This is Chapter 11 of a 15 chapter series. The entire series is listed here
Who in the government helped sabotage Dendreon? Despite the lobbying by the captured doctors,
despite the Wall Street whispering, despite the singing Sendek and the media mimics — despite all of this,
it still seemed likely that the FDA would heed the advice of its advisory panel.
Instead, the FDA told Dendreon that it would not yet approve its treatment — that the company had to get
more data, which would take years, by which time the company could easily run out of money. The FDA
handed Dendreon what seemed like a death sentence (and to thousands of prostate cancer patients, it
was). This was a strange occurrence. It must have followed from some decision made by government
officials in high places.
One official who might have advocated against Dendreon was then FDA Commissioner Andrew von
Eschenbach, who was a close ally of Michael Milken. Dr. von Eschenbach was a founding director of
Milken’s Prostate Cancer Foundation, and later he was at the forefront of an ultimately unsuccessful effort
to convince George Bush to grant a presidential pardon forgiving Milken for his crimes. But it is clear that
von Eschenbach was not the only official courted by Milken and his associates.
Long before I came along, an assortment of Dendreon shareholders, prostate cancer patients, honest
folks on Wall Street (there are some), and concerned citizens spotted the connections among Milken,
ProQuest Investments, and the captured doctors who led the lobbying effort against Dendreon. When the
FDA failed to approve Provenge, these folks saw that an injustice had been done, and they hollered
loudly. Soon after, a grass roots organization called Care-to-Live was founded to advocate on Dendreon’s
Care-to-Live (to whom I owe a debt of gratitude for uncovering some of the information that appears in
this story) has not only chronicled Dendreon’s travails, but has also labored tirelessly to right the wrongs.
It has organized street protests and letter-writing campaigns. It has lodged Freedom of Information Act
requests and it has filed a lawsuit against the FDA. In the course of these efforts, it managed to get a hold
of various documents and email communications between Dr. Scher (the physician with financial ties to
Milken’s companies and “philanthropy”) and officials in the government bureaucracy.
What these documents and emails show is that Dr. Scher and his allies depended largely on support from
a mid-level FDA employee and a key employee at the National Cancer Institute, which oversees
government funding of cancer initiatives, and has considerable, though unofficial, influence over FDA
decisions. Over the years, Milken and his Prostate Cancer Foundation have made great efforts to
ingratiate themselves with the NCI, which may be one reason why Dendreon was never able to receive
government funding, despite the revolutionary potential of its treatment.
On March 31, 2007, Alison Martin, who was in charge of the prostate cancer division of the National
Cancer Institute, emailed Dr. Scher, who was busy crafting the missive that would be published with
mysterious immediacy by The Cancer Letter. “Glad to hear letter is being drafted,” Martin wrote. “If that
[FDA] division’s vote suggests [that Dendreon’s treatment] be considered for approval, I was wondering if
it then could go to ODAC, which is more clinically savvy, i.e. this is just a step in a process.”
The “division” whose possible approval of Dendreon’s treatment so discomfited Dr. Martin was the FDA’s
Center for Biologic Evaluation & Research (CBER), which was assigned the task of evaluating
Dendreon’s application. Martin was suggesting that if CBER were going to approve Provenge, perhaps
the matter could be taken to ODAC – the FDA’s Oncologic Drugs Advisory Committee, which was led by
an FDA official named Dr. Richard Pazdur.
Pazdur has a close relationship with a Washington lobbyist named Samuel D. Turner. Some years ago,
Turner, who helps run an organization called the Cancer Leadership Council, led a campaign to have
Pazdur appointed as the commissioner of the FDA. Michael Milken supported that campaign. And
Milken’s advisors, such as Dr. Donald Coffey of the Prostate Cancer Foundation, have collaborated
closely with Turner in another cancer lobbying group called C-Change, of which the Cancer Leadership
Council is an affiliate.
As a result of this support, Milken and Pazdur have become very close friends.
Some years ago, a U.S. Congressional investigation determined that Pazdur, through his lobbyist friend
Turner, had leaked inside information that the FDA was going to reject Erbitux, a cancer drug that was
developed by ImClone. As you will recall, that inside information made its way to Martha Stewart, setting
in motion the chain of events that landed her in jail. The ImClone inside information also was first
published in The Cancer Letter, the same rag that published Dr. Scher’s “confidential” letter to the FDA.
