ImClone Systems chief scientific officer Mr Harlan Waksal has resigned, severing the company's ties with its scandal-ridden founders.
Mr Waksal's resignation comes as his brother Samuel, ImClone's former chief executive, is about to begin serving an 87-month prison term for tax evasion and insider trading in a scandal that has tainted Ms Martha Stewart, the lifestyle trend-setter.
The Waksal brothers founded ImClone, a biotechnology company, in 1984. When Samuel Waksal resigned as chief executive in May 2002, two months before being arrested, Mr Harlan Waksal took over the top job.
Nearly a year later, he resigned as chief executive in connection with a federal tax probe and took the post of chief scientific officer.
His departure from the company follows the resignation last week of chairman Mr Robert Goldhammer.
The resignations come just months before expected marketing approval for Erbitux, ImClone's experimental colon-cancer drug that some analysts believe could be a blockbuster.
Mr Waksal's resignation can only help improve ImClone's public image as it claws its way back to respectability. Critics have long said the company would remain tarnished as long as he remained on board.
"My departure has nothing to do with any concern about Erbitux, its testing or its regulatory process," Mr Waksal said in a statement.
In December 2001, US regulators said they would not review ImClone's application for approval of Erbitux, citing deficiencies in the design of clinical trials of the drug and the sloppy organisation of the application.
The regulators' decision sent ImClone shares tumbling lower.
Before the decision was announced, Mr Sam Waksal tried to sell his ImClone shares. Prosecutors allege he tipped off his father and his daughter to sell their stakes as well.
Ms Stewart, a close friend of Mr Sam Waksal, sold ImClone shares one day before the Erbitux decision became public. She has been indicted on charges of obstruction of justice in the matter. ImClone shares were up 93 cents, or 2.72 per cent, at $35.16 on Nasdaq trade last night.
