Updated from 12:55 p.m. EDT

ImClone Systems' ( IMCL) shares surged to a new 52-week high Tuesday then retreated after the biotech company reported what will be its largest quarterly profit of 2004.

New York-based ImClone had net income of $62.7 million, or 76 cents a share, vs. a loss of $34.8 million, or 47 cents a share, a year ago. The performance easily surpassed analysts' estimates for a profit of $19 million, or 17 cents a share, on revenue of $62.2 million.

Revenue rose more than 500% to $109.6 million. License fees and milestone payments, namely for Erbitux, totaled $67.5 million. Royalty revenue included $6.8 million from Bristol-Myers Squibb ( BMY), which has an agreement to help sell Erbitux.

In a statement, the company said the Food and Drug Administration's approval of Erbitux on Feb. 12 began "what we believe will be a period of continued profitability." The company added that it was pleased with the drug's sales so far.

After setting a new 52-week high of $83.35 earlier in the session, ImClone shares were recently down $3.32 cents, or 4.5%, to $69.77. The day before Erbitux was approved, they closed at $43.

While executives would not give specific revenue or profit guidance on a conference call, they indicated that the company would remain profitable through the remainder of the year.

"We expect to remain a profitable entity as the year progresses, although in absolute terms, we do not expect to achieve the levels of profitability reported in the first quarter," said interim CFO Michael Howerton.

Howerton said license fees and milestone revenues will continue to be recognized, albeit at lower levels than in the first quarter. Manufacturing revenues will continue to be recorded and royalty revenues will grow, he said, adding that the firm will continue to be reimbursed for certain clinical and regulatory expenses by its partners.

Howerton said research and development expenses of $20.2 million in the first quarter "can serve as a valid indicator of a quarterly expense figure for the balance of the year." Clinical and regulatory expenses of $7.1 million in the first quarter are expected to increase "significantly as the year progresses" and could more than double by the third quarter. Meanwhile, marketing, general and administrative expenses are expected to increase going forward.

Erbitux's FDA approval process has a storied past. The company's former co-founder and CEO Samuel Waksal is now serving a prison sentence for trying to dump ImClone shares in December 2001, ahead of the announcement of an unfavorable FDA ruling on the drug. Shares had traded in the $60 to 70 dollar range in the month ahead of that. 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 around the same time.

Billionaire financier Carl Icahn disclosed in a March Securities and Exchange Commission filing that he had accumulated a 6.9% stake in ImClone and was quoted as saying Wall Street had underestimated the "great potential" of Erbitux.

ImClone shares surged last Monday after the company said the FDA had agreed to review a license for its new plant for producing Erbitux, which is now made by a contract manufacturer, with a decision expected by mid-June.

The company also recently said it expects final European regulatory approval of the drug in mid-2004. It's already been approved for use in Switzerland.

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