And, remember, the records of phone calls made to ImClone at that time raise the distinct possibility that
funds managed by Milken cronies Carl Icahn, Steve Cohen, and Dirk Ziff also were privy to that
information before it was made public.
As an aside, after ImClone’s stock crashed on the news, the company was seized by Milken crony Carl
Icahn. And soon after Martha Stewart received the inside information, but before she was caught, hedge
funds in the Milken network began short selling Martha Stewart’s company, Martha Stewart Living
Omnivision. One hypothesis that explains the exquisite timing of those hedge funds is that the funds knew
Martha was about to be arrested and therefore shorted her company on the assumption that news of her
arrest would crash the stock. They may well have been the ones who turned her in. But that is a story for
For now, it merely needs to be emphasized that Pazdur, the FDA official, has unusually close
relationships with Milken and some of his cronies. He was a key player in the ImClone scandal, which
displays remarkable similarities (such as hedge funds in the Milken network betting with great prescience
and insider information mysteriously appearing in The Cancer Letter) to the Dendreon scandal. And with
the apparent encouragement of Dr. Scher and Alison Martin at the National Cancer Institute, Pazdur
appears to have played a key role in derailing Dendreon’s prostate cancer treatment.
Pazdur was not supposed to be the one who decided whether Dendreon’s drug was approved. Instead,
because the drug is a biologic, the decision rested with the FDA’s Center for Biologics Evaluation and
Research (CBER). Nonetheless, Pazdur inserted himself into the decision process. It was at Pazdur’s
behest that Dr. Scher and Dr. Hussain were, despite their ties to competing companies controlled by
Milken’s funds and friends, appointed to the advisory panel that voted on Dendreon’s application.
As you will recall, Dr. Scher and Dr. Hussain were among the four panelists who quickly voted “No” to the
incorrectly phrased question about Dendreon’s effectiveness. When the phrasing was changed to the
correct, legally mandated question ( Is there “substantial evidence” that the drug reduces mortality?) the
remaining 13 experts on the panel voted “Yes.”
According to eyewitnesses, just as panelists began noticing that there was something strange about the
question they were being asked, Pazdur began passing notes to Dr. Maha Hussain, who then attempted
to instill further confusion, apparently hoping that the panelists would continue voting on the incorrectly
phrased question. Pazdur, who had come to the meeting uninvited and unannounced, also spent a good
deal of time conversing with Dr. Hussain, giving the impression that they were working together to devise
arguments that might turn the panel against Dendreon.
Curious to know whether it was Pazdur who ultimately derailed Dendreon’s application, perhaps even
delivering the captured doctors’ “confidential” letters to The Cancer Letter – and wondering whether this
had anything to do with Pazdur’s relationship with Michael Milken — Care-to-Live, as part of its lawsuit
against the FDA, subpoenaed Pazdur’s relevant emails and documents. Pazdur responded under oath as
“I searched both my paper and computer files and was unable to locate any documents that were
responsive to Plaintiff’s requests. I recall receiving…these letters…However, as these letters
related to a specific regulatory application conducted by a different FDA Center (CBER), did not
fall under my direct regulatory supervision…I shredded my hard copies of these letters and
deleted any electronic copies. The documents were shredded and deleted within a month of
This response was strange indeed. For one thing, Pazdur seemed to be stating that he had no
involvement in the Dendreon decision. If that were the case, what was he doing at the advisory panel
meeting? Pazdur’s statement also contradicted an earlier statement from the FDA. In response to
complaints that Pazdur had participated in a decision that was supposed to be left to the CBER division,
the FDA said that he had done so “at CBER’s request.” Clearly, Pazdur had been involved in the
decision, so it was disingenuous for him to state otherwise in his efforts to explain why he had shredded
and deleted all the relevant documents.
Moreover, if Pazdur is telling the truth (and not, that is, simply obstructing justice), then Pazdur violated
the spirit of various initiatives, including a bill passed in the U.S. House of Representatives and directives
from the Archivist of the United States, aimed at ensuring that government employees maintain records of
their official business. The reason that government officials are asked to keep good records is that they
are sometimes involved in controversies – controversies such as the one that was swirling around
Dendreon’s FDA application when Pazdur began shredding and deleting so promptly and thoroughly all
relevant documents, paper and electronic.
