Cancer Care

CHICAGO — Where does ImClone Systems(IMCL - Cramer’s Take - Stockpickr) stock price go from here?

That’s the most pressing question on many biotech investors’ minds as Monday trading looms after a very busy weekend of new Erbitux clinical data at the American Society of Clinical Oncology (ASCO) annual meeting.

Let’s dive directly into all things ImClone. Like I did with my ASCO ImClone preview, I’ve put together my own Q&A below: ImClone’s Stock Price: Up or Down?

Wow, you’re not wasting any time putting me on the spot, are you? Alright, I say ImClone shares are headed lower, but not by much, at least in the short term. [The stock closed Friday at $43.58.]

Down? Erbitux is the new player in lung cancer. That’s huge for ImClone. Why is the stock going to be down?

If I were writing an ImClone headline for the ASCO conference this year, it would be this: KRAS negative (or uncertainty) trumps FLEX positivity.

Look, the FLEX data were positive and yes, there is money to be made for Erbitux in lung cancer (as I’ll detail later) but coming out of this ASCO weekend, investors are worried more about the KRAS gene situation and how it may cut sales of Erbitux in colon cancer.

This whole FLEX business is confusing, can you explain it to me in terms I can understand?

Sure, figure it like this. Colon or lung cancer patients with a normal KRAS gene are eligible for Erbitux treatment; patients with a mutated KRAS gene won’t get Erbitux. The split in colon cancer — where it will matter most in the short term — is basically 60% normal KRAS, 40% mutated KRAS.

So, you’re telling me that for 40% of colon cancer patients Erbitux is now off limits?

Yes, and that’s going to take a bite out of ImClone’s existing colon cancer sales. CEO John Johnson acknowledged that fact last night during the company’s investor meeting. I’ve also heard that Bristol-Myers Squibb(BMY - Cramer’s Take - Stockpickr), ImClone’s marketing partner, is making cautious statements as well.

Source : www.thestreet.com