Washington Editor

Analysts say the FDA’s failure to accept ImClone Systems Inc.’s rolling biologics license application for Erbitux in irinotecan-refractory colorectal cancer is expected to delay market launch by about six months.

The rejection also holds up ImClone’s $300 milestone payment for acceptance of the BLA from partner Bristol-Myers Squibb Co., of Princeton, N.J. Since analysts don’t believe Erbitux will enter the market for another year (early 2003, according to some), potential worldwide sales for 2003 in this indication have been reduced from $324 million to $200 million, according to research notes released by Michael Wood, an analyst with Lehman Brothers in New York.

ImClone’s stock has steadily dropped since the New York-based company released the news Friday after the market closed. ImClone’s stock (NASDAQ:IMCL) fell about 16 percent Monday, or $8.79, to close at $46.46. Wednesday it closed at $43.33, down $3.13, or 6.7 percent.

ImClone’s management sees the setback as merely that — a setback.

In a conference call Monday, Samuel Waksal, ImClone’s president and CEO, assured the 800 or so listeners that there’s nothing wrong with Erbitux as a cancer drug. Instead, the problem is in the rolling BLA, he said. (A rolling application allows a company to submit its BLA in sections, if certain FDA criteria are met.)

Waksal reported that the FDA said the BLA contains insufficient data on response rates and eligibility requirements for patients entering the trial.

Waksal later told BioWorld Today that the delay does not mean the company will have to conduct subsequent trials.

“We provided the raw data and conclusions on refractoriness and response,” Waksal said. “What is missing, according to the FDA, is the train of documentation leading from the raw data to these conclusions. The filing submitted did not contain sufficient documentation to permit the agency to analyze the clinical data. Therefore, they deemed the BLA submission incomplete. The issues were ones of documentation and annotation of the results of the independent radiological reviewers.”

To rectify the situation, ImClone intends to meet with the FDA within the next 30 days, Waksal said. “We believe we can refile very soon, but clearly, the timing is subject to the FDA’s concurrence with our plan for refiling,” he said. “We believe we can do what is necessary to correct the deficiencies in this submission during the first quarter. We want to make sure that we rebuild our credibility with Wall Street so we will be very careful about making predictions as to that timing until after we meet with the FDA.”

Erbitux (IMC-C225) is an investigational monoclonal antibody designed to target and block the epidermal growth factor receptor. In addition to being studied in irinotecan-refractory colorectal cancer, ImClone is testing the drug in combination with standard therapies in patients in various stages of colorectal cancer, pancreatic cancer, head and neck cancer and non-small-cell lung cancer. ImClone also is conducting a Phase III trial combining Erbitux with chemotherapy, and another Phase III combining Erbitux with radiotherapy as a first-line treatment for head and neck cancer.

In February 2001, the FDA granted ImClone fast-track status for Erbitux in the colorectal cancer indication. ImClone submitted its BLA Oct. 31, and under the FDA Modernization Act of 1997, the agency was required to accept or refuse the application in 60 days.

And true to form, the FDA issued its decision just before the deadline.

Matthew Geller, managing director of equity research at CIBC World Markets, characterized the timing of the decision as “typical” for the FDA.

Erbitux’s potential as a lucrative cancer drug is evident in ImClone’s ability to snag BMS as a development and promotion partner. ImClone received $200 million upon signing the deal, and is scheduled to receive the $300 million when the FDA accepts the BLA. If the FDA approves Erbitux, ImClone gets $500 million. (See BioWorld Today, Sept. 20, 2001.)

Also as part of the potential $2 billion deal, BMS was scheduled to buy 14.4 million ImClone shares at $70 each (about 20 percent of ImClone).

Waksal told BioWorld Today that the setback with Erbitux will not impact the relationship with BMS. “Our partners are committed to moving this drug forward in the approval process. They have been working with us over the weekend to put together a plan by which we can go to the agency and rectify these deficiencies that exist in this filing. The capability they have in individual talent will go a long way in making sure this [BLA] will be accepted next time. I do not think there are any issues with BMS moving forward in its commitment.”

ImClone has suffered and survived bad times before.

Founded in 1986 by Waksal and his brother, Harlan (chief operating officer), ImClone nearly went bankrupt in the mid-1990s. The company went public in 1991, raising $35 million, following a failed attempt in 1987.

ImClone obtained IMC-C225 after Eli Lilly and Co., of Indianapolis, decided against developing the drug.