Bristol's Not Buying ImClone

The drug giant says in an SEC filing that it has no plan to acquire the Erbitux maker.
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Shares of

ImClone Systems

(IMCL)

declined Thursday, one day after

Bristol-Myers Squibb

(BMY) - Get Report

said it has "no current plans or proposals" to buy the biotechnology company.

ImClone

recently hired an investment bank to explore strategic alternatives, which could mean a sale, merger or alliance. Bristol-Myers Squibb had appeared to many on Wall Street as

a likely candidate to make a deal with ImClone.

That's because Bristol-Myers Squibb has invested heavily in ImClone's development of the colon cancer drug Erbitux, holds the North American marketing rights to the drug, provides a 39% royalty on Erbitux sales to ImClone and owns 17.1% of the company's stock.

Although Bristol-Myers Squibb is the biggest holder of ImClone shares, it said in a

Securities and Exchange Commission

filing Wednesday that it wasn't interested in buying the company. ImClone's stock dropped 30 cents to $37, although it fell as low as $35.85. Shares of Bristol-Myers Squibb slipped 17 cents to $22.85.

Bristol-Myers, which has had a

complex and sometimes contentious relationship with ImClone, noted in its SEC filing that the companies' development and marketing deal runs through 2018. "Under its terms, the commercialization agreement would survive any change of control or similar strategic transaction involving ImClone," Bristol-Myers Squibb said.

Additionally, Bristol-Myers added that it would cooperate with the New York-based biotechnology company "and potential counterparties" in any strategic decision that ImClone makes. Bristol-Myers Squibb has certain obligations under its

stockholder's agreement with ImClone.

Bristol-Myers Squibb can sell its ImClone shares "subject to certain limitations on the manner of sale," the SEC filing says. But it can't buy any more ImClone shares until September 2006. Bristol-Myers says its ImClone shares represent "a financial investment," adding that it periodically evaluates its investment in ImClone shares from a financial point of view.