ImClone shares fall following analyst downgrade
NEW YORK --Shares of biotechnology company ImClone Systems Inc. fell Monday after a Morgan Stanley analyst downgraded the stock to "Underweight" from "Equal Weight."
In morning trading, shares were down $1.98, or more than 4 percent, to $42.83.
Morgan Stanley analyst Steven Harr wrote that data on ImClone's drug Erbitux in lung and colorectal cancers, planned for release at the American Society of Clinical Oncology meeting in June, will not meet expectations.
"If FLEX data are as we expect, we believe lung cancer estimates will come down (lowering our U.S. peak to $350 million vs. investor view of $500 million+) and questions will increase among oncologists and investors about how much Erbitux adds for patients," Harr wrote.
He added that a lack of strong data for Erbitux at the ASCO meeting could benefit Amgen's competing cancer drug, Vectibix, potentially further lowering Erbitux estimates.
In a 10-Q regulatory filing with the Securities and Exchange Commission on Friday, ImClone said that it does "not expect the impact of potential new indications for Erbitux in the U.S. to be seen until 2009 and beyond."
ImClone also stated in the filing that due to litigation and research and development costs in the first quarter, "we have incurred significant operating losses," including a deficit of $86.4 million as of March 31, 2008. 