National Editor

In what was described as an update of its plans for the beleaguered colorectal cancer drug Erbitux (cetuximab), ImClone Systems Inc. and Bristol-Myers Squibb Co. said they have submitted two protocols for Phase III trials to the FDA - as analysts have predicted they would - and are awaiting word from the agency.

Other than that, no new news.

The market seemed happy just the same. ImClone's stock (NASDAQ:IMCL) closed Friday at $7.80, up 63.9 cents, or 8.9 percent. Bristol-Myers' shares (NYSE:BMY) ended the day at $25.21, up 60 cents.

"Maybe they've handled things so clumsily that Wall Street is encouraged at this point," said Brian Rye, analyst with Raymond James & Associates in Nashville, Tenn.

"I'm grasping at straws, since I don't see anything newsworthy at all," he added, noting in a research report that what has been disclosed so far "does not resonate with confidence for a near-term approval for Erbitux."

The New York-based companies said in a prepared statement that one trial would evaluate Erbitux and irinotecan vs. irinotecan alone in patients with endothelial growth factor-positive second-line metastatic colorectal cancer. Another trial would test the drug with oxaliplatin/5-FU vs. the latter drug alone in the same indication.

In a joint press release, the firms also noted the ongoing European study by partner Merck KgaA, and the previously disclosed Phase II trials by ImClone. (See BioWorld Today, Oct. 8, 2002.)

Neither company has been commenting since Erbitux's serious troubles began, and the silence deepened as lawsuits flew and investigations were initiated. Last month, former ImClone CEO Sam Waksal pleaded guilty to six charges, including bank fraud, securities fraud, conspiracy to obstruct justice and perjury, and faces up to 65 years in prison. (See BioWorld Today, Oct. 16, 2002.)

ImClone emerged last week to say in a formal statement that an online news story speculating about data from the Merck trial was "premature and irresponsible."

Rye noted the study "was not designed to support U.S. approval in the first place, and I don't think it's a big risk to say the results aren't going to be as promising as people had hoped. That's sort of how you would expect it to go."

He predicted the trial would show favorable activity against cancer by Erbitux, but told BioWorld Today that "one problem I have with the study is the way it's designed. Patients are receiving Erbitux in the control arm, and the FDA doesn't really like that."

Conducting the trial that way means incremental benefit can't be measured, he said, "because nobody is receiving the chemotherapy by itself," as in the proposed U.S. Phase III studies.

"What you need in the control arm is the standard of care," Rye said. "Then in the experimental arm you can see what benefit there is."

If investors are willing to have patience, Erbitux may yet pan out, and ImClone remains a company with promise, he added.

"People within the company are handling things a little better from a PR perspective, but they couldn't help doing that," Rye said, and completing the trials shouldn't be a money challenge, as it might be for other biotechnology firms, thanks to ImClone's pharmaceutical partner.

"From a financial perspective, they can afford to do what they're doing," he said.