By Barnini Chakraborty
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Shares of ImClone Systems Inc. (IMCL) shed 8% Wednesday after the company said it would delay
seeking approval for a new use of its Erbitux cancer medicine until sometime before the end of the year.
Previously, ImClone, in conjunction with Bristol-Myers Squibb Co. (BMY), had expected to submit an application in the second
quarter.
Both companies said more time is needed to strengthen a process for independent review of the primary endpoint of a study that
will be included in the companies' supplemental biologics license application.
Fulcrum Global Partners analyst Patrick Flanigan downgraded ImClone to neutral from buy, citing a lack of expected near-term
drivers for Erbitux sales growth.
"While ImClone shares are less expensive relative to other profitable biotechnology companies, we have little confidence in nearterm
Erbitux sales growth reacceleration," Flanigan said.
Erbitux, once the focus of an insider trading scandal that led to the conviction of Martha Stewart, was approved by the Food and
Drug Administration in February 2004 for use in combination with irinotecan in the treatment of certain metastatic colorectal cancer.
Significant gains by Genentech Inc.'s (DNA) Avastin in 2nd-line colorectal cancer and potential competition from Amgen Inc.
(AMGN)/Abgenix Inc.'s (ABGX) Panitumumab beginning in 2006 will likely put more pressure on ImClone, Flanigan said.
Oppenheimer & Co. analyst Cory Kasimov questioned whether the delay is an indication of greater problems at ImClone.
"Given that the significantly positive results were already independently verified prior to their release during a late-breaking, highimpact
presentation at ASCO 2004, we expect investors to be increasingly skeptical," said Kasimov, who downgraded the company
to neutral from buy.
He added that the Erbitux delay isn't the first snag the company has had.
"Company guidance last summer for a 2Q05 regulatory filing caught investors off guard and was a significant contributing factor in
ImClone's precipitous sell-off during that period," Kasimov said.
Calls to both ImClone and Bristol-Myers Squibb were not immediately returned.
Shares of ImClone recently traded at $32.15, down $3.18, or 9%, on volume of 2.2 million shares. Average daily volume is 2
million shares. Shares of Bristol-Myers shed 5 cents to $25.27.
None of the analysts own shares of the company. Fulcrum does not have an investment relationship with the company while
Oppenheimer makes a market in the securities of ImClone.
-By Barnini Chakraborty; Dow Jones Newswires; 201-938-5285; barnini.chakraborty@dowjones.com
(END) Dow Jones Newswires
April 13, 2005 09:56 ET (13:56 GMT) |
