The bad news never seems to end for


(IMMU) - Get Report


The biotech company's shares tumbled nearly 6% Tuesday after the

Food and Drug Administration

accused a testing facility the company has worked with, the

Garden State Cancer Center

, of testing experimental radioactive drugs on some 72 patients without FDA permission. The agency also charged the center with a litany of other violations of FDA drug-testing rules, including billing patients for experimental drugs without FDA approval.

In one case, a patient in a drug trial developed a severe cardiac response that required emergency surgery, the FDA said in a warning letter to Garden State that was released Tuesday. The FDA said the drug could have been a cause of the emergency. Neither Immunomedics nor Garden State immediately returned calls seeking comment.


Garden State, of Belleville, N.J., was founded by David Goldenberg, CEO of Immunomedics and until last month tested only Immunomedics cancer drugs. The FDA in August

suspended all 11 clinical trials of cancer drugs at the center following a five-week investigation. In addition, the

Justice Department

launched an

investigation into Immunomedics and Garden State and last week subpoenaed documents from Garden State's former head of clinical trials, Malek Juweid.

The subpoena, released by Juweid's attorney, Walter Lucas, didn't disclose the nature of the investigation, although it cited possible "violations or conspiracies to violate a health care benefits program." The

National Institutes of Health

has allocated more than $4 million in recent years to test drugs at Garden State, according to Juweid. Lucas said Juweid wasn't the focus of the investigation.

Immunomedics shares have fallen by nearly a third since

reported last week that the FDA was scrutinizing clinical trials in the wake of a patient death.

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In a press release Friday, Immunomedics acknowledged that the FDA had suspended clinical trials at Garden State, but said the suspension was due to "deficiencies in monitoring and record-keeping, and not any product-related adverse events or certainly any deaths."

Yet the FDA said in the letter that one patient "suffered a severe adverse event that your firm designated as possibly related to therapy." The company has previously stated that no patients at Immunomedics-sponsored trials have suffered drug-related deaths, but two people familiar with the situation said one patient died in the spring at a Garden State-sponsored trial that may have been due to an Immunomedics drug.

Calls to Goldenberg for clarification weren't returned. The FDA says it never comments on its investigations.


The FDA released the letter the same day that Immunomedics said it commenced final, Phase 3 testing of LymphoCide, a treatment for lymphoma that is its most advanced drug in development and one that is considered its most promising.

The company said it intends to test the drug at a number of different trial centers, including

Cornell Medical Center

in New York. But analysts said the FDA disclosures could throw a cloud over the drug's progress through clinical trials. In addition, the company's efforts to find a corporate partner for LymphoCide could also be affected, they said.

"You don't want to antagonize the FDA," said Robert Toth, a biotechnology analyst at

Prudential Vector Securities

, which has no formal rating on Immunomedics. "The agency has an incredible amount of control over biotech drug testing. An FDA investigation always adds an element of risk to a story."



, for instance, lost two-thirds of its market value in August after the FDA found major flaws in how it tested Adcon, a treatment for surgical scarring. Tuesday, Gliatech said its chief executive, Thomas O. Oesterling, and other board members resigned amid shareholder and other lawsuits.

Immunomedics is one of a handful of companies developing so-called monoclonal antibodies to treat various cancers. The genetically engineered proteins are designed to seek out and kill cancer cells.

Idec Pharmaceuticals

( IDPH),





( DNA) are also developing similar drugs. LymphoCide has been tested in "hot," or radioactive, elements and "naked," or nonradioactive, forms.