ImClone Announces Revised Erbitux Deal
Bristol-Myers Squibb Co. and ImClone Systems Inc. on Tuesday revised terms of their deal to develop the experimental cancer drug Erbitux, including a lower upfront payment from Bristol-Myers and a cap on ImClone’s potential share of future profits.
The companies also said they agreed to expand the clinical and strategic role of Bristol-Myers in the drug’s development program, a significant demand of Bristol-Myers, which had threatened to pull out of the deal.
The revised terms cut Bristol-Myers’ upfront cash payment to ImClone to $140 million at signing of the revised agreement and $60 million on the one-year anniversary of the signing, compared with the first deal’s call for a $300-million payment when the drug was accepted for review by the Food and Drug Administration.
Bristol-Myers will pay ImClone the originally agreed $500-million milestone payment, based on approval of the drug by the FDA, in two parts: $250 million when the drug is approved to treat one type of cancer and $250 million when it is approved for a second type.
ImClone’s profit share will be capped at a flat rate based on 39% of product revenue in North America, compared with the original provision for the rate to increase with certain sales targets. The agreement will continue to run through 2018.
The companies said Andrew Bodnar, senior vice president of medical and external affairs at Bristol-Myers, and a member of ImClone’s board, will oversee a joint team implementing a single clinical and regulatory plan for Erbitux.
Bristol-Myers Chief Executive Peter Dolan threatened earlier this month to walk away from the development deal.
Dolan made his demands after the FDA in December surprisingly refused to accept ImClone’s marketing application for Erbitux, citing inadequate data.
Both New York-based firms met last week with FDA officials, who signaled they might be willing to reconsider the marketing application if it was accompanied by separate clinical trial data for Erbitux. The new data would come from Germany’s Merck KG, ImClone’s European marketing partner.
Last fall, Bristol-Myers paid $1 billion for a 20% stake in ImClone and an additional $200 million on signing of the partnership deal.
Tuesday’s announcement came after markets closed. ImClone fell $2.15 to $23.82 in regular Nasdaq trading. Bristol-Myers rose 63 cents to $48.43 on the New York Stock Exchange.
