West Coast Editor
ImClone System Inc.'s stock jumped more than 14 percent on confirmation from independent reviewers that Erbitux, the company's once scandal-ridden colorectal cancer drug, worked in a Phase III study as a first-line therapy against squamous-cell tumors of the head and neck.
After trading as high as $35.47, ImClone's shares (NASDAQ:IMCL) closed Wednesday at $34.27, up $5.11, or 17 percent.
The happy word from the study came one day after billionaire Carl Icahn filed for regulatory clearance to invest more than $100 million in the New York-based company, including already-acquired shares. Icahn's filing specifies an investment ceiling of $500 million, and he already owns about 5 million ImClone shares, which amounts to almost 6 percent of the company.
Brian Rye, an analyst with Janney Montgomery Scott LLC in Philadelphia, declined to comment on the timing of Icahn's move, except to say that it "was pushing the stock up a little bit in the aftermarket" - about 6 percent - Tuesday. Still fresh in the minds of many is the insider-trading caper with Erbitux at the center that put former ImClone CEO Samuel Waksal in jail, along with his friend, the home-decorating maven Martha Stewart. (See BioWorld Today, June 13, 2002.)
Of more immediate interest than Icahn is the stamp put on the Erbitux trial data by independent reviewers. Rye noted that the disclosure of efficacy in the trial, known as IMCL-9815, is nothing new, having already been made at the American Society of Clinical Oncology meeting last year. Wall Street's reaction to Wednesday's development probably reflected investors' relief as much as anything else, he said.
"A couple of months ago, [ImClone and partner Bristol-Myers Squibb Co., also of New York] said they were having to delay the application for approval because they had to have an independent review, and that put a little doubt in peoples' minds," Rye said. Now, the supplemental biologics license application apparently can move forward. (See BioWorld Today, April 14, 2005.)
The review committee found that ImClone's study with Erbitux (cetuximab) combined with radiation against head and neck cancer met its primary efficacy endpoint of locoregional control - that is, the prevention of the spread of cancer beyond the head and neck area - compared to radiation alone, with combo data showing a statistically significant improvement. Overall survival and progression-free survival, the secondary endpoints, also showed statistically significant improvement.
Enrolled were patients with advanced cancer of the oropharynx (area of the throat at the back of the mouth), larynx (voice box) or hypopharynx (cavity at the back of the mouth that opens into the esophagus) that has spread through the head and neck region.
ImClone expects to submit full primary and secondary endpoint data at an upcoming scientific meeting. Meanwhile, the firm had still more news, saying it withdrew a proposed stock incentive plan because of some shareholders' worry about dilution.
"That's obviously less positive" than the independent reviewers' findings about the trial data, Rye said, "but sort of inconsequential. You rarely see this sort of thing, and they probably should have done their homework ahead of time. But at the end of the day it doesn't really have much impact on the operations."
The aggressive Icahn has made similar forays into health care stocks. In 2004, after Pittsburgh-based Mylan Laboratories Inc. disclosed plans for a $4 billion, stock-for-stock merger with King Pharmaceuticals Inc., of Bristol, Tenn., he bought part of Mylan and tried to get the rest while working to block the deal - which Mylan and King ultimately scrapped because they couldn't reach terms on a new price. Also that year, King partnered with Palatin Technologies Inc., of Cranbury, N.J., in a potential $250 million agreement for an erectile dysfunction drug. (See BioWorld Today, Aug. 14, 2004.)
ImClone's Erbitux, after a troubled regulatory course, was approved in February 2004 by the FDA for use with irinotecan for patients with epidermal growth factor receptor-expressing metastatic disease that is refractory to irinotecan alone, as well as for use as a single agent in those patients who are intolerant to chemotherapy. The drug's sales topped out at $87.8 million last year. (See BioWorld Today, Feb. 13, 2004.)