Biotech King Dethroned: Blech Gets 4 Year Sentence
On 18 September, the man formerly hailed as biotechnology’s king, will start a four-year prison term. David Blech, 57, will serve out his federal sentence in Fort Dix, NJ, (pictured here) after having pled guilty to securities fraud. Blech will appeal the sentence but he will have to do so from prison.
Blech was also ordered to forfeit $1.34 million and he agreed to settle with the Securities and Exchange Commission for $1.03 million last month. Blech was added to Forbes’ list of the 400 wealthiest Americans in the early 1990’s when he was worth approximately $300 million.
The music major was working as a stockbroker when he saw the meteoric rise of biotechnology pioneer company Genentech, which doubled in share prices the first day it went public. Figuring he could do the same, Blech and his brother started Genetic Systems, and industry babies Celgene, Alexion Pharmeceuticals, Ariad Pharmaceuticals and Icos (developer of the impotence pill Cialis) followed along with other ventures.
“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 said in a New York Times interview published Thursday.
Blech blames the reckless behavior that resulted in this latest sentence on bipolar disorder: “I didn’t know how to say no to a deal.” In 1998, Blech also pled guilty to securities fraud but was able to avoid jail time.
However, Blech’s critics say he was an aggressive, but lucky, stock promoter who is getting credit for companies whose success came long after his association ended. Supporters say instead that Blech saved multiple companies.
Blech and brother, Isaac Blech, formed a number of companies, many which were made public quickly to turn a profit, and some which failed. The biotech train jumped the track however in 1990 when the brothers disagreed over expansion and they have reportedly not talked since. What followed for David Blech was financial collapse, a stay in a psychiatric ward, divorce, mass sell-offs of funds to pay creditors and five-years probation. When Blech tried to recover, he resorted to his old methods, and the result is his current conviction.[Image via Bureau of Prisons.]