Feuerstein's Biotech-Stock Mailbag

I'm starting to get a lot of email about the big cancer confab in June, otherwise known as the American Society of Clinical Oncology, or ASCO, annual meeting. In particular, there is considerable reader interest in ImClone Systems (IMCL Quote) because of the highly anticipated presentation of data from the phase III Erbitux lung cancer study known as FLEX.

In order to get to most of your questions, I've taken a different tack with this week's Mailbag, assembling my own Q&A on ImClone below. It's like a conversation with myself, but it encompasses all the major questions posted to me recently by readers. If there's something I don't cover, please let me know.

What's so important about the FLEX study data?

This is ImClone's best shot to date at joining the elite biotech oncology club. That means sharing the spotlight with companies like Genentech (DNA Quote) and Celgene (CELG Quote). This is not to say that ImClone isn't already a player. Erbitux is a great drug and given some more time, it could probably hit a $900 million to $1 billion run rate (in the U.S.) as a treatment for colon and head-and-neck cancer alone.

But FLEX puts Erbitux squarely into the lung cancer treatment mix. That's big time. Moreover, FLEX is about positioning Erbitux as a first-line lung cancer drug. That means it will be the No. 1 drug (sharing that honor with Genentech's Avastin) that doctors turn to when choosing how to treat newly diagnosed lung cancer patients. There is big money to be made in oncology when you're the first-line drug.

How much money?

Well, that depends on to what extent Erbitux boosts survival in these lung cancer patients.

So, what's your guess?

The chatter around Wall Street's biotech water cooler has Erbitux (given in tandem with the chemo drugs cisplatin and vinorelbine) coming in with a four- to five-week survival advantage over the cisplatin-vinorelbine combination alone. That's what I've heard consistently for months. Given that the FLEX data was granted a primo plenary presentation slot at the ASCO meeting, I figure survival has to be at least four weeks, hopefully more.

Four or five weeks? Is that all?

Well, most doctors will tell you that anything more than a four-week survival boost for lung cancer patients is clinically meaningful. Getting back to your earlier question, I'd say that Erbitux could be a $500 million-plus lung cancer drug in the U.S. if the Erbitux survival number lands in that four- to five-week survival range. That's being fairly conservative, assuming modest market penetration, but that's my style.