ImClone to Settle Two Lawsuits on Erbitux

ImClone Systems Inc. said it agreed in principle to settle two lawsuits related to the failed regulatory application for its cancer drug Erbitux.

The settlements will cause the New York-based biotechnology company to take a charge of $55.4 million in the fourth quarter, the company said.

ImClone -- at the center of a scandal that sent company founder Sam Waksal and his friend Martha Stewart to jail -- said it would pay $75 million to settle a class-action lawsuit that alleges the company violated securities laws by misleading investors on the approval status of Erbitux. ImClone also settled shareholder-derivative litigation and will get a $8.5-million payment from its insurance carriers to pay the class-action settlement.

Shares of ImClone slipped 55 cents to $36.98 on Nasdaq.