It seems that Bristol-Myers Squibb has no intention of raising its $60 per share bid for ImClone Systems judging by the tone of its response to the news that the latter has received a higher offer from an unnamed drugmaker.

B-MS was responding to a statement issued by ImClone’s chairman, Carl Icahn, who confirmed that a special committee had rejected a $4.5 billion cash offer to buy the 83% stake the former does not already own. Mr Icahn then put the cat among the pigeons by saying he has had “several conversations” with the chief executive of “a large pharmaceutical company”. That firm has submitted a proposal to acquire ImClone for $70 per share in cash.

That news prompted B-MS chief executive James Cornelius to write to Mr Icahn saying that “we were disappointed to learn, nearly six weeks after we announced our offer, that ImClone's special committee unilaterally rejected our offer without discussing its merits with us and our advisors”. He also noted that the proposal received from an unnamed party “is fully subject to due diligence” in contrast to B-MS’ bid, which “ has been fully disclosed to ImClone's stockholders”.

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. Mr Cornelius noted that his firm holds the “exclusive, long-term marketing rights” in the United States to Erbitux and related compounds, including the Erbitux follow-up IMC-11F8 and it has “no intention of agreeing to any modifications to these rights”

Mr Cornelius also noted that ImClone “also should understand that our offer is for the entire company” and any potential restructuring “could severely jeopardise ImClone's value” and deprive its stockholders of the benefits of our offer”. The biotech firm had previously mentioned that its pipeline “may be extremely valuable and significantly increase stockholder value as a separate business”.

Mr Icahn responded with a letter of his own and told Mr Cornelius that “I don't understand your point”. He said that the original $60 per share unsolicited offer was submitted “without trying to have a conversation first to discuss B-MS’ intentions” but “you now complain that we rejected the offer as inadequate without discussing the merits with you. You are aware of course that I tried to reach you to discuss our position before we made it public”.

Dispute over rights
With regards to IMC-11F8, “we disagree that B-MS' rights are clear and do not waive any rights that we may have with regard thereto”, Mr Icahn said. With respect to a potential restructuring of ImClone, “rest assured that we will act in what we consider the best interests of all our shareholders and not just B-MS”, he added.

Analysts believe that this exchange between the firms’ bosses does not necessarily mean that a bigger bid from B-MS should be ruled out. Furthermore the partnership on Erbitux could complicate offers from other firms, wrote Michael King at Rodman & Renshaw in an investment note.

He noted that "in our view, a bid in excess of $70 will likely emerge for ImClone before an acquisition is concluded,'' However, “we would point out that B-MS has the upper hand in the negotiations,'' he added.