Erbitux Delay Depresses ImClone

ImClone and Bristol-Myers need more time to formulate a trial for their head and neck cancer treatment.
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Updated from April 12

ImClone Systems

(IMCL)

shares slumped early Wednesday after the biotech and its partner

Bristol-Myers Squibb

(BMY) - Get Report

said they will delay for perhaps six months seeking government approval for Erbitux as a treatment for cancer of the head and neck.

The companies originally had planned to submit an application to the Food and Drug Administration during the second quarter. But late Tuesday, they said they now plan to seek approval by year-end.

Erbitux was approved 14 months ago by the FDA for treating colorectal cancer that has spread to other parts of the body and that doesn't respond to standard treatments. Erbitux can be used with chemotherapy or as a single treatment.

The announcement, which came after markets had closed yesterday, drove down ImClone's stock in premarket trading Wednesday. Recently, it was down $3.11, or 8.8%, to $32.20.

Shares of Bristol-Myers Squibb gained 23 cents, or 0.9%, to $25.32 in regular trading.

Both companies have been seeking multiple uses for Erbitux, which is in late-stage clinical testing for pancreatic cancer, non-small cell lung cancer and earlier stage colorectal cancer.

The companies said they are delaying the application "to strengthen the process" by which the primary goal of a clinical trial is evaluated by a team of independent reviewers. The primary goal is to see how well the disease is controlled in the head and neck region. The secondary goal -- expanded survival -- is not subject to this review process. Another pivotal study of the drug is unaffected by the review process, the companies said.