In any case, most of the documents that Care-to-Live requested had been transmitted electronically,
meaning that a simple computer excavation could have retrieved them, even if they were deleted. Clearly,
Dr. Pazdur had reason not to hand over those documents. Perhaps he was advised not to by his lawyer,
who happens also to be the same lawyer who represents The Cancer Letter, the rag that published the
“confidential” letters that Dr. Scher and Dr. Hussain wrote to Dr. Pazdur and FDA commissioners.
Fortunately, Alison Martin of the National Cancer Institute did not shred everything – she handed over at
least some of her documents. And the email quoted above suggests that her plan was to get Dendreon’s
application out of the hands of the designated authority, CBER, and into the hands of Richard Pazdur. In
response to that email, Dr. Scher wrote to Martin that he, too, would try to have Dendreon’s application
“reviewed by ODAC” (which was controlled by Pazdur). In a follow-up email, Dr. Scher wrote: “Got a
minute for quick question related to FDA processes?”
A minute later, Martin responded: “Consider this confidential, please…but I wanted you to know.” As to
what confidential information she delivered to Scher, that is unclear from the documents received by
Care-to-Live. Perhaps the telling documents were also promptly shredded.
But other documents and emails show that by early April, 2007, as the hedge funds were building up their
short positions, Martin was fully engaged in helping Dr. Scher draft his letter trashing Dendreon — the
“confidential” letter to the FDA that would be quickly published by The Cancer Letter. Indeed, a copy of a
half-edited draft of Dr. Scher’s letter was found on Martin’s computer. And in one email, Martin appears to
complain about all the work she has done on this letter. “Maybe you should write a letter, too,” she jokes.
So Martin, the head of the prostate cancer unit at the National Cancer Institute, was helping a doctor – a
doctor with financial ties to Michael Milken and to a competing, Milken-invested company — sabotage
Dendreon’s treatment for prostate cancer. That is, an employee of the federal government was helping a
conflicted doctor lobby the federal government.
As news of this started to reach Dendreon’s supporters, Martin left her job at the National Cancer
Institute. Soon after, she was appointed president and chief executive officer of the Melanoma Research
Alliance (where one can safely suppose her compensation exceeds her previous government salary).
The Melanoma Research Alliance was a brand new “philanthropic” outfit. It had just been set up by a
The name of the “prominent philanthropist” is, of course, Michael Milken.
Milken founded the Melanoma Research Alliance and hired Alison Martin with an initial grant from Leon
Black, the “prominent” billionaire and Milken crony who does business with an alleged Russian mobster
named Felix Sater.
Sater, remember, is the fellow alleged to have sent the threat to have Deep Capture reporter Patrick
Byrne murdered if Patrick did not end his crusade against abusive short selling and the “deep capture” of
the nation’s regulatory bodies.
On May 11, three days after the FDA failed to approve Dendreon’s treatment, The Wall Street Journal
published a report that purported to investigate the allegations that the government approval process had
been compromised. This “investigation” entailed asking Dr. Scher whether he had any conflicts of
“’I try to keep to the high ground,’” Dr. Scher told The Journal. Apparently content with his reply, and
eager to assuage any suspicions that something nefarious had gone down, The Journal added that Dr.
Scher “serves as an advisor to Innovive, a small biotech not involved in prostate cancer, and works with
Bristol-Myers Squibb in an unpaid capacity on early stage drugs that may hold promise in prostate
cancer. He and his wife hold small amounts of stock in Biogen, Idec and Pfizer.”
That was it. According to the Journal, Scher had no conflicts of interest.
The Journal did not mention that Dr. Scher was a board member and executive of Milken’s ProQuest
Investments. It did not mention the fact that ProQuest was heavily invested in Novacea, a Dendreon
competitor. It did not mention that Dr. Scher was leading the trials of Novacea’s prostate cancer drug, or
that he was a paid director on the advisory board of another Dendreon competitor – Milken crony Lindsay
Rosenwald’s Cougar Biotechnology. And it did not mention that Dr. Scher was leading clinical trials for yet
another Dendreon competitor, Cell Genesys, which, like Cougar and Novacea, was supported by Milken’s
Prostate Cancer Foundation, whose “Therapeutic Consortium” was chaired by none other than Dr. Scher.
