Biotech Values

[DewDiligence]

Re: IMC-11F8 vs Erbitux

The value of IMC-11F8 has taken center stage in the bidding war for IMCL, but I think the Street misunderstands the way IMC-11F8 is likely to be positioned in the marketplace (assuming eventual regulatory approval). Articles in the business press typically describe IMC-11F8 as a “fully human Erbitux” or a “better version of Erbitux,” which misses the point, IMO.

As far as I can tell, IMC-11F8 will not be better than Erbitux, but rather will be safer. Consequently, it will be better suited than Erbitux to chronic autoimmune conditions such as psoriasis. Erbitux will likely have the edge as a treatment for cancer.

When seen in this light, the keen interest of BMY and the unnamed IMCL suitor (my guess: SNY) in IMC-11F8 is easy to understand. IMC-11F8 has the potential not only to compete with Erbitux but also to expand the EGFR franchise into a whole new area: autoimmune diseases.

Given that the ownership of IMC-11F8 remains unclear (#msg-31363115), it might be wise for the IMCL suitor to attempt to acquire BMY too as this eliminates the molecule-ownership risk in one fell swoop.

Alternatively, the IMCL suitor could work out a three-party, two-step deal in which BMY is allowed to acquire IMCL in the first step and the suitor acquires BMY in the second.

Comments welcome.