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Father's Firm Puts Son's Spending Under Scrutiny
For BioVeris CEO, a Case of Tough Love and a Lawsuit

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Samuel J. Wohlstadter, known as an aggressive businessman, is the chairman and CEO of BioVeris. (Frank Johnston -- The Washington Post)


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BioVeris Has Close Ties to 4 Companies Run by Its CEO (The Washington Post, Jun 21, 2004)
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By Michael Barbaro and Neil Irwin
Washington Post Staff Writers
Monday, June 21, 2004; Page E01

Samuel J. Wohlstadter helped create what is now the world's largest biotechnology company, Amgen Inc. He took on Roche Holding Ltd. in a licensing dispute and forced the Swiss drugmaking giant to pay more than $1.25 billion in cash to obtain a technology owned by his Gaithersburg biotech company.

But now the 62-year-old BioVeris chairman and chief executive is facing, perhaps, an even more difficult battle. His company, which switched its name from Igen International Inc. to BioVeris Corp. after the Roche deal, filed suit last week against a venture run by his son.

Through a series of events, triggered by new accounting rules, BioVeris directors and their auditors became concerned that Wohlstadter's 34-year-old son, Jacob N. Wohlstadter, was making lavish purchases with money from a joint venture largely funded by BioVeris.

Samuel Wohlstadter is "heartsick" about his son's apparent misuse of corporate assets, said a person familiar with the situation who spoke on condition of anonymity because the company will not authorize public comment on the lawsuit. He "had no involvement and did not know" about his son's activities, that person said.

The Securities and Exchange Commission has opened an informal inquiry into BioVeris's disclosures, according to another source who is familiar with the probe but not authorized to speak publicly about it.

Sam Wohlstadter, who has a home in Charlottesville, Jacob Wohlstadter, who lives in Potomac, and board members did not respond to phone calls last week. Messages left last week at the law firm representing Jacob Wohlstadter were not returned. Samuel Wohlstadter's lawyer declined comment.

Igen was founded in 1982 by Samuel Wohlstadter, who thought the time was right for a diagnostics company using new technology, and by Richard J. Massey, who had been a faculty member in the microbiology and immunology department at Rush Medical Center in Chicago and a senior research scientist at the National Cancer Institute. Igen developed a technology that used light-emitting molecules to measure the presence of biological substances, from viruses in human blood to bacteria in undercooked meat to biowarfare agents in the desert sand.

Igen was one of several companies started by Samuel Wohlstadter, a venture capitalist and forceful entrepreneur. "He is a very aggressive businessman," said George B. Rathmann, recruited by Wohlstadter to be Amgen's chief executive. "Sam came after me with a call a week." Wohlstadter eventually convinced Rathmann in 1980 to leave his job as an Abbott Laboratories executive and run Amgen for several years.

By 1995, Wohlstadter and Massey had built Igen into a publicly traded company with a wide range of testing products. That year Igen launched a company called Meso Scale Diagnostics (MSD). The venture was intended to allow Jacob Wohlstadter, who graduated from the Massachusetts Institute of Technology at age 19 with a degree in biology, to develop an idea he had for miniaturizing Igen technology, potentially opening up new applications.

MSD was jointly owned by Igen and Meso Scale Technologies LLC, a corporate entity that, according to a 1996 SEC filing, was established and operated by Jacob Wohlstadter, who then was 25. Nadine Wohlstadter, Samuel Wohlstadter's wife, was identified that year as a member of the MSD's two-person board of managers. Jacob Wohlstadter and Massey now sit on the two-person board, which governs the joint venture.

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