Sept. 10 (Bloomberg) -- Bristol-Myers Squibb Co. may have to raise its offer for ImClone Systems Inc. after Carl Icahn, chairman of the biotechnology company, said a ``large pharmaceutical company'' he wouldn't identify bid $6.1 billion.

The new $70-a-share takeover proposal exceeds the Bristol- Myers bid of $60 a share by 17 percent. ImClone today rejected the offer from Bristol-Myers for the part of ImClone that it doesn't already own as too low. ImClone shares didn't reach the level of the mystery proposal.

Bristol-Myers and ImClone share profits of ImClone's only marketed product, the cancer drug Erbitux, which had $1.3 billion in sales last year. The partnership makes ImClone an unattractive purchase to other drugmakers, analysts said. Bristol-Myers could afford to pay $72 a share for ImClone, and the combination would make Bristol-Myers an appealing takeover target, said analyst Timothy Anderson of Sanford C. Bernstein & Co. in New York.

``One of our investment themes around Bristol-Myers is that the company could be a takeout target itself,'' Anderson said in a note today. ``Accordingly it is possible a deal sequence may occur in a different order.''

Bristol-Myers, based in New York, owns 17 percent of ImClone, also of New York, and the bid for the remainder amounted to $4.4 billion. Icahn's Icahn Associates is the second-largest holder, at 13 percent as of June 30, according to Bloomberg data.

``We've never said $70 was adequate,'' Icahn said today at ImClone's shareholder meeting in New York. ``Regarding ImClone, I do think it will be sold.''

`Upper Hand'

ImClone rose $4.29, or 6.7 percent, to $67.94 at 4 p.m. New York time in Nasdaq Stock Market composite trading. Bristol-Myers dropped 37 cents, or 1.7 percent, to $21.67.

Bristol-Myers ``has the upper hand in the negotiations,'' said Rodman & Renshaw analyst Michael King in New York in an investment note today. A bid ``in excess of $70 will likely emerge for ImClone before an acquisition is concluded.''

Germany's Merck KGaA sells Erbitux outside the U.S., and some analysts speculated it made the offer. Phyllis Carter of Merck KGaA and Brian Henry of Bristol-Myers declined to comment.

ImClone is developing five experimental drugs for cancer. One of those, IMC-11F8, may compete with Erbitux, and Bristol- Myers may not have rights to market the drug under current agreements, Icahn said in an August statement. At the time, Icahn said the company may split itself to boost its value, separating out Erbitux.

Following Roche

Bristol's offer followed Roche Holding AG's $43.7 billion bid on July 21 to buy all of Genentech Inc. as big drugmakers seek to boost profits and gain new products from biotechnology partners. Genentech rejected the offer as too low.

``Certainly this isn't going to hurt Genentech,'' said David Heupel, a portfolio manager for Thrivent Financial for Lutherans, in a telephone interview today. ``I'd be inclined to think that if Bristol really wants it, $70 won't be enough. It'll probably take another $5 to get the transaction closed.''

ImClone and Bristol-Myers are testing Erbitux, currently approved to treat head and neck tumors as well as colon malignancies, for use in lung and cancer tumor types to expand its application.

Cancer medicines are the best-selling and fastest-growing major class of drugs in the U.S., and sales will surge 12 to 15 percent each year to top $75 billion by 2012, according to IMS Health Inc., a pharmaceutical industry research company in Norwalk, Connecticut.

To contact the reporter on this story: Elizabeth Lopatto in New York at elopatto@bloomberg.net

Last Updated: September 10, 2008 16:11 EDT