Bristol, ImClone Compromise Expected

Pharmaceutical giant Bristol-Myers Squibb Co. and its research partner ImClone Systems Inc., reeling from a setback to their anti-cancer drug Erbitux, will probably work toward a compromise even as they fight in public over control of the drug, analysts said.

ImClone’s directors are expected today to reject an ultimatum sent several days ago by Bristol-Myers Squibb, demanding a bigger share of future profit from Erbitux and more control over efforts to gain regulatory approval. The big drug maker also demanded the resignation of ImClone’s top two executives.

In September, Bristol-Myers Squibb agreed to pay up to $2 billion for a 20% stake in ImClone in the belief Erbitux would be a blockbuster drug. But the Food and Drug Administration in December refused to review the tumor-fighting drug, saying ImClone had provided insufficient clinical data.

Congress and securities regulators are investigating allegations that ImClone hid negative information about research into Erbitux.

Analysts said both companies have an incentive to compromise and avoid a lengthy court battle.

Unless a compromise is reached, Bristol-Myers will have to walk away from its deal with ImClone, or take its partner to court for breach of contract or fraud, analysts said.

Analysts said a compromise also is in the interests of ImClone, which needs to rebuild credibility with disgruntled shareholders. ImClone has lost about two-thirds of its value since the FDA decision in late December.