IMCL Showing Some Strength Today

At precisely 11:32:55 this morning, IMCL broke through its multi-year high.  As I type this it is trading at 43.91.  As Martha might say, “this is a good thing.”

Back Into IMCL

Investing note:  I reopened my long position in ImClone Systems (NASDAQ: IMCL) today @ 40.50.  The negative effect from the news release earlier this week wasn't nearly as strong as I thought it was going to be.  My expectation is that there is going to be a healthy run in this stock at some point between now and mid June, and after struggling with this one for so long I just don't want to miss it.  Naturally there is risk, but we already know IMCL will be moving into 2nd and 1st line colorectal cancer treatment, so the downside risk is somewhat mitigated.

ImClone Drops on Negative Pancreatic News

ImClone is trading between 7 and 8 percent lower this afternoon as I write this and here is why:

NEW YORK, April 10 /PRNewswire-FirstCall/ -- ImClone Systems Incorporated (Nasdaq: IMCL) and Bristol-Myers Squibb Company (NYSE: BMY) today announced that a Phase III study of ERBITUX(R) (Cetuximab) plus gemcitabine (a chemotherapy) in patients with locally advanced unresectable or metastatic pancreatic cancer did not meet its primary endpoint of improving overall survival.

Link to the whole story.

Needless to say I'm really disappointed by this news.  I was so hoping for positive results out of this trial, not only for the obvious reasons of price appreciation to a stock that I happen to own a lot of, but also for the fact that tens of thousands of people who are diagnosed with this particularly hard-to-treat form of cancer will now not receive a more powerful weapon with which to fight it.

On an investing note, I sold all my shares early this afternoon for an average price of $39.181.  I am considering either buying some Aug. $40 call options or else perhaps simply buying back the shares I sold—hopefully at a lower price.  I do still believe the data to be released at ASCO the 1st week in June will drive the price higher, but things are just a bit too dicey right now to be making any hasty moves.  I've decided to wait for the dust to clear somewhat.

The Analysts Finally Begin to See the Light of Day

Some excerpts from an article by Adam Feuerstein on ImClone for TheStreet.com, Apr. 7, 2007 (all emphasis mine):

[. . .] I have had a love-hate [emphasis on the word “hate”—Rob] relationship with ImClone for years. I've done some of my best work on the stock and, sadly, some of my worst.

[. . .]I think ImClone has a very good stretch ahead of it.[. . .]

At next week's annual meeting of the American Association of Cancer Research, ImClone will be presenting positive survival data from a study of Erbitux in third-line colon cancer as well as positive data from a study combining Erbitux and chemotherapy in second-line colon cancer.

[At the ASCO meeting in June] we'll get more good Erbitux data, including first-line colon cancer data combining Erbitux and chemotherapy (the so-called Crystal study) as well as new and positive data on Erbitux in head-and-neck cancer.

[Referencing a Southwest Oncology Group trial, there is also] Erbitux data from a big pancreatic cancer trial any day.

[. . .] I also think some of the new colon cancer data we'll get in the next few months will help Erbitux gain share in the second-line colon cancer treatment market.

I don't think Erbitux is powerful enough, necessarily, to go after Genentech's (DNA) Avastin in front-line colon cancer, [I disagree.—Rob] but ImClone still wins if doctors see Erbitux as the go-to second-line drug for their colon cancer patients.

This stuff Feuerstein is now (mostly) saying is the stuff I've been preaching for a couple years now. Note the hallowed reverence with which Mr. Feuerstein still prostrates himself before the Avastin juggernaut. I guarantee that behind closed doors Genentech management is not taking a light view of Erbitux about now.

Watch IMCL (ImClone Systems)

Keep an eye on IMCL.  43.08 is the intraday high going all the way back to Mar. 4, 2005.  If it manages to bust through with any kind of momentum and volume, the next level of serious resistance should somewhere in the 46 area.  When that one falls, next stop: 55.

ImClone (IMCL) Sharply Higher

Shares of ImClone (IMCL) traded sharply higher in extended hours trading yesterday.  Here's the reason:

“Amgen (NASDAQ:AMGN) today announced that it has discontinued Vectibix(TM) (panitumumab) treatment in the PACCE trial evaluating the addition of Vectibix to standard chemotherapy and Avastin® (bevacizumab) for the treatment of first-line metastatic colorectal cancer (mCRC).  [. . .] ‘ We had hoped that adding Vectibix to the current U.S. standard-of-care for patients newly-diagnosed with mCRC would improve outcomes without excessive added toxicity.  Unfortunately, it appears that adding Vectibix to Avastin, when used in combination with oxaliplatin- or irinotecan-based chemotherapy, increased toxicity, without improving efficacy,’ said Roger M. Perlmutter, M.D., Ph.D., executive vice president of Research and Development at Amgen.”—Business Wire

Vectibix is seen to be Erbitux's chief rival in the treatment of metastatic colorectal cancer.  Having followed closely its development, I have always been of the opinion that the level of optimism for Vectibix's success has been poorly-founded.

ImClone (IMCL) closed at $33.88 yesterday before the above news broke at around 5:30.  In after-hours trading it sold as high as $39.32 (+16.06%) and finished at $37.61 (+11.01%).  The extended-hours volume for IMCL was 592,230 or 36.5% of its 3-month average volume for the regular trading session.

Here's a snapshot of the intraday chart from yesterday, which I made at 6:28 p.m.: