ImClone Systems Inc (formerly IMCL)

[jbog]

Adam Feuerstein
Biotech M&A buzz: Why not ImClone?
10/15/2007 1:07 PM EDT



Speaking with another buyside friend about biotech and all the M&A buzz today. [If you hadn't heard, Genzyme is also being identified as a potential acquisition target, at least by Bear Stearns biotech analyst Mark Schoenebaum.]

Back to Biogen Idec for a sec, my friend thinks that all the Tysabri talk is a head fake The thing Big Pharma really wants is biologics manufacturing capacity because it's not easy to do and hard to build. Better to just buy it. It's a point similar to one I made in my earlier post here.

So, who has biologics capacity? Genentech (Roche already owns half, so not a buyout candidate), Biogen Idec, Genzyme, Medimmune (bought by AstraZeneca), Amgen (too big, too troubled) and ImClone Systems.

If I look at this list, the company that intrigues me the most is Imclone. They have a huge biologics manufacturing facility in New Jersey - brand spanking new with a recent expansion, FDA approved, and not being used at full capacity. Erbitux's position in the colon cancer market is secure and getting better, and now, it looks like the drug will have a place at the lung cancer table. If the "FLEX" data is what I hear it is (the rumor mill a-churnin') then Imclone is definitely getting lucrative share of lung cancer revenue. I laid out some numbers in this column, for those interested.

Yes, ImClone is a bit entangled with Bristol Myers Squibb over Erbitux, but then, it's no worse (actually better) than all the Biogen Idec entanglements.

To me, ImClone looks like the undervalued biotech asset amidst all this biotech M&A talk.