ImClone, BMS strike bumper deal
On September 19, Bristol-Myers Squibb (BMS; New York) announced an unprecedented $2 billion deal to co-develop and co-promote ImClones' (New York) investigational cancer drug, IMC-C225. C225 is a monoclonal antibody (mAb) targeting epidermal growth factor receptor, which is overexpressed in several cancers. BMS will pay $1 billion in cash when C225 achieves three key milestones, and will also give ImClone 60% of the profits on sales of the product. C225 got fast-track designation in the United States earlier in the year and is currently in phase 3 trials for the treatment of refractory colorectal cancer. If approved, the drug could be on the market late in 2002. Analysts say that C225 could achieve peak annual sales of $1 billion, and is also in clinical trials for the treatment of other solid tumors. BMS also purchased $1 billion in equity in ImClone, paying a 40% premium ($70) on ImClone's share price at start of business on the day of the announcement, providing BMS with a 20% share in ImClone. The deal fits nicely with BMS' sales force experienced in selling cancer drugs (e.g., Taxol, paclitaxel). ImClone's shares rose around 10% following the announcement to $54.60. LF
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