ImClone shares plummet following response to cancer drug

By Paul Elias The Associated Press
Thursday January 10, 2002

SAN FRANCISCO — Shares of ImClone Systems Inc. fell sharply Wednesday after remarks by its chief executive failed to ease concerns about the biotechnology company’s disclosure of troubles with an experimental cancer drug. 

ImClone CEO Samuel Waksal admitted there were serious problems with the company’s application to gain Food and Drug Administration approval of cancer drug Erbitux, which was rejected Dec. 28. 

Waksal said the FDA’s chief concern is the company’s failure to document some patients in a key clinical trial. 

“It’s not an insignificant problem. The data does not exist,” Waksal told an overflowing crowd attending the 20th Annual J.P. Morgan H&Q Healthcare Conference in San Francisco. 

Waksal said the company is exploring several options, including looking at other studies it conducted in Europe to determine if data from those trials will satisfy the FDA. He conceded ImClone may have to conduct a new human trial if the other options don’t satisfy the FDA. 

ImClone shares fell $5, or 13.5 percent, to close at $31.85 Wednesday on the Nasdaq Stock Market. The company’s stock has lost more than 42 percent of its value since closing at $55.25 a share Dec. 28. 

At least a dozen federal class action suits — including seven on Wednesday — have been filed against the company since Monday, after an industry newsletter suggested the New York-based company’s problems with the FDA over attempts to gain approval of the Erbitux for treatment of colorectal cancer were more extensive than executives had acknowledged. 

On Wednesday, Waksal insisted he disclosed all the FDA’s major concerns soon after receiving the bad news. 

When the FDA rejected the Erbitux application Dec. 28, analysts at the time said Waksal told them the company’s application wasn’t completed properly. 

The Cancer Letter said the FDA was concerned with additional matters, such as the company’s failure to provide details on cancer patients enrolled in clinical trials who died during the tests. 

“We have answers for them,” Waksal said, adding that ImClone has the detailed narratives of the patients who died and will be submitting them to the FDA. 

“These issues, while important and we are going to address them with the agency, aren’t the reasons for the refusal-to-file letter,” Waksal said 

Waksal said ImClone will work closely with drug titan Bristol-Myers Squibb Co. to quickly refile an improved application. 

“We believe very strongly in this drug,” Waksal said. “We are committed to getting this very important drug on the market.” 

Bristol-Myers Squibb in October invested $1 billion for a 20 percent stake of ImClone and agreed to pay another $1 billion to share in Erbitux revenues. The drug company’s investment was seen as a big boost for fledgling ImClone, which had never submitted an FDA drug application. 

While Waksal defended his company at the conference, law firms across the country continued to file suits on behalf of shareholders. 

The New York law firm of Stull, Stull & Brody filed one of the first suits against the company Monday in federal court in Manhattan alleging ImClone executives “knew, or recklessly disregarded, that its FDA application was preliminary, incomplete and premature, and had little chance of approval, yet represented otherwise to the investing public.” 

The other suits make similar allegations. The company said it does not comment on pending litigation. 

Analysts have downgraded shares of the fledgling drug company, which was hoping to make a big impression at the biotechnology investor conference in San Francisco instead of the damage control executives have been doing since Monday. 


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