ImClone Systems has made its first substantial response to the $60 per share takeover bid received last week from Erbitux partner Bristol-Myers Squibb and the US biotechnology firm does not seem overly impressed by the cash offer.

Its board of directors has formed a committee to study the $4.5 billion offer and has retained advisors for advice. However, the “preliminary view is that the offer substantially undervalues ImClone”.

Furthermore, ImClone pointed out that it has been weighing up the possibility of separating the company into two – one that will concentrate on its Erbitux (cetuximab) cancer business and the other on the pipeline. The firm added that based upon “preliminary internal data, and recognising that the pipeline products are in various stages of development”, it still believes that the latter “may be extremely valuable and significantly increase stockholder value as a separate business”.

Back to the bid and apart from price, it appears that Carl Icahn, the feisty chairman at ImClone, is somewhat suspicious of B-MS’ motives. Although he was pleased by comments from the latter’s chief executive Jim Cornelius, praising him for his contribution to ImClone, he was “disturbed” that one of the directors on his board, John Celantano, who is the B-MS designee “was privy to the information discussed at previous meetings” concerning the separation of ImClone and how this restructuring might enhance stockholder value.

As a result of this, the firm is reviewing whether B-MS had “access to confidential information concerning ImClone and its pipeline”. Additionally, Mr Icahn made special mention of one of the antibodies in that pipeline, IMC-11F8, “which, if ultimately approved for sale, might have a significant competitive effect on Erbitux.” B-MS may have no rights to market that product under its agreements with ImClone, though the former believes it does have rights to 11F8.

'Full and fair offer made'
Furthermore, a spokesperson at B-MS told PharmaTimes World News that "as we stated last week, we believe we have made a full and fair offer” and “we look forward to a response from ImClone's board on that offer." When asked about the implications surrounding Mr Celantano’s presence, the spokesperson said that B-MS “was not privy to any confidential information that may have been discussed at ImClone board meetings concerning the potential restructuring”.

He noted that there has been a designee on the ImClone board since 2001 and “we have and continue to take measures to ensure the B-MS representative does not inappropriately share confidential information regarding ImClone to B-MS and about B-MS to ImClone”.