ImClone Shares Soar as FDA Accelerates Review

Shares of ImClone Systems soared Monday after it said the U.S. Food and Drug Administration would evaluate the company’s new cancer drug based on only two of the three testing stages usually required by the FDA.

The stock (IMCL) leaped $13.44 to $83.94 on what was otherwise a dull day for the recently hot biotech sector.

The ImClone drug, C225, is poised to become the first approved member of a new class of drugs targeting a receptor on cells that helps fuel cancer growth. A quick path to market could give the drug a pronounced head start over what is likely to be the next approved drug in the class, AstraZeneca’s experimental cancer drug Iressa, said Robert Toth, a Prudential Vector Healthcare analyst.

“It substantially diminishes the timeline risk that has been the biggest worry--not whether C225 is a drug, but when it will be a drug,” said Toth, who has had a “strong buy” rating on ImClone. C225 could have annual sales of $1 billion, Toth said.

It’s not uncommon for the FDA to review applications based on Phase II test data, if the drugs are designed to treat diseases for which no adequate therapy exists.

New York-based ImClone is developing C225 to treat a range of cancers--including lung and head-and-neck cancer--and plans to file first for approval to treat “refractory” colorectal cancers that haven’t responded to other treatments.

“We feel very comfortable now with our strategy for a drug that we feel has a very broad capacity [for treating] solid tumors,” said Samuel Waksal, president and chief executive at ImClone.

The company’s FDA application, and the drug’s chance for approval, hinge on whether data from the handful of C225 studies being run meet expectations.