Aug. 4 (Bloomberg) -- Carl Icahn, ImClone Systems Inc.'s chairman and second-biggest shareholder, said Bristol-Myers Squibb Co.'s $4.3 billion buyout offer is too low and the company may split itself to boost its value.

The bid ``greatly undervalues'' ImClone's lineup of experimental cancer drugs, Icahn said today in a statement issued by ImClone. The drugmaker is investigating whether a Bristol-Myers representative on its board shared confidential information about its experimental drugs and its plans to split off its only approved product, the cancer drug Erbitux, as a separate business, according to the statement.

Bristol-Myers already owns 16.6 percent of ImClone, and the companies share the profits of Erbitux, which had worldwide sales of $1.3 billion last year. ImClone is also developing five experimental drugs for cancer. One of those, IMC-11F8, may compete with Erbitux, and Bristol-Myers ``may have no rights to market that product under its agreements with the company,'' according to the statement.

Icahn's talk of splitting the company is ``more a statement of the fact that $60-a-share in his opinion is not a sufficient offer,'' said Seamus Fernandez, an analyst at Leerink Swann & Co. in Boston. ``If Bristol wants all of the assets, they're going to have to at least pay a reasonable market price for the rest of the pipeline.''

That would be about $65 to $70 a share, Fernandez said today in a telephone interview, based on an analysis of the parts of the company. Bristol-Myers offered $60 a share on July 31 for the rest of ImClone. A competing offer from another bidder is unlikely because of Bristol-Myers's claim on Erbitux revenue, Fernandez said.

Closing Shares

ImClone fell 31 cents, or less than a percent, to $65.03 at 4 p.m. New York time in Nasdaq Stock Market composite trading. Bristol-Myers shares rose 28 cents, or 1.3 percent, to $21.39 on the New York Stock Exchange.

Bristol-Myers, of New York, was the world's biggest seller of cancer medicine before its drug Taxol faced competition from cheaper copies in 2001. The same year, the drugmaker joined ImClone to market Erbitux. Bristol's offer follows 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.

``As we stated last week, we believe we have made a full and fair offer,'' said Bristol-Myers spokeswoman Tracy Furey in an e-mailed statement today. ``We look forward to a response from ImClone's board on that offer.''

Analyst Fernandez said Bristol-Myers ``never stated on its conference call that this is a final offer.''

``It's clear that the door is open to pay more, and that's already reflected in the stock price,'' he said.

Corporate Strategy

John E. Celentano, Bristol's representative on ImClone's board, didn't return phone calls for comment. Celentano is responsible for corporate strategy and the company's ``productivity transformation initiative,'' according to Bristol Myers's Web site. Previously, he was in charge of the company's Medical Imaging and ConvaTec units, which were sold for more than $4.5 billion this year to help raise money for acquisitions.

``Bristol-Myers Squibb was not privy to any confidential information that may have been discussed at ImClone board meetings concerning the potential restructuring of ImClone's business,'' Furey said.

Expanding Use

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 use.

Cancer drugs 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, a pharmaceutical industry research firm.

Icahn, 72, who had a 13 percent stake in ImClone as of March 31, is known for activist investing. He's joining Yahoo! Inc.'s board after dropping a campaign to oust its directors, who rejected a buyout offer of $47.3 billion from Microsoft Corp. He also made big bets on pharmaceutical and biotechnology companies this year, adding to his stakes in Biogen Idec Inc. and Amylin Pharmaceuticals Inc. He succeeded in forcing the sale of MedImmune Inc. to AstraZeneca Plc in June 2007.

To contact the reporter on this story: Tom Randall in New York at trandall6@bloomberg.net.

Last Updated: August 4, 2008 18:01 EDT