Despite saying it would not budge just over a week ago, Bristol-Myers Squibb has come in with a higher hostile bid in its attempt to acquire ImClone Systems.

B-MS is now offering $62 per share, up from $60, for the 83% stake it does not already own. This latest bid values the US biotechnology company at around $4.7 billion (instead of $4.5 million), which represents a 48% premium to ImClone's average share price in the three months ended July 31.

ImClone chairman Carl Icahn had already rejected the $60 per share offer and then stirred up a feverish guessing game among observers when he claimed to have had “several conversations” with the chief executive of “a large pharmaceutical company”. That firm has apparently submitted a proposal to acquire ImClone for $70 per share in cash.

However B-MS appears to have had a bellyful of Mr Icahn’s actions and is going straight to ImClone’s shareholders with a $62 tender offer. In a letter to Mr Icahn, B-MS chief executive James Cornelius said “there has not been any meaningful dialogue” regarding the original proposal and it has been nearly two weeks since the disclosure of the unnamed bidder.

As such, Mr Cornelius said that these delays, “combined with ImClone's lack of transparency, have created a protracted period of uncertainty among your stockholders, employees and other constituents which could hurt the intrinsic value of ImClone’s assets”. He added that “particularly in light of the current extraordinary market conditions, there needs to be an orderly and transparent process with a clearly delineated timeline in order to expedite a resolution of ImClone's future”.

Noting that Mr Icahn said before the ImClone annual meeting on September 10 that stockholders “should have a direct voice in these types of sales transactions”, Mr Cornelius said that “bringing our offer directly” to the shareholdersholders “allows them to evaluate the merits of our proposal and permits them a say in the future of their company, an approach I know you support”. He also outlined a proposed filing with the US Securities and Exchange Commission to “remove all existing members of ImClone’s board of directors and replace them with five highly qualified nominees proposed by B-MS”.

ImClone had yet to respond at the time of writing though it is expected that Mr Icahn is unlikely to be keen on the $62 per share offer. B-MS is attempting to get further control of Erbitux (cetuximab), currently indicated for metastatic colorectal cancer and the treatment of squamous cell carcinoma of the head and neck, which the two companies co-develop and co-promote in the USA.

Five-year data shows Erbitux survival benefit in head and neck cancer
Speaking of Erbitux, B-MS and ImClone put aside their differences for a while to present impressive five-year overall survival data from a Phase III study which shows that Erbitux combined with radiation significantly improved overall survival in patients with locally or regionally advanced squamous cell carcinoma of the head and neck, compared with radiation alone. The data were presented at the American Society for Therapeutic Radiology and Oncology meeting in Boston.

The IMCL-9815 trial, conducted by ImClone and European partner Merck KGaA, involved 424 previously untreated patients who were randomised to receive Erbitux plus radiation or the latter on its own. The overall survival rate at five years was 45% in the Erbitux group, compared with 36% treated with radiation alone, while after three years, the survival rates were 55% and 45%, respectively.