Last night, Bristol-Myers (BMY) announced plans to increase its bid for the remaining 83% of ImClone Systems (IMCL) it does not already own to $62 per share and plans to take the offer directly to shareholders in the form of a tender offer. ImClone and Chairman Carl Icahn rejected a $60 per share cash bid from Bristol-Myers at the end of July and stated that a mystery big pharma bidder had emerged at $70 per share, as I last wrote about here . Besides Bristol-Myers 17% stake in ImClone, the two companies are marketing partners for Erbitux in North America (BMY receives 61% of sales in the U.S. and Canada) and recently filed with the FDA to expand the label of the drug to include the first-line treatment of head and neck cancer.
As illustrated in the accompanying one-year chart, ImClone has outpaced the overall biotech and pharma space despite a slight pullback recently on skepticism over the mystery $70 per share bidder. Shares of ImClone rose in after-hours trading to $62 from a close of $59.40 per share on light volume as the news was released near the end of the evening session. Regardless of the outcome, Bristol-Myers figures to play a prominent role in the sale of ImClone given its stake as a major shareholder, majority marketing partner for Erbitux in North America, and lagging share price in need of a positive growth catalyst.
$20.63 (09/23/08)
