ImClone Soars on Erbitux Study Results

Updated from 7:34 a.m. EDT

The cancer drug Erbitux has prolonged the survival of lung-cancer patients, according to results of a large phase III study announced today by German drug maker Merck KGaA, which sells the drug in Europe.

The news sent shares of ImClone Systems(IMCL) surging Tuesday morning. ImClone, of course, developed Erbitux and markets the drug in the U.S. with partner Bristol-Myers Squibb(BMY).

Erbitux is used primarily to treat colon cancer and head-and-neck cancer. Until today, the large and lucrative lung cancer treatment market has been out of the drug's reach. If Erbitux becomes a player in the lung cancer market, it could pinch sales of Genentech's(DNA) Avastin, which is currently the go-to targeted cancer drug for first-line lung cancer treatment.

ImClone shares recently were up $8.27, or 22%, to $46.20. Genentech shares were off $1.40, or 1.8%, at $77.75.

German Merck's so-called "Flex" study of Erbitux plus chemotherapy increased overall survival vs. chemotherapy alone in patients with advanced non-small-cell lung cancer. These patients had not previously received any chemotherapy treatment. No more details from the study were provided.

These positive results are somewhat surprising because a similar Erbitux first-line lung cancer study run by Bristol-Myers Squibb came up negative in July. That study, known as BMS CA225, combined Erbitux with a different chemotherapy regimen than the one used in this Flex study.