CEO’s stock buy ‘pure coincidence’

Biotechnology company ImClone Systems Inc. said Wednesday that it was “pure coincidence” that its new chief executive bought $500,000 of company stock just days before the value of the shares soared on positive news about ImClone’s cancer drug Erbitux.

John Johnson took the helm of ImClone on Aug. 27 after signing a four-year employment agreement with the New York-based company.

Johnson on Sept. 7 paid $500,000 for 13,609 shares of ImClone at an average price of $36.74 each.

The stock soared $6.97 a share, or 18.4%, to $44.90 on Tuesday, when ImClone reported that Erbitux prolonged the lives of lung cancer patients in a trial sponsored by its European partner Merck KGaA. The stock was unchanged on Wednesday.

“This is 100% pure coincidence,” ImClone general counsel Daniel O’Connor said, referring to arrival of the lung cancer data so soon after Johnson’s purchase of his ImClone stake.

O’Connor said ImClone stipulated when it hired Johnson that he must purchase $500,000 of stock within 90 days of the date of his employment pact. The agreement also required Johnson to hold the shares for at least one year after the end of his contract, O’Connor said.