Waksal may exit jail in time to toast ImClone sale

By Bill Berkrot

NEW YORK, July 31 (Reuters) - Former ImClone Systems Inc IMCL.O Chief Executive Sam Waksal may be released from prison just in time to attend "going away" drinks for the biotechnology company he founded with his brother.

Bristol-Myers Squibb Co (BMY.N) offered to buy ImClone on Thursday for $60 per share, about $2 more than the price at which Waksal and his friend Martha Stewart, the style guru, unloaded their stock, based on the inside information that landed both of them behind bars.

Waksal earned a seven-year prison sentence for tipping off friends and relatives in December 2001 that the company's highly hyped cancer drug -- for which he had obtained a $2 billion investment commitment from Bristol-Myers -- was about to be rejected by U.S. regulators.

Stewart spent five months in prison for lying to investigators about her suspicious stock sale.

An art collector and one-time regular on the New York social scene who rubbed elbows with rocker Mick Jagger and actress Mariel Hemingway, Waksal is expected to be released from prison as early as next month after serving about five years of his sentence, according to a published report.

Officials at the federal prison in Milan, Michigan, where Waksal currently is serving time, would not confirm the report, saying only that his official release date is February 2009. Waksal's lawyer wasn't immediately contactable.

A New York Magazine article earlier this month said Waksal has told friends he will be released in August and transferred to a halfway house in the Bronx, New York.

While Waksal went from tailored suits to prison jumpsuits, ImClone shares fell as low as $6 to $7 and soared as high $87.

With the ex-CEO behind bars, the rejected drug Erbitux eventually won approval and has become a successful treatment for colon and head and neck cancers. Waksal's former tennis partner, billionaire investor Carl Icahn, has become ImClone's chairman.

The shares jumped almost 40 percent to a high of $65 in Thursday trading -- the biggest one-day jump since 1995 -- reflecting investors' expectations that Bristol-Myers will be forced to raise its bid. The stock closed up 38 percent to $63.93 on Nasdaq.

It was not immediately known how many ImClone shares, if any, Waksal still owns. At one stage, he controlled more than 580,000 shares.

If Waksal had had the fortitude to weather the bad news in silence back in 2001, neither he nor Stewart would have ended up in prison, and both might have reaped the rewards of the company's recovery. (Editing by Jeffrey Benkoe)