Updated from 3:12 p.m. EDT

ImClone ( IMCL) shares jumped about 12% Monday after the company said federal regulators had agreed to review a license for a new facility to make Eribtux, the company's drug for treating patients with advanced colorectal cancer.

ImClone and its U.S. marketing partner Bristol-Myers Squibb ( BMY ) made the announcement late Friday after markets had closed, saying they expect a decision by the Food and Drug Administration by mid-June.

Erbitux won FDA approval on Feb. 12. Until the new plant, known as BB36, is licensed by the FDA, the companies say they "continue to believe that they can meet full commercial demand" for Erbitux, which is now made by a contract manufacturer, Lonza Biologics.

Also, Banc of America Securities initiated coverage of the company with a buy rating and gave its share price a 12-month target of $91.

The BB36 plant has been approved by the FDA since June 2002 to make investigational quantities of the drug. In addition, Erbitux made at BB36 has been approved for commercial sale in Switzerland.

ImClone shares gained $7.03, or 11.9%, to $66.30, their highest close since late 2001, after touching $67.50 earlier in the day.

That also happens to be the beginning of the storied past of Erbitux's FDA approval process. The company's former co-founder and CEO Samuel Waksal is now serving a prison sentence for trying to dump ImClone shares in late 2001, ahead of the announcement of an unfavorable FDA ruling on the drug. Home fashion diva Martha Stewart, a friend of Waksal and founder of Martha Stewart Living Omnimedia ( MSO), was recently convicted on obstruction of justice and other charges relating to the circumstances under which she sold shares of ImClone shares around the same time.

Billionaire financier Carl Icahn recently disclosed in an Securities and Exchange Commission filing that he had accumulated a 6.9% stake in ImClone.

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