ImClone Systems Inc., which is being sued by investors who claim it hid negative information about research on its experimental cancer drug, said on Friday it has received inquiries from the Securities and Exchange Commission, the Justice Department and Congress.
The New York biotechnology company disclosed in a regulatory filing that the inquiries came from the SEC, the Justice Department and the House Energy Committee's subcommittee on investigations.
ImClone, which did not elaborate on the inquiries, said it intends to cooperate.
The company has been sued by investors who claim it made false and misleading statements about the prospects for Erbitux, an experimental treatment for colon cancer.
Bristol-Myers Squibb Co., which owns 20 percent of ImClone, also received a letter from the congressional subcommittee investigating the matter.
ImClone stock has been in a tailspin since late last year when the Food and Drug Administration refused to accept the company's application for the colorectal cancer drug Erbitux.
The drug had been touted as a potential blockbuster.
Earlier this month, information released by a trade publication indicated problems with the application were more serious than ImClone had led investors and analysts to believe when it disclosed the FDA rejection.
At least four lawsuits have been filed against ImClone alleging it trivialized the extent of the problem.
At a meeting last week, ImClone chief executive Samuel Waksal said some of the data the FDA wanted did not exist.
``It's not an insignificant problem,'' he said. ``We put together a faulty package and we screwed up.''
The triple inquiry announced Friday isn't likely to improve Imclone's prospects.
``The situation at this company just seems to go from bad to worse,'' said Sushant Kumar, an analyst at the health care investment firm Mehta Partners.
Kumar said mounting problems at the company almost ensure the drug will not be approved this year as originally hoped. He believes additional clinical trials will be required so the drug could not be approved until the second half of 2003 at the earliest.
Analysts are wondering what kind of due diligence Bristol-Myers conducted before entering the deal. Bristol-Myers has been beset by patent expirations of some of its top selling drugs and was seeking for ways to replenish its revenue stream.
``Everyone is really baffled by Bristol-Myers decision and they have not said anything really about the situation,'' said Kumar.
In addition to its initial $1 billion stake, Bristol-Myers has agreed to pay ImClone another $1 billion when it reaches certain development milestones.
Under the agreement, Bristol-Myers is to co-promote Erbitux and share in its revenues if it is ever approved.
Reuters and the Associated Press contributed to this report.
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