ImClone Fights Delisting, Awaits Data
Monday May 12, 5:07 pm ET
By Toni Clarke
NEW YORK (Reuters) - ImClone Systems Inc. is scheduled to meet with Nasdaq Stock Market (News - Websites) officials on Wednesday to fight possible delisting, which would make it harder for investors to trade its shares as they await key data on the latest test of its cancer drug, Erbitux.
Nasdaq may delist ImClone because of delays in filing its annual report. The New York biotechnology company said in April it would restate its results going back to 2001 to account for its failure to withhold taxes on stock options exercised by several officers, including two chief executives and a chairman who have resigned. The threatened delisting follows nearly two years of scandal surrounding ImClone that led to the arrest of former chief executive Samuel Waksal for insider trading and fraud. The charges came after U.S. regulators refused to review the drug, citing flaws in the clinical trial. The decision sent the stock plummeting to less than $10 from a high of $75.45.
If the company's stock, currently trading at $20.04, was to be delisted this week, it would move to a market such as the Pink Sheets or Nasdaq's Over-the-Counter Bulletin Board, which have less stringent listing rules but are less actively traded.
"It would make it much more difficult to trade the stock at a time investors would want to trade it," said Jim McCamant, general partner at the American Health Care Fund, which owns ImClone stock. "The chances that they will be delisted this week are very slim. There will be some kind of extension."
ImClone's European partner, Merck KGaA will present the results of its own trials of Erbitux on June 1 at the annual meeting of the American Society of Clinical Oncology in Chicago. The results are crucial for ImClone, which could use them to resubmit its own application with the U.S. Food and Drug Administration (News - Websites).
ImClone's original trial was designed to show that Erbitux combined with chemotherapy was more effective than chemotherapy alone. It tested Erbitux and standard chemotherapy in patients who had not responded to chemotherapy.
The results showed that in 23 percent of patients, tumors shrank by more than 50 percent. However, since the company did not conduct a large enough trial of Erbitux alone, it was unclear to regulators how much of the response was due to Erbitux.
Germany's Merck has tested Erbitux in 330 people, some of whom received Erbitux in combination with chemotherapy and some of whom received Erbitux alone. The companies are hoping the data will show a significant improvement in those treated with the combination therapy.
If there is no important benefit to those treated with both drugs, there would be little reason for doctors to prescribe Erbitux.
Analysts say that if the combination data is not strong, but Erbitux alone shows positive results, the company could complete its own trials of the drug as a monotherapy and submit a marketing application for Erbitux as a stand-alone treatment. |
