WASHINGTON - A House committee has asked seven pharmaceutical companies that negotiated with ImClone Systems Inc. to partner on Erbitux to turn over documentation and research related to those discussions.
No one is saying what the House Energy and Commerce Committee is fishing for, but it could mean members are hoping one of the companies saw a red flag in Erbitux studies that caused them to decide against a strategic partnership with New York-based ImClone, and to see if ImClone withheld from Bristol-Myers Squibb Co. any diligence that was provided to other companies.
Bristol-Myers Squibb Co. ended up entering a deal worth up to $2 billion for the investigational cancer drug.
The companies involved are Pharmacia Corp., of Peapack, N.J.; Merck and Co. Inc., of Whitehouse Station, N.J.; Eli Lilly and Co., of Indianapolis; Johnson & Johnson, of New Brunswick, N.J.; Chiron Corp., of Emeryville, Calif.; Amgen Inc., of Thousand Oaks, Calif.; and Abbott Laboratories Inc., of Abbott Park, Ill. The committee is requesting internal audits, investigations or reports related to ImClone by Thursday.
Paul Fitzhenry, spokesman for Pharmacia, wouldn’t comment specifically on negotiations with ImClone, but did say, “We do look at all opportunities in the oncology area. We have received a letter and we are now in the process of gathering facts that would be responsive to the committee’s request.”
ImClone could not be reached for comment.
Chaired by Billy Tauzin (R-La.), the House committee launched an investigation into ImClone’s development of Erbitux, a colorectal cancer drug yet to receive regulatory approval, after Cancer Letter, a Washington-based newsletter, published excerpts of a “refuse-to-file” letter the FDA sent to ImClone. (See BioWorld Today, Jan. 22, 2002.)
Based on the article, the committee became concerned that ImClone executives failed to give investors and Wall Street analysts a full picture of problems related to Erbitux (also known as C225 or cetuximab).
A committee spokesman said it hasn’t been determined whether hearings into the matter will be scheduled.
However, mere interest by the House caused ImClone’s stock (NASDAQ:IMCL) to tumble 29.7 percent Jan. 21 to close at $21.15. Friday it closed at $15.70, down $1.07.
The value already had suffered a few weeks prior (down 6.7 percent to close at $43.33) when the FDA issued its letter. At that time, Sam Waksal, ImClone’s president and CEO, said the poor news likely would delay launch by about six months. He said the letter indicated “the filing did not contain sufficient documentation to permit the agency to analyze the clinical data.”
Furthermore, he said the FDA deemed the biologics license application incomplete.
But in the letter, the FDA apparently said it had identified 21 patients who died within a month of their last Erbitux treatment, while ImClone cited only three deaths. Also, last summer the FDA warned ImClone that it would have to demonstrate Campostar (irinotecan) was required to be tested with Erbitux, but ImClone never provided such data.
And one more thing happened that grabbed the committee’s attention.
Several weeks before the company received the FDA’s letter, Harlan Waksal, the chief operating officer, co-founder and brother of Sam Waksal, sold 700,000 ImClone shares valued at $71 a share ($50 million).
ImClone then lost a $300 million milestone payment from partner Bristol-Myers Squibb, of Princeton, N.J., for non-acceptance of the BLA. (See BioWorld Today, Jan. 3, 2002.)
Following the recent downward spiral, Bristol-Myers has proposed restructuring the deal with ImClone. The company offered to take regulatory and clinical matters out of ImClone’s hands, alter senior management at ImClone until the drug is approved, expand Bristol-Myers’ rights to intellectual property related to the drug and lift some restrictions on Bristol-Myers’ ability to resell ImClone’s shares. (See BioWorld Today, Feb. 7, 2002, and Feb. 13, 2002.)
ImClone refused the offer and Bristol-Myers responded that it is “considering our business and legal options with respect to our relationship with ImClone but will wait until after the FDA meeting” on Tuesday.
And now, ImClone is the subject of proposed significant share purchases by Carl Icahn, who received Federal Trade Commission clearance to purchase $500 million (or about 40 percent of the company) in ImClone stock. The FTC granted Icahn early termination of the waiting period required under Hart-Scott-Rodino Antitrust Improvements Act.
ImClone’s recently adopted shareholders rights plan is designed to stop unwanted takeover attempts by making it prohibitively expensive for an investor to continue to purchase shares after the investor owns 15 percent of the company.