By PAUL ELIAS, AP Biotechnology Writer
Too bad Martha Stewart (news - web sites) and Sam Waksal weren't more patient with their investments in scandal-plagued ImClone Systems Inc. On Monday, the company's share price soared past pre-scandal levels and reached a two-year high, rising 12 percent to close at $66.38 in trading on the Nasdaq Stock Market.
The stock hasn't been that high since Waksal desperately tried to unload close to 80,000 shares in the company before a regulatory setback was to be announced in December 2001. Waksal and his family's attempts to sell their stock at around $60 a share prompted Stewart to do the same - actions that ultimately led to felony convictions for Waksal and Stewart.
Much of New York-based ImClone's gain Monday was attributed to a Banc of America analyst's rosy report urging clients to buy the stock.
A federal jury convicted Stewart last month of lying to investigators about why she sold her 3,928 ImClone shares on Dec. 27, 2001, the day before a disappointing government report on its cancer drug Erbitux was made public.
Stewart sold after being tipped by her stockbroker that Waksal, then ImClone's chief executive, was trying to sell much of his stake in the company.
Waksal is serving a seven-year sentence in federal prison after admitting he tipped his daughter to sell her ImClone shares based on advance word of the government report.
While Waksal's daughter, father and Stewart did manage to sell their stock ahead of the bad news, two brokers refused to execute Waksal's sell order.
According to a Securities and Exchange Commission (news - web sites) filing last year - the most recent available - Waksal still owns 1,415,317 ImClone shares. The company is suing for return of 833,000 of those shares.
Waksal's brother, Harlan Waksal, who stepped down as the company's chief scientific officer last year, still owns 3,106,847 shares, according to the SEC filing.
The Food and Drug Administration (news - web sites) finally approved Erbitux in February and analysts expect sales of about $12 million for its first three months on the market.
On Monday, Banc of America analyst Mike King said that for the last two years the scandal has overshadowed the company's potential and bullish expectations that Erbitux will become nearly a $1 billion-a-year blockbuster by 2007.
King forecast ImClone share's reaching above $91 within a year and recommended his clients invest in the company.
"People have turned up their noses at ImClone because of the scandal and because of all the extracurricular activity," King said. "It's obscured the fact that Erbitux is off to a good start."