ImClone Admits It's Got Some 'Splainin' to Do

ImClone Systems(IMCL Quote) conceded Monday that it did a poor job of putting together the application for approval for its experimental cancer drug Erbitux, which U.S. regulators rejected on Friday.

Speaking on a conference call, ImClone CEO Sam Waksal said the biotech company plans to meet with the Food and Drug Administration in the next month to clarify the agency's concerns. Waksal was hopeful the company would be able to answer all the FDA questions in the first quarter of 2002, but he acknowledged that longer delays are possible.

"We must be able to address the agency's concerns," Waksal said. "If that happens, we should be able to refile [the Erbitux application] very soon. Clearly, this timing is subject to concurrence by the FDA. If we can't satisfy their additional concerns, additional clinical trials might be necessary."

The FDA rejected the application for Erbitux because ImClone did not provide enough data on the colon cancer patients in its clinical trials. In order for these patients to be included in these trials, they had to have failed previous chemotherapy treatments. But ImClone didn't provide the FDA with enough documentation to conclusively prove that its patients were indeed "refractory" to existing colon cancer treatments.

Furthermore, ImClone said the FDA believed the documentation in the approval application was not sufficient to prove that patient tumors actually shrank after being treated with Erbitux.

Simply put, ImClone said to the FDA, "Trust us." But the FDA said, "No, prove it."

Waksal insisted that Erbitux has been proven to help cancer patients, and that it met or exceeded all its clinical trial goals. The problem, he adds, is that the FDA wants the "complete train of documentation" that would support these conclusions.

But Waksal was also contrite, acknowledging that his previous boasts about the drug and the ease in which it would be approved have now come back to bite the company. Waksal said ImClone would be much more careful about making predictions.

"We want to rebuild our credibility with Wall Street," he said.

Shares of ImClone opened for Monday trading at $44.36 per share, down nearly 20% from its Friday close of $55.25.