Biotech mogul Sam Waksal – who landed in prison two decades ago over the ImClone insider trading scandal that also resulted in jail time for Martha Stewart – allegedly tested an illegal “swine drug” treatment on a child with epilepsy, according to a bombshell lawsuit.
Waksal, who is not a medical doctor, imported the veterinary drug along with other “unapproved ingredients” from Colombia to treat a “severely ill” child whose mother worked for the company, according to the complaint filed this week in federal court in Manhattan.
Waksal allegedly monitored the child’s response to the drug in an effort to develop a similar product for his former company, Equilibre Biopharmaceuticals, the lawsuit alleged.
The alleged dosing took place over “a several month period” and came to light when an Equilibre whistleblower exposed the scheme in 2022, Neal Brickman, an attorney representing Equilibre, told The Post.
The child’s health status is not known, according to Brickman.
The whistleblower, who was an employee at the time, also accused Waksal of sexual harassment and of creating a hostile work environment, according to the complaint – though the lawsuit does not provide details.
Waksal, now 77, famously sold off his ImClone shares in 2001 after he learned that the FDA would not approve the company’s cancer drug. He served five years in prison for securities fraud while Stewart served five months for lying about why she sold her ImClone shares before they tanked.
Waksal declined to comment when reached this week, but he provided The Post with screenshots of text exchanges that he claimed were between himself and the mother of the child in 2022 after she learned about the investigation.
“I hope they understand that we’re dealing with a dying child and you were being kind and compassionate,” the mother allegedly wrote. “I fully understood the risks.”
The Post was not able to independently confirm that the texts, which appeared to span a period from May 2022 to December 2022, were from the mother.
“Sam knew the drug was not approved [by the FDA] for use by a human but he did it anyway,” Brickman said. “He brought the drug into the country illegally by improper means and he administered it knowing he shouldn’t do that.”
“He stopped treating the child when the company found out that he was doing this — not because the child got sick or better from the dosing,” Brickman added.
Waksal is also accused of impeding the investigation by placing the mother on administrative leave from her job at Equilibre to prevent her from talking to the investigators, according to the complaint.
Another witness was also offered $100,000 of company funds to influence her participation in the investigation, according to the complaint.
The allegations sparked an investigation conducted by two outside law firms, which resulted in Waksal’s forced resignation in 2022 as chairman and chief executive of Equilibre, which he had founded just two years earlier, according to the complaint.
Equilbre informed the FDA about the incident, according to the complaint.
“There was no official reprimand as far as we are aware of,” Brickman said.
This lawsuit names Waksal, three Equilibre directors and another biotech firm Waksal owns – Graviton – as defendants, accusing them of “reckless disregard for legal, ethical and corporate governance standards.”
The board members, including one who gave the drug concoction to his ill dog who died the next day, are described as complicit in the scheme, according to the filing.
After Waksal was removed from Equilibre, he began to “sabotage” the company, according to the complaint, steering investors to Graviton and “converting” Equilibre’s research, intellectual property and other assets to Graviton.
Equilibre filed for bankruptcy protection in 2023 and a US trustee who represents the company’s creditors filed the complaint, which is seeking at least $150 million.
A spokesperson for Graviton issued a statement: “Graviton Bioscience is performing innovative, genuinely ground-breaking scientific work in multiple disease areas that could, in the near-term, dramatically improve the lives of patients suffering from cancer, Lou Gehrig’s Disease, Alzheimer’s, autoimmune disorders, and multiple other indications.
“With such robust prospects, it is perhaps no surprise that Graviton is a target. The Company is aware of the filings, which we know to be without merit, and will launch a vigorous defense.”
Graviton received an undisclosed investment last year from Sanofi, which acquired another company Waksal founded – Kadmon – for $2 billion in 2021.
This story originally appeared on NYPost
