Imclone

(IMCL)

is looking like the belle of the

American Society of Clinical Oncology

cancer research ball.

Shares of the small New York biotechnology firm rose 4% and were among the

Nasdaq's

most active at Monday's opening bell as investors reacted with glee to the company's strong showing at ASCO's annual meeting, which began Saturday in San Francisco.

But that enthusiasm could be somewhat tempered because the company appears to be facing a longer-than-expected approval process for its groundbreaking cancer drug.

Imclone presented results from three studies of its novel new cancer drug, IMC-C225. The drug is one of a new class of cancer fighters making a big splash at ASCO; these drugs appear to shrink or halt the growth of tumors by blocking a chemical signal that turn healthy cells into cancerous ones.

In the most widely anticipated of Imclone's studies, IMC-C225 caused colon cancer tumors to shrink by at least half in 22.5% of 120 terminally ill patients who were also given traditional chemotherapy. It's important to understand that IMC-C225 is not a cure; the drug only extended the patient's life for a short time. But to cancer researchers, even this is a real breakthrough, and based on these results, Imclone executives said they intend to submit the drug for approval to the

Food and Drug Administration

in June.

Shares in Imclone were up $1.52, or 4%, to $39.94 in early Monday trading.

TheStreet.com

first

wrote about Imclone and its new drug in April after learning that the company had been given a high-profile slot in which to present its IMC-C225 studies at this year's ASCO meeting. There was a lot of hype about Imclone's new drug going into the meeting, and the company didn't disappoint. The 22.5% response rate among colon cancer patients topped expectations by a good margin, and seemed to ensure FDA approval.

But just when IMC-C225 is expected to get that green light seems to be a bit fuzzier today than when ASCO began. Most biotech observers expected Imclone to push the paperwork for IMC-C225 to the FDA during the second quarter, leading to drug sales early next year because drug regulators have already committed to examining the drug within six months.

But during a meeting with analysts Sunday, Imclone COO Harlan Waksal said the company would file a "rolling BLA," or biologic license application, with the FDA beginning in June. A rolling BLA means Imclone will submit its applications in sections, as they are completed. The FDA can review each section individually, but is not required to do so. If the agency chooses not to review the application until it is completed, IMC-C225's approval could be pushed further into 2002, cutting into the company's short-term revenue projections.

Adding to the uncertainty is the fact that the FDA has been rather

slow to approve new drugs recently, a subject previously examined by

TheStreet.com

. But last week, the agency made a big deal about approving Gleevec, a new cancer drug from

Novartis

(NVS) - Get Report

, in record time, so Imclone may still meet Wall Street's expectations for IMC-C225's speedy approval.

Imclone executives were not available to comment.

In an April research report, Robert Toth, biotech analyst at

Prudential Vector

, forecast $130 million in sales for IMC-C225 in 2002, if the drug was approved as expected. Sales of the drug could reach as high as $581 million by 2005, he forecast. Toth rates Imclone accumulate, and his firm has done underwriting for the company.

Imclone is seeking FDA approval for IMC-C225 to treat colon cancer patients who have already failed to respond to standard chemotherapy. Colon cancer is the second-leading cause of cancer death in the U.S. But the drug's use, and sales, could rise fast as the company investigates its effectiveness in treating other types of cancers, and use in other treatments.

Over the weekend, Imclone released promising results in two other studies that showed IMC-C225 to be effective for patients suffering from cancers of the pancreas and head and neck. The company also said it will start a new study this summer to see how well IMC-C225 works on patients suffering from earlier stages of colon cancer.

IMC-C225 is a new class of monoclonal antibody that lets doctors fight cancer in a new way. Simply put, the drug works by blocking the receptor attached to epidermal growth factor, a common cell protein that somehow goes haywire in cancer cells. By targeting cancer cells that "express" for epidermal growth factor, IMC-C225 seems to stop or shrink tumor growth without the nasty, or potentially fatal, side effects of chemotherapy drugs.

Genentech's

(DNA)

breakthrough breast cancer drug, Herceptin, works by acting against a close cousin to epidermal growth factor. The South San Francisco biotech giant also presented studies this weekend at ASCO for a new drug, Tarceva, that works the same way as IMC-C225. Tarceva is being tested on patients terminally ill from non-small cell lung cancer. Genentech is working on the new drug in collaboration with

OSI Pharmaceuticals

(OSIP)

and

Roche

, but its development is about one year behind Imclone's drug.

AstraZeneca

(AZN) - Get Report

is developing its own so-called "EGFR blocker" drug called Iressa.

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