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Food and Drug Administration

may allow

ImClone Systems


to resubmit its experimental cancer drug Erbitux for approval using salvaged data from its U.S. clinical trial, in addition to data expected from an ongoing test in Europe.

Such a plan could have FDA regulators deciding on Erbitux's approvability by next spring, one year behind schedule.

This new approach for Erbitux came out of Tuesday's highly anticipated meeting between ImClone executives, its partner

Bristol-Myers Squibb

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and FDA officials.

"We view the meeting with the FDA as very productive. The meeting provides us with direction on an approach and a process for resubmitting the Erbitux BLA, which is expected to include both U.S. and European clinical trial data," ImClone CEO Sam Waksal said in a statement released before the market opened.

It was the first time the two sides had met since the regulatory agency rejected the Erbitux approval application on Dec. 28. The shocking setback has sent ImClone shares plummeting more than 70%, triggering shareholder lawsuits and multiple investigations of the company.

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ImClone closed Tuesday at $15.52 per share. The stock was up more than 50% to $23.49 in premarket trading Wednesday.

Finally, after weeks of rancor and uncertainty, a ray of sunshine seems to have broken through the dark clouds hovering over ImClone. Regulators will apparently allow ImClone to resubmit the faulty clinical trial with additional patient information that is now being collected and after it's been reviewed by an independent team of doctors.

These bolstered results will then be included alongside data from ImClone's European partner, Merck KgaA. The German drug firm is currently conducting a test of Erbitux in colon cancer patients that is slated to run through the end of the year.

ImClone said Tuesday morning it plans on having further discussions with the FDA about this new Erbitux strategy.

The addition of Erbitux test data from Merck is essentially a middle-of-the-road option that limits the drug's delay to about a year. If the FDA forced ImClone to start from scratch with new clinical trials, Erbitux could have been delayed up to two years.

The Merck data is also important because it satisfies one of the FDA's major concerns about the way ImClone conducted its own trials. Merck's 225-patient trial tests Erbitux, by itself, against a combination of Erbitux and the chemotherapy drug irinotecan. The results should allow regulators to get an accurate gauge of Erbitux's efficacy, apart from any effects of the other drug.

This is exactly the kind of test that FDA regulators asked ImClone to conduct in the refuse-to-file letter the agency sent to the company Dec. 28, rejecting the original Erbitux application.

The trial conducted by ImClone started with colon cancer patients who had previously failed treatment with irinotecan. It then gave them a combination of Erbitux and irinotecan. This test yielded a 22.5% response rate, according to ImClone.

But FDA officials said ImClone didn't provide proof that these patients had actually failed previous treatments. Therefore, the results were meaningless because the agency could not determine which drug -- Erbitux or irinotecan -- was actually responsible for the positive results.

Hurdles Remain

ImClone, of course, still has some obstacles to overcome. The results of the bolstered U.S. clinical trial and Merck's European test of Erbitux must prove positive enough to pass FDA muster. ImClone is still facing multiple shareholder lawsuits and investigations by Congress, the Department of Justice and the Securities and Exchange Commission. And now, Erbitux is more likely to face competition from at least one similar cancer drug when it launches, instead of having the market to itself.

Ironically, ImClone was supposed to be attending a different kind of FDA meeting starting today -- an FDA advisory panel meeting for cancer drugs that was going to recommend Erbitux's approval and get the ball rolling on an FDA approval by April or May. Or at least, that's what ImClone executives had promised and investors expected.

Instead, beaten-down ImClone bulls are celebrating a smaller victory -- the fact that Erbitux's approval application might finally get accepted for review, and that the drug will only be a year late coming to market.

By almost all accounts, Erbitux is a promising cancer drug, but for reasons still unexplained, ImClone executives blew it. Instead of nearing the FDA finish line, the company and its drug are just getting to the starting gate.