Washington Editor

Shares in ImClone Systems Inc. took a 6.4 percent dip on word that Erbitux (cetuximab) missed the primary endpoint in a Phase III pancreatic cancer study, a backslide that follows a month of significant gains.

More specifically, the stock (NASDAQ:IMCL) traded down $2.71 to $39.64 on heavy volume, perhaps representing a return to normalcy of sorts. Up until just a few weeks ago the shares had been at or below $30 before rocketing above $40. That recent run-up has coincided with poor colorectal cancer data on a newly approved competing therapy, Vectibix (panitumumab, Amgen Inc.), positioning Erbitux in a better light in multiple tumor types and renewing takeover expectations for ImClone.

In short, investors were quick to revise their valuations of the New York company and its drug after that Vectibix study, known as the PACCE trial. (See BioWorld Today, March 26, 2007.)

"The stock had a good run," said Mike King, an analyst with Rodman & Renshaw LLC in New York, adding that its recent gains might not have been as robust had Vectibix performed better. "This was a disappointment, but I don't think it was a big hit."

That's because his firm hadn't built pancreatic cancer revenue into Erbitux sales projections, and neither did other banks. According to Gene Mack of HSBC Global Research in New York, "There wasn't much baked in" to models for this setting. In addition, he said ImClone remains a buyout candidate.

Its monoclonal antibody already is approved to treat colorectal and head and neck cancers. Last year, worldwide sales of Erbitux totaled a little less than $1.1 billion, including $652.2 million in the U.S. King expects this year's sales to climb to $1.3 billion, and Mack expects half a million more. A year later, he's modeling $1.8 billion.

Erbitux, which inhibits the epidermal growth factor receptor, failed to improve overall survival to a statistically significant degree in locally advanced, unresectable or metastatic pancreatic cancer. In most cases, pancreatic cancer tumors overexpress EGFR. ImClone did not provide more precise details or numbers, but specific data are expected at an upcoming meeting, likely at June's gathering of the American Society of Clinical Oncology.

The open-label, randomized trial, conducted by the Southwest Oncology Group, compared Erbitux and the chemotherapy gemcitabine (Gemzar, Eli Lilly & Co.) to gemcitabine alone in the first-line treatment setting. It recruited more than 700 patients from the U.S. and Canada. ImClone, along with the cancer research cooperative and its commercial partner Bristol-Myers Squibb Co., also of New York, will engage in joint efforts to fully interpret those results.

In the meantime, the partners aren't giving up on Erbitux in pancreatic cancer, despite the setback. Going forward, they plan to pursue additional tests, led by ongoing recruitment in a pilot study of Erbitux and Avastin (bevacizumab, Genentech Inc.) with or without gemcitabine.

ImClone and Bristol-Myers Squibb have been positioning their targeted cancer therapy for use in a disease that's diagnosed in about 34,000 Americans every year and kills almost as many in the same time frame. Its five-year survival rate is about 5 percent.

That market opportunity has drawn the interest of numerous drug companies developing targeted oncology agents, but there has been only one recent success: Tarceva (erlotinib, Genentech and OSI Pharmaceuticals Inc.). Its label indicates that 24 percent of patients who received the small molecule achieved one-year survival compared to 17 percent on gemcitabine, as well as about 12 days of progression-free survival.

"The low hurdle set by Tarceva means that any positive data in pancreatic cancer would have been huge," Mack said of Erbitux. "I think people expected that if they got any positive data, it would have been better than Tarceva."

But success in that indication has been elusive, to say the least. In addition to this Erbitux failure, Avastin also has missed in studies to establish efficacy in pancreatic cancer. Still, because there have been so few advances, "it's green pasture" for the next drug to succeed in those patients, Mack said.

ImClone and Bristol-Myers Squibb also are testing Erbitux in lung cancer, with a Phase III study under way. Calls to the companies were not returned.

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