Perhaps Martha Stewart should have held onto that ImClone stock a little longer. Not only would she have avoided jail time, but she might have earned a little more bang for her buck. Bristol-Myers Squibb’s $4.5 billion bid to acquire the 83% of ImClone it doesn’t already own values the company’s shares at $60 a pop (ironically, the same price that triggered Martha’s stock ditch in 2001).
But speculation over the deal has already raised the stock’s price tag above that bar and ImClone has hinted that it may seek a higher offer.
BMS’s unsolicited takeover attempt marks the second large biotech takeover attempt by a big-name pharmaceutical firm this summer (the first was Roche’s bid for Genentech) and is part of the larger and seemingly intensifying trend of the pharma industry’s shift towards biopharmaceuticals. (It’s a sign of the times, but also of dwindling revenues from traditional drugs.)
What is BMS hoping to gain through the purchase? While ImClone only has one commercial product (cancer treatment Erbitux, which is approved to treat colorectal, head, and neck cancers), that single product brings in over $1 billion in annual revenue. ImClone also has a pipeline of similar antibody-based cancer drugs, and it is pursuing additional indications for Erbitux. If the company’s development candidates make it to market ImClone will also hold a corner on treatments for lung, pancreatic, breast, prostate, and ovarian cancers.
So despite a history laden with patent disputes, management shake-ups, and stock-trading scandals, ImClone represents an opportunity for growth to the struggling BMS. Whether ImClone accepts the offer is another question. The biotech indicates that it may decide on another course to maximize shareholder value, such as the separation of its Erbitux and development operations into two companies.
The deal’s success will also largely depend on the opinion of ImClone chairman Carl Icahn, the formidable investor who has already voiced his doubts on the BMS offer.
Comments
keen observer Says:
August 5th, 2008 at 10:18 am
If Martha Stewart wasn’t targeted for destruction for political gain, she would have “avoided jail time.” If Martha Stewart wasn’t targeted for political persecution in a colossal waste of taxpayer resources, she would have “avoided jail time.” If Marth Stewart wasn’t railroaded and persecuted on trumped-up charges, masterminded out of the ether by a rogue prosecutor, and a bogus conviction, she would have “avoided jail time.”
Ms. Stewart sold 3,928 shares of over 7,000,000 ImClone shares that were traded on Dec. 27, 2001. These were remnant shares from an over-subscribed tender offer from Bristol-Myers two months before the sale. Her small-time, legal remnant sale was no basis for any “jail time.” The acceptance of the tender offer showed Ms. Stewart had no interest in any “bang for her buck” but simply in sound investment management principles and sensible divestiture of the stock.
Martha Stewart’s inconsequential ImClone stock sale is in the distant past now, and it is about time that the media allow this perfectly legal, puny stock trade to R.I.P IN THE PAST and end the repetitive false reporting.
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