Two executives of a Lexington-based biopharmaceutical company have been indicted in federal court, accused of running a years-long scheme that prosecutors say misled investors about the prospects of a cancer drug that never received FDA approval.
A federal grand jury in the Eastern District of Kentucky on Wednesday charged W. Michael Putnam, the founder and president of CBA Pharma, and Louis A. Carmichael, also known as “Buzz,” with conspiracy to commit wire fraud and 10 counts of wire fraud. The indictment alleges the pair falsely told investors that the company’s experimental drug was on the verge of FDA approval — even after regulators had repeatedly rejected it and ultimately withdrawn the application.
According to the indictment, CBA Pharma was founded in the late 1990s and operated out of Lexington while pursuing approval for a drug known as CBT-1, which the company claimed could combat chemotherapy resistance in cancer patients. Federal prosecutors say the company failed to demonstrate through clinical trials that the drug was effective, a core requirement for approval…