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A persistent rumor that has

ImClone Systems


being taken over by

Bristol-Myers Squibb

(BMY) - Get Bristol-Myers Squibb Company Report

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helped the stock jump 24% in Thursday trading.

Shares of ImClone rose $2.57 to $13.44 Thursday, with much of the action occurring near the close.

Bristol-Myers paid $1 billion to purchase roughly 20% of ImClone last year, as part of a partnership to develop the experimental cancer drug Erbitux. The drug has run into well-publicized delays that have severely affected the value of Bristol's investment in ImClone.

But beginning last week, a trading desk rumor surfaced that Bristol-Myers was considering a plan to purchase the rest of ImClone for $19 per share. Chatter over the possible deal continues into this week. That rumor, couple with short-covering, likely contributed to today's big jump in ImClone's stock price, some traders say. Others say there are technical reasons for the stock's strength.

ImClone's board of directors must agree to any additional investment in the company by Bristol-Myers, per their partnership agreement.

Bristol-Myers closed down 2% to $24.30.