Citigroup Ups ImClone Systems to Buy

Analyst Yaron Werber cites positive study data of Erbitux for head and neck cancer patients

Citigroup upgraded ImClone Systems (IMCL ) to buy.

Analyst Yaron Werber says Phase III data showing 93% improvement in median survival amongst patients with head and neck cancer a landmark in cancer drugs. He says Citigroup's physician consultants believe the data should support approval, and expects the company to file by year-end.

Werver says he's modeling for approval in the first half of 2005. He notes ImClone will receive a $250 million milestone payment from Bristol-Myers for approval. Due to higher sales, and the amortization of the milestone payment, he raised the $2.00 2005 EPS estimate to $3.10, upped the $2.35 2006 estimate to $2.90, upped the $2.40 2007 estimate to $3.00, and upped the $2.65 2008 estimate to $3.40. He raised the $90 target to $105.

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