Howard P Richman, a former senior vice president of Biopure, a blood products firm in the US, has admitted that he had faked cancer to escape a lawsuit brought up by the Securities and Exchange Commission. (SEC).
Along with Biopure and two other former execs, Howard Richman was accused in 2005 by the Securities and Exchange Commission of misleading investors about the progress of the Hemopure artificial blood product, which the FDA had so far refused to approve over safety concerns
AdvertisementHemopure is derived from cow's hemoglobin, the molecule that transports oxygen to tissue. Since its founding in 1984, Biopure spent about a half-billion dollars to bring Hemopure to market, but so far in the United States has only won approval to sell a veterinary version.
According to the SEC's complaint, in March 2003 the company applied to test Hemopure on trauma patients, but the request was denied by the FDA over concerns about health risks seen in a previous trial.
In one lengthy letter the FDA told the company it couldn't conduct the new clinical trial because of ''an unreasonable and significant risk of illness or injury," according to the complaint. Later, the FDA also cited ''extensive and significant deficiencies in Biopure's application," the complaint states.
Also, the SEC said the FDA told Biopure in an April 25 letter that in an earlier clinical trial Hemopure ''was associated with a higher incidence of . . . death and cardiac arrest" compared with traditional human blood transfusions. But Biopure didn't mention the safety problems in a prospectus it filed May 6 to the SEC to sell more shares, the agency said.
And an Aug. 1, 2003, press release ''gave the false impression the company had received positive news from the FDA," the agency said. That day, the company's stock rose 22 percent, to $43.80, adjusted for reverse splits. It fell sharply subsequently.
According to the SEC, the positive news from the company continued through fall 2003 even as the FDA prevented it from testing Hemopure on trauma patients for safety reasons, rejecting two appeals from Biopure.
It finally disclosed the FDA's safety concerns in a press release issued on Christmas Eve 2003.
During the period in question, the company raised about $35 million from the sale of stock, the SEC said.
To escape the SEC litigation and settlement talks that subsequently ensued, the former head of Biopure's regulatory affairs decided that he had developed a bad case of colon cancer, which conveniently spread to his stomach and lymph nodes, according to court documents. And the needed treatment meant that he was in no condition to face trial.
To convince a federal judge that he really was in terrible shape, Richman, 57, allegedly forged a letter from his doctor and had his lawyers discuss his dire health in court. The judge eventually ended the litigation against him in 2007, unaware that his cancer diagnosis was a fabrication, according to the indictment filed against him in US District Court in Boston.
Richman last year agreed to pay a $150,000 fine to settle with the SEC over the main suit. He was scheduled to go to trial this week for obstructing justice with his cancer story when he changed his plea to guilty. He will be sentenced in June when he faces up to 10 years in prison
Hemopure was cited in a recent study in the Journal of the American Medical Association that maintained several artificial blood products increased the risk of death by 30 percent and almost tripled the risk of heart attacks in 16 clinical trials.
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