Dolan

Bristol-Myers Squibb wants substantial changes to its record-setting $2 billion agreement with ImClone Systems to codevelop and comarket ImClone's first product, the anticancer drug Erbitux.

Bristol-Myers wants control of the regulatory approval process, expanded intellectual property rights, the temporary ouster of ImClone management, and altered financial terms. ImClone says it is studying the proposal.

"If these conditions are accepted, Bristol-Myers Squibb will take the lead in the FDA approval process and other clinical and regulatory matters," says Peter R. Dolan, chairman and CEO of Bristol-Myers. "We believe Erbitux has great potential, and we want to move the process forward as quickly as possible." Otherwise, the company reportedly is willing to walk.

In September 2001, Bristol-Myers paid $1 billion up front for a 20% equity stake in ImClone, followed by another $200 million in milestone payments so far. But in late December, FDA refused even to look at ImClone's Erbitux application.

ImClone's president and CEO, Samuel D. Waksal, has admitted to serious mistakes in handling clinical trial data, making any near-term approval unlikely. The company also faces shareholder lawsuits and probes by a congressional committee, the Securities & Exchange Commission, and the Justice Department on whether it misled investors.

Bristol-Myers wants Waksal and his brother Harlan, who is chief operating officer, to step down until Erbitux gets approved.

ImClone's stock now trades for less than $15 per share after hitting a high near $70 in early December. Bristol-Myers took a fourth-quarter write-off of $735 million related to the deal.

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