West Coast Editor
In the wake of mixed study results disclosed at a scientific meeting, the refusal of its partner to retool overseas research as a way of helping dislodge the FDA-stalled cancer drug Erbitux, and disappointing first-quarter earnings, ImClone Systems Inc. reportedly plans to run several more trials in the U.S.
The troubled New York-based firm didn't return phone calls. As Jason Zhang, analyst with Stephens Inc., of Little Rock, Ark., put it: "They're not in the mood to do things like that."
But later Wednesday, after the market closed, ImClone said Samuel Waksal, who has been at ImClone for nearly two decades and led the effort on Erbitux (cetuximab) development - but also was a focal point of controversy at the company this year - had resigned from his position as president, CEO and director. His brother, Harlan Waksal, previously executive vice president and chief operating officer, will succeed him as president and CEO.
"Serving as CEO of ImClone Systems has been an honor and a privilege for the past 18 years," Samuel Waksal said in a prepared statement. "In light of recent events and the distractions they have caused, I am withdrawing myself from the daily operation of the company in the confidence that ImClone Systems will be able to maintain its focus on the advancement of our clinical development and research programs."
"ImClone Systems is at a critical phase in the clinical and regulatory development of Erbitux," Harlan Waksal said. "I will work to see that this important biologic reaches the market as soon as possible and that our pipeline of other promising new drugs continues to move forward, with the goal of building long-term value for ImClone Systems' shareholders."
In light of the announced executive changes, ImClone's board rescheduled the company's annual meeting of shareholders, originally scheduled for today, to June 11.
Before the executive change announcement, news reports Wednesday said ImClone acknowledged intending to conduct more trials on behalf of Erbitux, as well as submit re-analyzed data from earlier studies, along with data from development partner Merck KGaA, of Darmstadt, Germany, in hopes of winning Erbitux approval.
"It's not big news," Zhang told BioWorld Today. "And I think it's a rational thing to do, because they don't have anything solid that could lead to a product approval in the near term."
The company's stock (NASDAQ:IMCL) closed Wednesday at $10.90, up 78 cents.
Over the weekend, ImClone offered study results on Erbitux that analysts found less than thrilling at the American Society of Clinical Oncology meeting in Orlando, Fla., and its first-quarter earnings numbers showed a loss of $30 million, or 41 cents per share, above the consensus estimate of 34 cents per share. (See BioWorld Today, May 17, 2002, and May 21, 2002.)
Last week Merck disclosed that it would not alter its European colorectal cancer trials to fit ImClone's needs. Zhang said in a research note that his firm's talk with a Merck official led him to believe the request from ImClone and New York-based Bristol-Myers Squibb Co. probably came about as a result of FDA discussions. The agency, Zhang said, may have suggested that a trial with sufficient patient numbers in two arms - one with Erbitux plus irinotecan and one with Erbitux alone - would give the drug a better prospect for approval. Merck, though, doesn't believe European regulators will want the same thing, and aims to finish its trials as quickly as possible.
Fariba Ghodsian, analyst with Roth Capital Partners Inc. in Los Angeles, said her "feeling is they probably said [about the new ImClone trials] something at ASCO. I don't think it should come as a real surprise." She added, "Maybe they haven't stated it officially, but it seemed pretty sure they would have to do another trial in colon cancer."
Things hardly have gone well for ImClone since the first of this year, when the FDA refused the rolling biologics license application (begun in June 2001) for Erbitux, a monoclonal antibody designed to target and block the epidermal growth factor receptor and treat irinotecan-refractory colorectal cancer. (See BioWorld Today, Jan. 3, 2002.)
Following the refusal, a federal investigation into the firm's business dealings began, and there have been allegations of insider trading, accusations of unreported deaths in trials, and public discord with its North American partner, Bristol-Myers, which had committed to a $2 billion deal. (See BioWorld Today, Jan. 3, 2002; Jan. 27, 2002; and Feb. 28, 2002.)
After a meeting with the FDA, ImClone said the agency might ultimately take the BLA without more trials if the company reanalyzed Phase II data from the U.S. and combined it with Merck's colorectal cancer data.
Now, that's apparently not to be.
"Obviously, the strategy would be to get [Erbitux] approved for colon cancer and then try to get it approved in other cancers, such as head and neck, lung and pancreatic," Ghodsian said.
Zhang said word of the trials could have leaked out in private conversations with ImClone, but he heard nothing definite surface at ASCO.
"Not publicly," he said. "The company didn't even have a meeting [at the conference] like they had last year."