ImClone Founder Waksal Forming New Biotech Venture

NEW YORK (TheStreet) -- Samuel Waksal, the former CEO of ImClone Systems whose insider stock tips landed him and friend Martha Stewart in federal prison, is getting back into biotech in a big way.

Waksal is trying to raise $50 million for a new privately held biopharmaceutical company, according to a confidential fund-raising prospectus obtained by TheStreet.

Kadmon I LLC, of which Waksal is managing member, would acquire, develop or license new drugs targeting cancer and infectious diseases. Kadmon is also in negotiations to acquire an unidentified drug company to use as its operational base, although binding agreements are not yet in place, according to the prospectus dated Feb. 3.

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Samuel Waksal, the former CEO of ImClone Systems

Waksal and his team intend to sell a 50% stake in Kadmon to qualified investors for $50 million, which would value the company at $100 million. The offering could be upsized to as much as $175 million if demand warrants, according to the prospectus. TheStreet obtained the confidential Kadmon offering from a prospective investor who was considering an investment in the new venture. David Pitts, a spokesman for Waksal, said Kadmon was still in the early stages of development and therefore declined to offer any details but he did confirm that Waksal is currently seeking investors to fund the new company.

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"His basic idea is to pick up interesting drug compounds for development that other companies have orphaned," said a different person familiar with Waksal's plans, but who did not want to be identified because he's not authorized to speak on Waksal's behalf.