Waksal's new biotech spins out its gene therapy biz with an IPO in mind

Kadmon's Sam Waksal

Kadmon, a biotech company founded by the once-jailed former CEO of ImClone, is spinning out its gene therapy division on the path to a long-promised IPO, touting a novel approach to the fast-moving field.

The company, run by brothers Sam and Harlan Waksal, is launching Kadmon Gene Therapy, or KGT, to develop candidates based on its proprietary genetic regulation technology. KGT's platform uses riboswitches, components of messenger RNA, to either activate or silence target genes, a method the company believes can achieve greater safety and efficacy than the current generation of gene therapies.

The biotech plans to get four candidates into clinical trials next year. KGT's first targets will be in ophthalmology, and it's also working on a treatment for dry mouth tied to radiation therapy. Alexandria Forbes, Kadmon's former chief commercial officer, will serve as CEO of the spinout.

"By transferring Kadmon's gene therapy and gene regulation research into a separate, highly focused entity, we can rapidly develop these assets and realize the intrinsic value of our gene therapy programs," Harlan Waksal said in a statement.

Kadmon has largely operated under the radar since its foundation in 2009, just after Sam Waksal wrapped up a prison bid for his role in an insider trading scandal. The company raised a reported $500 million in equity and built out its pipeline through a series of quiet deals, and Sam Waksal told CNBC in September that the next step was an IPO. His promise of a filing by year's end never came to fruition, but the company still plans to find its way to Wall Street.

But whether investors are willing to get behind him remains an open question. The ImClone scandal, which landed Martha Stewart in federal prison, casts a long shadow. And part of his punishment is a lifetime ban from serving as a director of a public company, which is why his brother is Kadmon's CEO.

- read the statement