Amid a major hot streak for biotech stocks, New York Times scribe Andrew Pollack caught up with David Blech, who is heading to prison later this month after making fraudulent trades on drug company stocks. His story has become a cautionary tale in the biotech industry, which once regarded him as a major player.
As he readies for a four-year prison term, Blech is deep in debt and is holding out hope for his last major stake in a biotech company, Intellect Neurosciences, which has a market cap of just $1.5 million, Pollack reported. Blech sounds like he harbors some deep regrets for his misdeeds over the years, which led to squandering early stakes in biopharma powerhouses such as Celgene ($CELG) and Alexion ($ALXN), after his eponymous investment company cratered in 1994.
"There's no question that if I had been in a coma for the last 20 years, I would wake up a billionaire today," Blech told Pollack, who met up with the convicted felon in his Manhattan apartment.
This year at least 30 biotech companies have gone public, marking a return of the IPO market for drug developers, which were largely shunned by public investors after the 2008 financial collapse. Unlike in Blech's salad days in the 1980s, biotech companies typically need products or candidate products to go public. As Pollack writes, companies can no longer win over investors just because they have "genetic" in their name.
- get more from Pollack's article