The congressional committee investigating
is seeking new records from seven drug and biotech firms that held partnership talks with ImClone in the past.
The House Energy and Commerce Committee on Thursday sent letters to
Johnson & Johnson
Eli Lilly & Co.
Each of those companies conducted due diligence on ImClone's experimental cancer drug Erbitux -- before ImClone inked a deal with
"In response to an inquiry from Committee staff, ImClone Systems provided a list of companies with whom ImClone Systems discussed a strategic partnership relating to Erbitux prior to the tender offer by Bristol-Myers Squibb Company," the letter to Merck states.
"Your company was one of those listed," the letter continues. "It is our understanding that, prior to ImClone entering into a strategic agreement with Bristol-Myers Squibb relating to Erbitux, Merck was engaged in serious discussions with ImClone about a possible strategic partnership relating to Erbitux. Although no such strategic partnership was reached, we further understand that Merck did conduct due diligence efforts relating to ImClone and Erbitux."
Each of the seven letters sent Thursday, and released publicly, are the same.
The committee doesn't specify exactly why it is seeking this new information, but it can be assumed that it is trying to determine whether any of these companies uncovered any negative information about Erbitux, which caused them to back away from entering into a partnership with ImClone.
On Dec. 28, the Food and Drug Administration refused to accept ImClone's approval application for Erbitux. The company, and partner Bristol-Myers, have maintained that the FDA's action took them completely by surprise.
The fact that seven reputable biotech and drug firms sniffed around Erbitux before Bristol-Myers raises interesting possibilities. If any or all of these firms turned away from the deal because they uncovered failings in Erbitux, Bristol-Myers could come under additional criticism about the rigor of its due diligence. We may also learn more about what kind of information Imclone shared about Erbitux. But if investigators find that some, or all, of these other drug firms were eager bidders for Erbitux, it could partially explain why Bristol-Myers agreed to pay such a steep price -- $2 billion -- for its piece of the drug. And it would also suggest that other companies, and not just Bristol-Myers, believed that Erbitux had potential, but they all missed some failings in the way the drug was tested.
The FDA's refuse-to-file letter for Erbitux clearly states that ImClone was warned on several occasions that its clinical trial for the drug was running afoul of the agency's standards. ImClone executives, to this day, have not explained why the company failed to heed the FDA's warnings.
The House Energy and Commerce Committee is seeking to determine whether ImClone and its executives misled investors and the public about Erbitux, especially in light of insider stock sales by CEO Sam Waksal and COO Harlan Waksal before the FDA's rejected the drug. The
Securities and Exchange Commission
and the U.S. Department of Justice are conducting their own, separate, investigations into ImClone.
Shares of ImClone closed Thursday down $1.12, or 6%, to $16.77 per share.