ImClone stock dives, from the effect of congressional inquiry

By Theresa Agovino The Associated Press
Saturday January 19, 2002

NEW YORK — Shares of ImClone Systems Inc. plunged nearly a third Friday after being temporarily halted as the beleaguered company disclosed it was the subject of a congressional inquiry. 

ImClone stock has been in a tailspin since late last year, when the Food and Drug Administration refused to accept the company’s application for the colorectal cancer drug Erbitux, which had been touted as a potential blockbuster. 

Earlier this month, information released by a trade publication indicated problems with the application were more serious than ImClone had led investors and analysts to believe when it disclosed the FDA rejection. 

At least four suits have been filed against ImClone alleging it trivialized the extent of the problem. 

At a meeting last week in San Francisco, ImClone chief executive Samuel Waksal said some of the data the FDA wanted did not exist. 

“It’s not an insignificant problem,” he said. “We put together a faulty package and we screwed up.” 

Now a House subcommittee is inquiring into the study, the application and the drug. ImClone said it would cooperate with the investigation. 

The inquiry is also bad news for Bristol-Myers Squibb Co, which invested $1 billion for a 20 percent stake in ImClone last year. 

Under the agreement, Bristol-Myers will co-promote Erbitux and share in its revenues if it is ever approved. 

Shares of Imclone were down $8.93, or 29.70 percent, closing at $21.15 Friday on the Nasdaq. Meanwhile, shares of Bristol-Myers were down 75 cents, or 1.45 percent, closing at $47.94 on the New York Stock Exchange.