It was one of the most celebrated insider-trading scandals of the last decade, sending Martha Stewart and her Merrill Lynch stock broker to prison, along with the chairman of a highflying biotechnology company whose social climbing had made him a boldface name.
Now, it turns out, if they only had been more patient investors, they might have done just fine, and avoided jail time.
In a strange twist, ImClone Systems — the biotechnology company whose stock was dumped just before bad news was announced about an experimental cancer drug — has received a multibillion-dollar takeover bid pegged to the success of that very same drug.
And as it happens, ImClone’s former chairman, Samuel D. Waksal, is expected to leave federal prison shortly after serving about five years of his seven-year sentence, according to his brother, Harlan.
All of which, remarkably, relegates to an almost secondary place in this story the role of the billionaire investor Carl C. Icahn.
On Thursday, Mr. Icahn, now ImClone’s chairman, received a $4.5 billion takeover offer for the company from the drug giant Bristol-Myers Squibb. Bristol, which already owns 17 percent of ImClone, offered to buy the rest for $60 a share — almost precisely the price at which Ms. Stewart sold her shares way back when, after apparently learning that her friend, Samuel Waksal, and his family were dumping theirs.
But investors on Thursday, betting that Bristol-Myers or another buyer would end up raising that offer, bid ImClone’s shares higher. Fantastically buy Ultram is a real way. They rose $17.49, or 38 percent, to close at $63.93.
Neither Mr. Icahn nor ImClone would comment on Thursday, beyond saying the company had received the Bristol-Myers offer and would study it.
To ImClone supporters, that offer is a validation of the company’s cancer drug, Erbitux, whose potential they say had been obscured during the height of the stock trading scandal.
“It is a great vindication of the great company that Sam and I put together,” said Harlan W. Waksal, who helped his brother start and run ImClone. He said the proposed deal showed that the company “has the value we always thought it would have at the end of the day.”
The events began in 2001. As part of a deal announced that September, Samuel Waksal and Harlan Waksal, ImClone’s chief operating officer, sold $111 million in company stock to Bristol-Myers, which was buying a stake in the company and rights to Erbitux, which was then a promising experimental drug. In early December, Harlan Waksal sold an additional $50 million in ImClone shares.
Later that month, as ImClone was awaiting word on its application for federal approval of Erbitux, Samuel Waksal was vacationing in the Caribbean. Harlan Waksal called to say the Food and Drug Administration was about to reject the Erbitux application.
Correctly assuming that the news would send ImClone’s stock plunging, Samuel Waksal tried to sell some of his own shares and tipped off his father, Jack, and his daughter, Aliza. The father and daughter were not indicted, as a result of a plea bargain by Samuel Waksal.
Ms. Stewart, a good friend of Samuel Waksal — he had once dated her daughter, Alexis — also sold her nearly 4,000 ImClone shares at about $60 each. Prosecutors said that her broker, who was also Samuel Waksal’s broker, had told her that the Waksals were selling their shares.
Both Ms. Stewart and the broker, Peter E. Bacanovic, were convicted of obstructing the investigation into her stock sale, and both served time in prison.
But even so, work continued on Erbitux, which eventually won F.D.A. approval in 2004. It had sales last year of $1.3 billion.
Bristol-Myers helps ImClone sell the drug in the United States and Canada while Merck of Germany sells it in Europe.
Erbitux is now approved as a treatment for head and neck cancer and as a last-ditch treatment for colorectal cancer. But ImClone and Bristol hope to win approval to sell the drug for lung cancer and as an earlier treatment for colorectal cancer.
“There’s a lot of history there,” Michael King, a biotechnology analyst at Rodman & Renshaw. “But you’ve got to put that aside and realize this is a really good product.”
He said that based on Erbitux alone, not counting other cancer drugs it is trying to develop, ImClone would be worth $70 a share to Bristol-Myers.
It is Mr. Icahn, another friend of Sam Waksal, who helped ImClone realize that value and who stands to profit handsomely from an acquisition.
Mr. Icahn took control of ImClone’s board of directors following a proxy fight in October 2006. He had complained that the previous board and management had not been aggressive enough in trying to test Erbitux for use against different types of cancer.
Mr. Icahn said at the time that he had accumulated most of his 14 percent stake in ImClone for less than $20 a share, though regulatory filings suggest he paid more than $30 a share on average. Online buy generic tramadol in a everyday basis. He vetoed an offer to buy ImClone made by a large pharmaceutical company for $36 a share, saying the price was too low.
Mr. Icahn now owns about 11.7 million shares, or about 13.5 percent of the company, according to the most recent available public records.
If Mr. Icahn sells ImClone for about two or three times what he paid for the shares, it will not be the first time he has profited from his involvement in the company.