West Coast Editor

In the latest episode of an ongoing saga, ImClone Systems Inc. gained and lost in a retooling of what had been touted as a landmark potential $2 billion deal with Bristol-Myers Squibb Co. for the FDA-stalled colorectal cancer drug Erbitux (cetuximab).

The market liked it. ImClone’s stock (NASDAQ:IMCL) jumped more than 20 percent, closing Wednesday at $28.63, up $4.81. Bristol-Myers’ shares (NYSE:BMY) ended at $50.22, up $1.79.

The revised terms call for New York-based ImClone to lose $100 million in milestone payments and wait longer for a $250 million portion, but the company gets an added $200 million up front from Bristol-Myers (bringing the no-strings cash total to $400 million), and managed to keep its 39-percent royalty rate the same.

Specifically, instead of the $300 million milestone payment originally agreed upon (to be paid when the FDA accepted the Erbitux biologics license application), Bristol-Myers, of New York, will pay ImClone $140 million in cash for signing the revised agreement, and $60 million in cash a year later.

Instead of the originally agreed upon $500 million milestone payment upon FDA approval, Bristol-Myers will pay $250 million when the first indication is approved, and $250 million for a second approval.

The deal, which runs through 2018, was revised to reflect the potential market launch, modified after the February 26 meeting with the FDA. Analysts have said they expect a filing in 2003 and launch in 2004. (See BioWorld Today, Feb. 28, 2002.)

At the meeting, ImClone and Bristol-Myers discussed with the FDA means of providing the agency with data from an ongoing European trial, plus reanalyzed data from U.S. Phase II trials, thus avoiding new trials while adding weight to the rolling biologics license application for Erbitux, which the FDA refused in late December.

In a press release, both firms expressed satisfaction with the new arrangement showing an accord that hasn’t always been evident in the back-and-forth comments made by way of the news wires.

Neither company returned phone calls Wednesday. Andrew Merrill, on behalf of ImClone, said the company was limiting itself to the details disclosed in press releases.

Although it leaves in suspense the major question final approvability of Erbitux, about which even skeptical analysts have been optimistic the reorganized deal seems to put the development back on a track it hasn’t seen since their first agreement was signed last fall. (See BioWorld Today, Sept. 20, 2001.)

ImClone’s stock went into a tailspin after the refusal-to-file letter from the FDA, and things worsened after that. Shareholder lawsuits flew against ImClone, a House committee started investigating, and Bristol-Myers began clamoring for changes in the deal, which ImClone first resisted. (See BioWorld Today, Jan. 3, 2002; Jan. 22, 2002; Feb. 7, 2002; and Feb. 13, 2002.)