- The Washington Times - Monday, July 21, 2003

NEW YORK (AP) — Harlan W. Waksal resigned from ImClone Systems Inc., the troubled biotech company at the center of an insider-trading scandal that ensnared his brother and co-founder, Sam Waksal, and threatens Martha Stewart.

Harlan Waksal was chief scientific officer of ImClone, after he was demoted in April from chief executive and president. He also resigned from the company’s board, the company said in a statement.

Shares of ImClone rose 93 cents to $35.16 yesterday on the Nasdaq Stock Market.

Sam Waksal, the longtime friend of Mrs. Stewart, was sentenced last month to more than seven years in prison and ordered to pay more than $4 million after pleading guilty last year to securities fraud, perjury and other charges related to the sale of ImClone shares ahead of news that caused the shares to fall sharply.

Harlan Waksal said he is leaving ImClone to pursue other opportunities and was unrelated to the company’s struggle to get its key cancer drug, Erbitux, approved for sale in the United States.

“My departure has nothing to do with any concern about Erbitux, its testing or its regulatory process,” Mr. Waksal said in a statement. “I chose to leave the company now, because given the board’s decision in late April to give me the duties of chief scientific officer, I feel that this is the right time in my life to pursue new challenges.”

His resignation comes days after former ImClone chairman and longtime director Robert F. Goldhammer resigned from the company’s board. Mr. Goldhammer resigned as ImClone’s chairman in April.

David Kies, lead director of ImClone’s board, credited Harlan Waksal with helping to build the company and advancing its drug Erbitux.

Mrs. Stewart was indicted in early June on five federal counts — including obstruction of justice, conspiracy and lying to investigators — tied to her December 2001 sale of nearly 4,000 shares of ImClone stock shortly before the stock plummeted on news of a regulatory setback for Erbitux. She pleaded not guilty to all charges.

Also, yesterday, Mrs. Stewart’s attorneys asked a federal judge to order an investigation into who leaked details of her indictment to the news media before the grand jury returned the formal charges.

U.S. District Judge Miriam Goldman Cedarbaum appeared skeptical of the request, but said she would consider it.

News reports before the June 4 indictment, quoting anonymous sources, accurately predicted the home-decorating maven would be charged with obstruction of justice and conspiracy, and not with the harder-to-prove offense of insider trading.

Mrs. Stewart’s attorneys said the leaks may have influenced the grand jury’s eventual decision and violated federal rules that prohibit making grand jury proceedings public.

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