The Wall Street Journal did not mention any of this, despite the fact that concerned citizens had plastered
the information all over the internet.
Four days after the Journal article appeared– May 15, 2007 – the FDA issued new guidelines for
evaluating immunotherapy agents, such as Dendreon’s treatment. Now it was official – Pazdur’s division
would have some influence.
This seemed like the FDA was papering over a scandal. If Pazdur had violated the guidelines by
influencing the Dendreon decision, now the FDA could say that, in fact, there were new guidelines, and
Pazdur had followed them (never mind that the new guidelines were written one week after the FDA failed
to approve Dendreon’s treatment, possibly because Pazdur had violated the old guidelines).
Just a few weeks after the FDA said it would not yet approve Dendreon’s treatment, it was easier to
understand why Dr. Scher, Milken and their allies were so eager to see Dendreon fail. On May 30, 2007,
Novacea, the company whose largest investors were Milken’s ProQuest Investments and the affiliated
Domain Associates, announced that it had signed a $500 million deal to jointly develop its prostate cancer
treatment with pharmaceutical giant Schering Plough. Within 24 hours, Novacea’s stock price jumped 86
In subsequent days, the business media reported this “news” as if it were not just a business triumph, but
also a major breakthrough in the world of medicine. “On Tuesday, Novacea was just another young
biotech, with a modest market capitalization of $187 million,” enthused Forbes magazine. “That all
changed on Wednesday when the drug maker announced it had signed a deal worth over $500 million
with pharma juggernaut Schering-Plough.”
Forbes added that Novacea’s treatment “appears to significantly increase the chance of survival among
androgen-independent prostate cancer patients…”
As this $500 million figure and news of Novacea’s medical miracle made its way around the other news
organizations, and appeared everywhere on the internet, Novacea’s stock continued to soar.
Nobody in the media paused to consider whether a “$500 million deal” constitutes a medical
breakthrough (like, for example, reducing mortality by 20% in late-stage prostate cancer patients, as
Dendreon had done). The assumption was, if there is big money and the stock is soaring, the company’s
prostate cancer treatment must be good.
Furthermore, nobody in the media paused to consider that had Dendreon received approval for its
competing treatment, this “$500 million deal” would almost certainly not have happened. Nor did anybody
in the media report that the people (Milken and friends) who stymied Dendreon were the same people
who stood to profit from this purported “$500 million” deal.
At any rate, the deal was not quite what it was made out to be. Novacea did not receive $500 million. It
received $60 million up front. Meanwhile, Schering-Plough was given $12 million worth of Novacea stock
at a bargain price. By cashing out of the stock after it soared in value, Schering-Plough could significantly
reduce that upfront investment. The rest of the much-trumpeted $500 million was dependent on
Novacea’s clinical trials showing that its cancer treatment actually improved the health of patients.
Sure enough, just a few months later, in November 2007, Novacea announced that the clinical trial of its
treatment had been terminated “due to an unexplained imbalance of deaths…” In other words, Novacea’s
drug was not improving the health of patients. It was killing patients. And as soon as this news was
released, the much-heralded $500 million Schering-Plough deal was cancelled.
Either shortly before or soon after the trials were terminated due to an “imbalance of deaths,” Milken’s
ProQuest Investments and Domain Associates sold their stock in Novacea. Given the enormous boost
the stock price had received after the “$500 million” news, it appears that ProQuest and Domain (i.e.
Michael Milken and friends) sold their stock at a significant profit.
So the questions remain: Did Dr. Scher (who worked for ProQuest and lead Novacea’s clinical trials)
really believe that Novacea’s treatment was superior, as he claimed during his successful campaign to
get the FDA to reject Dendreon’s drug? Did Michael Milken’s Prostate Cancer Foundation, which was an
extension of ProQuest and snubbed its nose at Dendreon’s treatment, really believe that there were
better treatments in the pipeline?
Did ProQuest and its affiliate Domain, which founded Novacea, ever care about producing a marketable
drug? Or was Novacea a scam? A scam that was built on real science (though Dr. Scher was less than
upfront about the results of his clinical trials, his efforts to develop Novacea’s treatment were no doubt
sincere). A scam that was more sophisticated than those perpetrated by the bucket shops of yore, and
whose every component may have been technically legal.
But nonetheless a scam – an old-fashioned pump and dump scam.