Imclone’s (IMCL) stock is being devastated on rumors that the firm’s clinical trials of Erbitux fell short of expectations?! An analyst said he had heard the speculation, but was unable to substantiate it. (Nevertheless he perpetrated it.) The rumors were sufficient to push shareholders to sell the stock. Imclone was unable to confirm the source of information or its validity.
All we personally know about Erbitux’ clinical trial results until now has come from the firm itself. Imclone and its partner stated that data from a phase 3 study of Erbitux and chemotherapy in first-line colon cancer patients is positive. A few months ago trial data showed that, combined with chemotherapy, Erbitux increased survival over chemotherapy alone. We also know that the drug has demonstrated efficacy in head and Neck cancer, its sales are increasing and the firm’s profits have soared, which rallied the stock.
As for the rumors (inside information?), we cannot confirm it. We can only say that negative news can negatively impact stock prices even if it is labeled as rumors. Knowing this fact, short analysts can mention the word “rumors” and get what they want from stockholders without being held liable. The word “Rumors” indirectly becomes a high-tech disclaimer.
On the confirmed side, however is news that Imclone’s drug in combination with radiation therapy has, again, been rebuffed by the medical cost-effectiveness National Institute for Health and Clinical Excellence of England. We do not really know the impact of this news on the drug sales’ growth, although we believe it should be minimal.

This entry was posted on Wednesday, May 16th, 2007 at 8:32 pm and is filed under Biotech. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.