Use access key #2 to skip to page content.
$41.72 -0.97 (-2.27%)
5/16/2008 4:00 PM

ImClone Systems, Inc. (IMCL)

CAPS Rating:
***

A biopharmaceutical company which advances oncology care by developing and commercializing a portfolio of targeted biologic treatments designed to address the medical needs of patients with a variety of cancers.

View All Commentary (IMCL)

Recs

4

Avatar NetscribeBiotech (66.48) Submitted: 3/12/07 5:11 AM : Outperform Start Price: $28.90 IMCL Score: 42.76

ImClone Systems Incorporated (ImClone) is a biopharmaceutical company that is focused on development of oncology therapeutics. With various drugs in the pipeline, addressing the medical needs of patients affected with cancer, the company’s only commercial product in the market is Erbitux, which is also undergoing clinical trials for broader use.


The company posted robust results in fiscal 2006, with revenues surging by 76% and bottom-line increasing four-fold. The given increase in topline is due to ramp up in sales of Erbitux, which has generated U.S in-market revenues of $652.2 million; the drug is being marketed by Bristol-Myers Squibb. Imclone gets 39% of the U.S in-market revenues besides reimbursement for all clinical trials for the drug.


Erbitux was approved for metastatic colorectal cancer (MCC), in February 2004 and for Head and Neck Squamous Cell Carcinoma (HNSCC) in March 2006. Revenues stream from MCC is losing momentum due to intense competition from Genentech’s Avastin and recently launched Amgen’s Vectibix. However, greatest potential opportunity for Erbitux may lie in Non-Small Cell Lung Cancer (NSCLC), with a $4.0 billion overall addressable opportunity in front-line NSCLC. The company is expected to release data from Phase III trails for NSCLC in fiscal 2007 and this event is likely to have profound impact on company’s stock price.


The company’s valuation seems reasonable taking in account its recent financial performance. The growth outlook for the company is quite clouded though and this fact appears to be already in the price. However if the company gets a positive trigger from its research and development front, it might get re-rated. To sum it up, it seems to be a story where negatives have been factored in whereas the potential positives may not be yet fully reflected in the price. Consequently, the stock has the potential to outperform in the medium-term.

Report this Post Replies: 1 | Reply

Avatar NetscribeBiotech (66.48) Submitted: 5/30/07 7:10 AM

Recs: 0 | Rec This

Cancer research is one area that has been in the limelight for so long, partly because of the large number of people being affected and partly because of the inability to come up with a credible solution. Imclone Systems, present in this sector for more than two decades has made noticeable forays in this field with their Erbitux molecule.

The company gets its revenue mainly from royalty and licensing fee of the drug that it out- license to its partners. Of this the contribution from the molecule Erbitux from the partners Bristol Meyers and Merck KgaA is substantial. The latest clinical data on the EGF receptor antibodies further enhances the position of this drug and this will be felt in the revenue flow in the future. The company also scored a major point over its rivals when AACR (American Association of Cancer Research) highlighted two trials of Imclone among the three it selected in the concerned field.

Earlier in March 2007, the failure of Amgen’s cancer drug which would have become a direct competitor to Erbitux have provided the company with a major boost and even the recent string of clinical failures it suffered to treat pancreatic cancer had not deterred the bull ride that the company is currently enjoying. Going forward the company is planning to fully leverage the platform that it has built with Erbitux by going for a green field manufacturing facility for the same. This decision is further justified by the recent FDA approval for the use of the drug in an additional dosage. Thus the scrip, sharing the optimism of the company management in all likelihood, will continue its upward momentum that it started in late December 2006.

Report this Post Reply

Featured Broker Partners