ImClone Systems has posted a loss for the third quarter, hit by a $50 million charge relating to patent litigation, but its cancer drug Erbitux is showing promising signs of growth again.

The firm’s loss was $916,000, or $0.01 per share, compared with net income of $57.3 million, or $0.65, a result which was mainly due to the aforementioned $50 million charge to settle a patent dispute with the Massachusetts Institute of Technology and Repligen Corp over Erbitux (cetuximab). The total settlement was $65 million.

Revenues slipped 2.1% to $147.5 million but ImClone’s royalties from the sales of Erbitux (cetuximab) booked by European partner Merck KGaA and Bristol-Myers Squibb were up 12% to $87.9 million. ImClone gets a 9.5% royalty of Merck’s revenues from the drug and a 39% royalty from B-MS. License fees and milestone revenue were down 45% to $19.2 million, however, which is a result of the firm’s amended agreement with B-MS, which will see the latter up its commitment to developing Erbitux in other indications.

The company said that the latter decrease was due to the fact that the like, year-earlier results were boosted by a one-time bolus of sales of $15 million related to pent-up demand for the Erbitux plus competition from Amgen’s rival drug Vectibix (panitumumab), though ImClone said that the second quarter saw it reverse a negative sales trend observed since the introduction of panitumumab in the third quarter last year.

Erbitux is currently indicated for colon and head-and-neck cancer but ImClone is under pressure, not least from its billionaire chairman Carl Icahn, to get approvals for the drug in other indications. In particular, all eyes have been on the FLEX study, the most recent findings from which “establish Erbitux as the only EGFR-expressing monoclonal antibody to demonstrate survival in the first-line treatment of patients with advanced non-small cell lung cancer", said chief executive John Johnson.

Cowen and Co analyst Eric Schmidt issued a research note saying that the most important factor for ImClone's share price “continues to be the quality of data from the FLEX trial” and positive data “could open a $1 billion-plus opportunity for Erbitux”. However, JPMorgan analyst Geoffrey Meacham said he was remaining neutral on the stock, especially in the light of “the modest benefit” seen in another Erbitux trial, CRYSTAL, which is looking at the drug as a treatment for metastatic colorectal cancer.