Erbitux little help with colorectal cancer

CHICAGO (CNNMoney.com) -- The drug Erbitux from ImClone and Bristol-Myers Squibb prolonged survival by a little less than a month in colorectal cancer patients getting chemotherapy who had not been previously treated, according to study results announced Monday.

Colorectal cancer patients who used Erbitux combined with chemotherapy survived an average of 8.9 months, compared to 8 months for patients getting chemo alone, according to the study, which tracked 599 patients in each group. The results were announced Monday at the annual conference of the American Society of Clinical Oncology (ASCO).

Investors weren't impressed with the results and ImClone (up $0.65 to $40.09, Charts) stock sank about 3 percent on the news.

The stock decline came despite the fact that the study was considered successful, according to lead researcher Dr. Eric Van Cutsem, professor from the University Hospital Gasthuisberg in Belgium. Cutsem told CNNMoney.com that the study met its goal of lengthening life without the spread of cancer.

But this wasn't enough for analysts, who said that Genentech's (down $1.64 to $75.85, Charts) drug Avastin will remain the market leader in treating colorectal cancer.

"The [Erbitux] trial appeared to work but certainly the increase in survival is not overwhelming," said Joe Tooley, analyst for A.G. Edwards.

"We were a little bit disappointed," said Michael King, analyst for Rodman & Renshaw.

The stock fell last month after the results of the study were distributed among ASCO members and then made its way into news stories.

Erbitux has had a volatile history. The drug recently failed a study as a potential treatment for pancreatic cancer. Also, an insider trading scandal over the drug's disappointing results in an earlier study landed the company's ex-CEO Sam Waksal in jail, along with domestic diva Martha Stewart.

Erbitux is already approved by the Food and Drug Administration to treat colorectal cancer in patients who have tried other types of treatment that haven't been effective.

The New York-based biotech, along with its marketing partner Bristol-Myers (Charts, Fortune 500), are trying to see if the drug can be expanded into broader areas of treatment, which could result in additional sales. Bristol-Myers stock was little changed in New York Stock Exchange trading Monday morning.

Sales of Erbitux, which is approved to treat some colorectal cancer as well as head and neck cancer, totaled $1.1 billion last year.

On Saturday, researchers at ASCO unveiled study results showing that Erbitux is effective in treating late-stage head and neck cancer. The study showed that Erbitux with chemotherapy prolonged life by nearly three months more than chemo alone. The 222 Erbitux patients survived an average of 10.1 months, compared to the 220 non-Erbitux patients who survived 7.4 months.

Correction: A prior version of this story misidentified the maker of Avastin.