staff from both centers. The transfer
will be accomplished with the greatest attention given to
minimizing disruption to current product reviews.
Last, I would like to address questions that have arisen
concerning the extent of FDA's authority to take action with
respect to false or misleading statements, made by sponsors to
the public, regarding products undergoing FDA review.
FDA's paramount statutory mandate is to help assure that
patients have access to safe and effective medical products.
That is our focus during the preapproval stage. While FDA has
authority to correct false or misleading sponsor statements, in
appropriate circumstances, primary responsibility for assuring
the truthfulness of company statements aimed at investors
resides not with FDA, but with the Securities and Exchange
Commission.
The SEC has broad authority under Federal securities laws
to take action against any sponsor that makes false or
misleading statements in connection with a securities
transaction. SEC enforcement action based on false or
misleading statements to the markets regarding the progress of
FDA premarket review is commonplace. FDA has a very effective
relationship with the SEC. To further strengthen interagency
ties, FDA has taken a systematic review of our interactions
with the talented and dedicated people at SEC, and we intend to
systematize our interactions further, based on discussions with
those individuals.
Thank you very much for the opportunity to be here. I look
forward to the further proceedings of this committee.
[The prepared statement of Lester M. Crawford follows:]
Prepared Statement of Lester M. Crawford, Deputy Commissioner, FDA
Under the PDUFA goals, CDER and CBER agreed to create a joint
guidance for the Agency and industry on how we define Good Review
Management Principles for the first review cycle of a new drug or
biologics licensing application. This guidance will be based on the
Agency's best practices for efficient management of review processes
and will emphasize the need for effective communications during
interactions between the Agency and industry.
In September Dr. Crawford announced a plan to transfer review of
certain therapeutic biological functions from CBER to CDER. FDA has
established a team of staff from CBER and CDER to manage this
transition.
FDA's primary responsibility during the preapproval stage is to
conduct thorough and prompt premarket review of products under
investigation. Primary responsibility for assuring the truthfulness of
company statements aimed at investors resides with the SEC. FDA has
undertaken a systematic review of its interactions with the SEC, and we
intend to systemize our interactions further based on discussions with
those officials.
Mr. Greenwood. Thank you. The Chair recognizes himself for
10 minutes for questions.
Mr. Crawford, on June 27, 2002--in light of the ImClone
hearing, the committee sent you a bipartisan letter--I believe
it is being handed to you now--asking the FDA to harmonize best
practices for designing clinical trial protocols and
communications with companies about drug approval issues.
The question is, what action has the FDA taken to encourage
more agreements between companies and the FDA about clinical
protocol design?
Mr. Crawford. Well, under the recently negotiated PDUFA
goals and standards, we agreed that we would engage in a
certain number of increased meetings with the industry,
meetings that--for which minutes are kept, in which we review
what their intentions are, what their progress is, and also
offer the best interpretation that we can along scientific
lines and medical lines of what we expect the company to do.
These minutes have been referred to in the open press as
``contracts'' between FDA and the sponsoring firms. In point of
fact, they're not, technically speaking, that, but they are an
understanding of what the company has to do and also what we
expect they will need to do in order to gain approval.
These will be increased, as I mentioned, as a result of
PDUFA; and also we are now going to be publishing, as I
mentioned, these good review practices for public comment, and
that will be part of a larger document where the intention will
be not only to systematize, but to bring some consistency
between what the different centers say to the industries that
are sponsoring these products, but also from reviewer to
reviewer, what is said. And that is a result of this
committee's interest and actions and also this letter.
So that will be proceeding apace, we expect, in a very
short time, perhaps by the end of the year, that we will have
this package out for comment.
We will give a reasonable amount of time for comment, and
it also will be submitted to this committee for any action you
would like to take, including further meetings with the
subcommittees of FDA personnel, including myself and the new
commissioner; and we would like to work with the committee on
making sure that we refine these practices.
I think it's worth noting that there have always been
commonly understood mechanisms and techniques that FDA will use
to communicate with the industry. I think it is axiomatic that
we have to communicate throughout the review process, because
we have to ask them for more information, and they have to----
Mr. Greenwood. Let's get right to the ImClone case here,
because a number of lay people have said to me, isn't this
awful that the FDA leaked this information out that caused the
panic at ImClone and the insider trading and so forth? And my
response is actually a little different than they expect,
because I've been pushing since the mid-90's for more and more
transparency at the FDA.
It seems to me that if I look at this particular case, when
Ms. Lee was in the FDA's office in--I think it was December 4--
at that time, the FDA reviewers with whom she was meeting knew
that they had or were about to make a recommendation to their
superiors to issue a refusal-to-file letter, and yet that
information was not shared with her. And, in fact, there was a
lack of transparency from that point forward, except for the
fact that the Bristol-Myers lobbyist was able to worm his way
in and get some information.
And so it seems to me that cases like that in FDA would be
better off--the patients would be better off, the companies
would be better off with maximum transparency, so that if
companies--so that conversation might have happened where the
FDA said, look, we've got some serious--we have some serious
problems with your study here. These are what those problems
are, and we're inclined to recommend a refusal to file. You
should know this. You may want to withdraw your application and
do some more work and come back to us, and that might have
prevented this very precipitous issue.
