ImClone Hits Profit Target - TheStreet

ImClone Hits Profit Target

Second-quarter revenue increases 11%.
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reported a drop in second-quarter profit Thursday as it increased investment to advance its drug pipeline. But the biotech company edged past revenue targets, with sales of its lead drug Erbitux meeting the lower end of consensus estimates.

Shares of the New York-based company edged down 33 cents, or 0.7%, to $45.55 in recent trading Thursday.

On a GAAP basis, ImClone earned $25.3 million, or 29 cents a share, vs. $31.9 million, or 36 cents a share, in the comparable 2007 quarter.

The company reported adjusted profit of $27.1 million, or 31 cents a share, down from $31.9 million, or 36 cents a share, in the year-ago period and in line with the analyst consensus estimate from Thomson Reuters.

Total revenue for the quarter came in at $166.5 million, edging past consensus target of $165 million.

Global sales of its lead product, cancer drug Erbitux, co-marketed with

Bristol-Myers Squibb

(BMY) - Get Report

in the U.S. and

Merck KGaA

internationally, grew to $423.3 million, up 1% from the previous sequential quarter, and up 33% year over year. North American sales totaled $195.1 million, a 4% sequential increase and within the lower bound of the $195-200 million consensus estimate.

Investors will be listening on ImClone's 11 a.m. EDT conference call for news on the affects of KRAS gene testing in colon cancer patients. Data presented at the American Society of Clinical Oncology annual meeting earlier this year established that patients with normal or non mutated KRAS genes respond well to Erbitux, while patients with mutations to this gene do not.

ImClone gets 39% of Bristol-Myers' North American Erbitux sales and 9.5% of Merck KGaA's international Erbitux sales in royalty revenue, which increased 25% year over year to $97.8 million.

The company said an 11% increase in revenue, however, was partially offset by increased investments to advance its pipeline.

Operating expenses increased 12% to $122.5 million, including a 17% increase in R&D spend to $55.9 million, a 15% increase in selling, general and administrative (SG&A) costs to $22.5 million, and a 28% increase in royalty expenses to $24.8 million.