ImClone Considers Selling, Merging Company
{{#rendered}} {{/rendered}}Biotechnology company ImClone Systems Inc. (IMCL) on Tuesday reported a fourth-quarter profit that fell well short of Wall Street's expectations and said it is considering selling the company or merging it with another. It also appointed board member Joseph L. Fischer as interim chief executive.
ImClone shares rose $1.37, or 4 percent, to $35.43 =on the Nasdaq after the news of its possible sale. The stock has traded in a 52-week range of $28.26 to $46.
The maker of colorectal cancer treatment Erbitux, which became ensnared in the Martha Stewart insider trading scandal in 2001, said it hired investment bank Lazard LLC to help it review its alternatives. The company may also consider a strategic alliance, and will consult with its partners during the process.
{{#rendered}} {{/rendered}}"Following a review of the company's business, products, assets and current strategic position, the board of directors has determined that it is now appropriate to initiate an external process to explore ways of enhancing shareholder value," Fischer said in a statement.
ImClone said Fischer, a member of its board since 2003, will replace Philip Frost, who was named interim CEO in November. Former CEO Daniel S. Lynch resigned in November for unspecified reasons.
The company said Fischer will give up his membership on its audit and compensation committees because of the appointment. Frost will remain as executive vice president and chief scientific officer, it said.
{{#rendered}} {{/rendered}}"In light of the significant strategic review being embarked upon, the board of directors decided it was important to have an executive with Joe's financial and managerial background leading the company," said Chairman David M. Kies.
ImClone said it does not plan to disclose further information about the strategic review until the process is completed or it reaches an agreement.
The company also Tuesday reported that it swung to a fourth-quarter profit of $13.1 million, or 15 cents per share, up from a loss of $13.2 million, or 16 cents per share, a year ago. The 2004 quarter included a $55.4 million shareholder litigation settlement.
{{#rendered}} {{/rendered}}Revenue fell 9 percent to $98.2 million from $107.3 million last year, even as royalties from sales of Erbitux rose to $52.6 million from $36.5 million a year ago.
Analysts surveyed by Thomson Financial expected earnings per share of 28 cents on revenue of $115.3 million.
For the full year, the company posted net income of $98.9 million, or $1.14 per share, down from $113.7 million, or $1.33 per share, last year. Revenue fell 2 percent to $382.9 million from $388.7 million last year. Analysts forecast earnings per share of $1.31 on revenue of $398.8 million.