ImClone Systems Licenses Antibody Technology for Erbitux and IMC-11F8

ImClone Systems Incorporated has signed significant license agreements with Genentech and Centocor, Inc., granting the rights to patents covering various aspects of antibody technology and epidermal growth factor receptor (EGFR) antibodies. These licenses relate to Erbitux, a monoclonal antibody approved for use in metastatic colorectal cancer, and IMC-11F8, an investigational EGFR-targeted antibody. The agreements outline various royalty expenses, including a gross royalty expense of approximately 12.75% for Erbitux use in combination with anti-neoplastic agents, effective from February 24, 2004.

Key Takeaways:

ImClone Systems has licensed patented technology from Genentech and Centocor, Inc. for use in Erbitux and IMC-11F8, two cancer treatment programs.
The licenses for Erbitux use in combination with anti-neoplastic agents result in a gross royalty expense of 12.75% of North American sales, effective from February 24, 2004.
The net royalty expense for ImClone Systems is 8.25%, with reimbursements for a portion of the total expense, resulting in a net royalty expense of 8.25%.
After the first quarter of 2006, the gross royalty expense for Erbitux use in combination with anti-neoplastic agents decreases to 9.75%, and the net royalty expense decreases to 7.25%.
Certain terms, including enumerated royalty payments, were not disclosed due to the agreements' conditions.
ImClone Systems plans to become a fully integrated biopharmaceutical company, developing and commercializing targeted biologic treatments for various cancers.
The company's three programs focus on growth factor blockers, angiogenesis inhibitors, and cancer vaccines.
ImClone Systems limits its Erbitux sales to countries where the safety and efficacy of its product have been established.

Statistics:

12.75%: Gross royalty expense for Erbitux use in combination with anti-neoplastic agents, effective from February 24, 2004.
8.25%: Net royalty expense for ImClone Systems after reimbursements, effective from February 24, 2004.
9.75%: Gross royalty expense for Erbitux use in combination with anti-neoplastic agents, effective from after the first quarter of 2006.
7.25%: Net royalty expense for ImClone Systems, effective from after the first quarter of 2006.
Fourth quarter 2004 royalty expenses included adjustments required to align estimated royalty expenses with actual obligations.

Sources:

U.S. Patent 4,816,567
U.S. Patent 6,331,415
U.S. Patent 5,807,715
U.S. Patent 5,770,195