How would you respond to that?
Mr. Crawford. Well, I think a couple things, based on that
case.
One is, we believe--and it's memorialized in these draft
guidances that we're trying to get together as quickly as
possible--that the result of the FDA review should be committed
to writing. There should be a letter that can change hands,
because there were many different interpretations of what was
said and who said what, et cetera, et cetera.
So we are moving toward vesting in the division director
the requirement that when the decision has been made, to hand
out this written statement and I believe that will make for a
lot of progress.
Mr. Greenwood. Well, but again, that's when a decision has
been made.
What I'm talking about is ongoing dialog; and I understand
the need to memorialize that dialog in written form so there
isn't confusion or there aren't legal concerns. But it seems to
me that companies ought to be able to make written inquiries
with regard to the status of their applications and receive
written responses along--all along the process.
Mr. Crawford. They can and do do that. And I think
``written'' is a key thing.
The other thing is that although there are certainly early
warning signs all along, the final decision on whether or not
we're going to file rests with the division director. So
theoretically a division director can overturn the decisions
early.
So we have to have a focal point for transmitting the
information.
Mr. Greenwood. Let me get to the question of preapproval
promotion, because it's a big issue here.
Without making any judgments about this particular product
and how it was promoted and how that compared with the facts,
as the company knew them, when a product is approved, it has a
very tightly worded label, and it's quite clear as to what
claims cannot be made for the product. Prior to approval, there
is very little that goes on in terms of the FDA's regulation of
what a company can say.
Now, in your opening statement in your testimony, you
talked about the SEC being responsible for this, and the status
of communications between the SEC and the FDA. Clearly, the SEC
is unlikely to have reason to second-guess a company's claims,
unless they get some information from the FDA first. SEC has a
lot to do and certainly has limited personnel and isn't going
to be able to monitor every press release, every printed
statement about a potential product.
And there is a lot of opportunity there, putting Erbitux
aside for a moment, there's a lot of opportunity to exaggerate
claims in order to attract investment.
Do you think that there should be consideration by the
Congress of having some review process at the FDA or disclosure
process so either the company says, we'd like to make this
claim or we'd like you to review it, or we've made this claim
and you should see it, so the FDA can monitor and, if need be,
refer a case to the SEC?
Mr. Crawford. We'd like to work with the committee on that.
Two quick points: One is that we are--I have asked our
office chief counsel the volume of interchange between FDA and
SEC, and I'm assured that it is on a daily basis going both
ways. So I think this is a case where two executive branch
agencies do communicate well.
The second thing is that in the preapproval process, if a
company makes some egregious claims that have come to our
attention, there are some things that we can do now under the
statutory authority that we have. One is that we can send
letters, which are commonly called ``untitled letters,'' to the
company asking them, in effect, to cease and desist.
If that doesn't work, we can--what we would do historically
is send a second untitled letter, and then finally a warning
letter. And it is possible for us legally, if the egregious
claims continue, to actually suspend review of the drug.
So we do have that authority.
Mr. Greenwood. Let me squeeze one more question in before
my time runs out.
What can you tell us about the current status of Erbitux
and its review by the FDA, and who is doing--which center is
doing the reviewing?
Mr. Crawford. That reviewing is taking place in the Office
of Oncology, where it was before. And the second thing is that
there are some clinical trials that have begun. And there's one
fairly large clinical trial, involving about 300 patients, that
is presently under way; and there are a couple more of about
1,000 patients that are being contemplated. And the firm is
interacting with FDA in order to be sure that these set up
correctly.
Mr. Greenwood. Any sense as to when you think the FDA will
be--these trials will be completed and the FDA will be in a
position to approve or disapprove this drug?
Mr. Crawford. You know, I can't predict. I just can't.
Every time I do, I----
Mr. Greenwood. Months away or years away?
Mr. Crawford. Let me confer just 1 second.
Yeah. The first review, the first trial, the data should be
in by the end of the year. Typically we take about 6 months to
review, and we don't know whether the--at the completion of the
review, you know, we'll file, it will be approvable, but that
would be sort of the earliest, like midyear next year.
Mr. Greenwood. Very well. My time has expired.
The gentleman from Florida for 10 minutes.
Mr. Deutsch. Thank you, Mr. Chairman.
Dr. Crawford, it's widely alleged that the decision to
transfer the review of most biological drugs from the Center
for Biologics to the Center for Drugs was not originated from
either center, but rather was imposed by the department at the
behest of the biotech drug industry.
Without judging that decision, because it's not yet been
implemented, I would like to explore how it came about and what
preliminary steps your office is taking to see that no
requisite expertise is lost from the agency.
First, when and from whom did you first hear this proposal
expressed within the government?
Mr. Crawford. When I joined FDA--or rejoined FDA on
February 25 of this year, very shortly after that--I believe it
was probably in early March--I was briefed about a review of
CBER, or a review of their therapeutic biologics, t |
