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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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« A Former Pfizer Executive Finally Trashes Pfizer's Strategy | Main | Dendreon: Watch the Cost Curve Being Bent »

August 3, 2011

What the Bottom of the Barrel Looks Like

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Posted by Derek

Want some evil pharma/biotech executives to hate? Don't waste your time on the usual suspects. Go to Immunosyn and Argyll Biotechnologies; they're worth your while. Never heard of them, you say? Well, many of the people that have wish that they hadn't:

"These executives routinely authorized public filings that told investors a story about the status of the company's prized drug that was far different from the behind-the-scenes reality," said Merri Jo Gillette, Regional Director of the SEC's Chicago regional office. "Three of these executives went one step further to illegally profit from their tall tales by selling their company stock and reaping more than $20 million while repeatedly misleading investors about the drug.

Misleading, as in telling people that the lead drug was beginning clinical trials when it wasn't, was in the regulatory process in Europe when it wasn't, and neglecting to mention that its IND actually been placed on hold twice by the FDA and was basically going nowhere. And we haven't even gotten to the $300,000 worth of (undelivered) shares that were flogged to the hapless (and in some cases terminally ill) patients at a Texas "holistic clinic". Oh, these are some fine, fine specimens of humanity we're talking about

Comments (16) + TrackBacks (0) | Category: The Dark Side


COMMENTS

1. lc400hurdler on August 3, 2011 12:56 PM writes...

Wow

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2. PharmaHeretic on August 3, 2011 1:00 PM writes...

Come on.. what about the current wave of Phase III trial failures? Don't you think that they are due to similar behavior on a larger scale.

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3. leftscienceawhileago on August 3, 2011 1:18 PM writes...

Derek, you missed the best quote on this one:

[Argyll Chief Scientific Officer Douglas] McClain Sr. also made … misstatements in a 2008 presentation in which he sold his stock to individuals that attended the presentation at a Texas holistic clinic, some of whom were terminally ill patients at the clinic. McClain Sr. purported to sell Immunosyn stock to approximately 15 of these attendees at the presentation at the clinic, including some terminally ill patients, raising over $300,000 from them. He took their money but never gave them their Immunosyn stock.


http://dealbreaker.com/2011/08/not-that-you-were-waiting-on-fda-approval-to-inject-yourself-with-goat-blood-but/

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4. leftscienceawhileago on August 3, 2011 1:29 PM writes...

oh geeze, I guess I just missed the bottom paragraph.

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5. Brooks on August 3, 2011 2:14 PM writes...

Derived from goat's blood, eh? Isn't that more typically used for invoking demonic beings to make unwise pacts with, rather than pharmaceuticals? Seems rather appropriate here.

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6. GreedyCynicalSelfInterested on August 3, 2011 2:35 PM writes...

Do these guys still get to keep the money? That's the important issue.

Taking money from dying people? That's an interesting angle.

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7. Anonymous on August 3, 2011 3:11 PM writes...

There's a couple of pretty big UK academic names on Argyll's payroll.

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8. Another Kevin on August 3, 2011 6:10 PM writes...

@PharmaHeretic - "Wave of Phase III failures?" I thought failure was the usual, expected, routine outcome of a Phase III trial. Having one succeed is like winning the lottery. But it costs a lot more to play.

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9. Anonymous on August 3, 2011 8:32 PM writes...

Actually, here's what the bottom of the barrel looks like:

$25 a gallon gas, $15 loaf of bread, 1 US dollar = 40 cents canadian. Great if you live in Canada or have ways of moving money up there heh! The swiss franc looks very enticing! LOL

The current US pres is driving this country into the ground and the debt is skyrocketing.

People, wake up! start loading up on food etc while its cheap (cans last long), save money, move money into gold etc...

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10. sepisp on August 4, 2011 2:43 AM writes...

In the olden days this kind of people would be burned at stake. "Fortunately" today they'll only be ordered to pay civil damages which they never actually pay.

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11. Matt Dillon on August 4, 2011 9:34 AM writes...

# 10 sepisp
Good point about "fortunately." Not getting into the capital punishment debate here, but back in the days when the punishment fit the crime, and justice was swift, would-be criminals at least considered the penalties for their illegal activities before commiting them.

Nowadays a person could commit some heinous crime and feel confident that, even if convicted, they'll never see the gallows, and maybe get out in 20 years for good behavior. Plus they'll get free room, board, and medical care for the duration.

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12. cynical1 on August 4, 2011 1:08 PM writes...

I remember this company! They were the ones that made this huge media compaign about using their goat extract in multiple sclerosis patients. They even had one of the Osmond brothers (anyone old enough to remember them?) hyping how wonderful it was.

My wife has MS so I got a lot of e-mails about this company years ago. I looked into their IP and have ignored them ever since. But when you have a disease like MS, a lot of patients have to hope for something so they believe the hype only to have their hopes dashed to smithereens later by douchebags like these guys. I hope there's a special little place in hell for people who prey on sick people. Or, if I wind up there, I'll just take care of them personally (along with a few old bosses.) Sad world we live in.........

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13. newnickname on August 4, 2011 1:26 PM writes...

\sarcasm_warning{on}
I don't know if I would be so quick to judge. A typical financial disclosure might include something like:

Statements contained in this Report may constitute “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. For this purpose, any statements herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words “believes”, “anticipates”, and similar expressions are intended to identify forward-looking statements. Such forward-looking
statements are based on management’s current expectations and involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. These forward looking statements are subject to a number of uncertainties and other factors, many of which are outside the Company’s control, that could cause the Company’s actual results to differ materially from those indicated by such statements. [...]

This is just legalized lying. They were perfectly within their rights.
\sarcasm_warning{off}

My experience in biotech is that this happens all too often even if it isn't quite this extreme. I have a solution, but their is no disclaimer legalizing it.

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14. Mike on August 4, 2011 2:39 PM writes...

There is a difference between "legalized lying" as covered by that disclaimer, and just plain lying. That difference lies in the line, "Such forward-looking statements are based on MANAGEMENT'S CURRENT EXPECTATIONS." It becomes just plain lying when the management never had any such expectations.

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15. newnickname on August 4, 2011 4:42 PM writes...

@14: Although it certainly transcends biotech, management usually knows but needs to cover their lie-ability with the pretense of ignorance of the facts. I know of people who were marginalized and fired for providing too much info to management.
(People tell me I should write a book!) In my own exuberant, naive days, I would sometimes point out interesting info or express a fact-based dissenting "opinion" in meetings. I can still visualize the nervous looks on management faces but they didn't change the powerpoints and they still went out to put on the dog and pony shows. And they still enhanced their personal fortunes while killing the company.

Oops. In #13, I said "their" instead of "there".

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16. lotsofemoutthere on August 4, 2011 5:50 PM writes...

Take a look at Cellceutix, same thing. They are claiming people on their SAB that don't even know them.

S-alkylisothioureas as novel selective inhibitors of one thing, and then another.

Despite warnings to the FDA, SEC, and the AACR, the NIH still deemed them worthy of a big grant at the taxpayers expense.

and people wonder why pharma research has such a bad rap these days

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