Is Another Setback in Store for ImClone?

But all the sensational ImClone headlines are merely a distracting sideshow to the only question that really matters to the company's investors, and more importantly, cancer patients: Is Erbitux a real drug? And if so, when will it be approved? Supporters were hoping that the European data being compiled by Merck would be the thing to erase the painful sting of the past year.

Merck is a German drugmaker, unaffiliated with the U.S. pharmaceutical firm of the same name, which is in charge of developing Erbitux for the European market. As part of these efforts, Merck has completed a 330-patient study that tests Erbitux, by itself, against a combination of Erbitux and irinotecan.

Last February, with ImClone seeking ways to salvage its plan for Erbitux, the company convinced the FDA to consider results from the Merck study as a way to get the drug approved here. The design of this trial is especially important because it satisfies one of the FDA's major concerns with the way ImClone conducted its own trials. A successful outcome would increase the odds of Erbitux winning approval in the U.S. and Europe.

But if the Merck trial fails, as sources tell TheStreet, ImClone will be forced to fall back on alternative plans to get Erbitux approved. The company, along with partner Bristol-Myers, already has started enrollment in a new clinical trial that will test Erbitux as a stand-alone treatment for 250 patients with advanced colon cancer.

At the annual meeting of the American Society of Clinical Oncology last May, ImClone reported results from a small, 57-patient study using Erbitux as monotherapy. In that study, tumors in six of 57 patients, or 10.5%, shrank by at least half, the company said. The new Erbitux monotherapy study, which began in August, will attempt to confirm, or improve upon, these results.