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Ball in ImClone's court
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February 6, 2002: 1:39 p.m. ET
Troubled biotech may have to cede Erbitux control or lose BMY support.
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NEW YORK (CNN/Money) - Shares of embattled biotech ImClone declined slightly midday Wednesday as the company reviewed a demand from Bristol-Myers Squibb to completely restructure their deal involving cancer drug Erbitux.
On Tuesday, Bristol-Myers called for ImClone to yield control of the FDA approval process for Erbitux in the wake of class action suits and informal federal investigations for ImClone allegedly making misleading statements about the drug.
ImClone (IMCL: down $0.58 to $16.40, Research, Estimates) said it would review the proposal and respond in due course.
Lehman Bros. drug analyst Tony Butler said in a research note a resolution should occur within the week.
"At this stage in the process, it might be in ImClone's best interest to accept the current restructuring," Butler said. "It is clear from our sources that Bristol-Myers [executives] are in no way interested in a protracted negotiation with ImClone."
"Bristol-Myers' aggressiveness should be self-evident," he said.
According to Butler, in addition to control of all FDA negotiations, Bristol-Myers is calling for no more milestone payments for Erbitux, a shift to favor Bristol-Myers with the larger percentage of royalties, and the removal of Sam Waksal, president and CEO, and COO Harlan Waksal until the cancer drug is approved.
Bristol-Myers (BMY: up $0.04 to $43.74, Research, Estimates) has already paid $200 million in milestone payments and $1 billion for ImClone equity. 
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