But even if regulators ultimately approve Erbitux, analysts say delays in getting it to market may have already hurt its sales potential.
ImClone and Bristol-Myers Squibb Co. said Thursday they will use new data on the cancer treatment to resubmit an application to regulators later this year to sell the drug in the United States. Bristol owns 20 percent of ImClone, and will co-promote Erbitux and share in its profits.
The new application will include data released last Sunday at the American Society of Clinical Oncology meeting which found the drug effective in shrinking tumors of some colon cancer patients. If the application is approved by the Food and Drug Administration, the drug could be on the market by next year.
Shares of both companies surged Friday on the news, which was released after the close of markets Thursday. ImClone shares jumped 19 percent, or $7.16, to $45.69 in morning trading on the Nasdaq Stock Market, while Bristol shares gained $1.54, or 6 percent, to $27.50 on the New York Stock Exchange.
Analysts say Erbitux almost certainly will get a six-month review by the FDA because it is a novel treatment. Drug reviews typically take a year.
ImClone initially submitted an application for Erbitux in December 2001, but the FDA rejected it, saying the drug trial was flawed. The rejection threw the stock into a tailspin and sparked an insider trading scandal that led Waksal to plead guilty to several charges, including fraud.
Stewart was indicted Wednesday and resigned as chief executive of her media company.
"Given the history of the drug, I think ImClone and Bristol are going to take their time to compile the data properly," said John McCamant, editor of the Medical Technology Stock Letter.
McCamant predicted that Erbitux will eventually be approved but doesn't think it will be a blockbuster because of competition. He said Genentech's experimental colon cancer drug Avastin will likely be on the market first. McCamant predicts Erbitux sales will hit $500 million by 2005.