12:00 AM
Jan 28, 2002
 |  BioCentury  |  Finance

Ebb & Flow

ImClone's fall appeared to hit a sordid bottom on Thursday with a "tell-all" story in The New York Timesthat ventured into the personal lives of the company's management. But IMCL filed several 8-Ks on Friday that quickly made bird cage liner of the Timesarticle.

Friday's news included disclosure of emergency stock sales to meet executive margin calls; the resignation of an IMCL board member; and the fact that the SEC and Justice Department are inquiring into the company's handling of its Erbitux trials and BLA submission.

The stock slid $3.09 (16%) to $16.49 on 22.9 million shares on Friday, putting it down $4.66 (22%) on the week.

Friday's hot poop included news that Bank of America and UBS PaineWebber collectively sold 2.9 million IMCL shares pledged by President and CEO Samuel Waksal and his brother, EVP and COO Harlan Waksal. The two had pledged the shares as collateral for a loan made to Samuel Waksal by both banks.

Friday's fall was on top of a $2 slide to $19.15 on 12.8 million shares on Tuesday - the stock's first day of trading following an announcement the prior Friday (Jan. 18) that a congressional committee is investigating the development of Erbitux, FDA's refusal to file a BLA for Erbitux for colorectal cancer and stock transactions by company insiders (see BioCentury, Jan. 22).

While the margin call sale prices weren't disclosed, the sales occurred on Jan. 18, the same day the House Energy and Commerce Committee said it was investigating the company. IMCL lost $8.93 (30%) to $21.15 on that day.

IMCL also disclosed on Friday that Peter Peterson - chairman of The Blackstone Group - resigned from the company's board after less than three months of service.

Also providing selling pressure was Thursday's news that partner Bristol-Myers Squibb (BMY) already has written off $735 million of its IMCL transaction. BMY has paid out $1.2 billion under the companies' September 2001 Erbitux partnership: $1 billion of existing IMCL stock purchased at $71 per share for a 20% equity position and $200 million in upfront payments to the company.

The stock is down $58.96 (78%) from its Dec. 6 high of $75.45. IMCL's market cap now is $1.2 billion.

IPO watch

Add Zycos to the list of companies that is keeping its eye on the public markets. The company last week signed a deal to develop and commercialize antibodies with Medarex (MEDX), which will contribute its UltiMAb Human Antibody Development System while Zycos will use its Canvas protein expression screening technology to identify targets. The companies will share costs and revenues equally (see B4).

Zycos hopes to have at least three compounds in the clinic within a year, according to...

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