Posted on: Friday, February 13, 2004

ImClone takes another odd turn

By Matt Krantz
USA Today

The stock that got Martha Stewart into trouble has taken another bizarre twist.

As anticipated, ImClone's cancer drug Erbitux won approval from the Food and Drug Administration yesterday. The approval ends years of frustration by investors trying to forecast whether the drug would ever be cleared.

But highly curious trading just before the news was released added a chapter to the already befuddling ImClone saga. Shares of the stock abruptly tanked 21 percent just before the FDA news was released and before the stock was halted.

"There was market chatter it would not get approved," said David Witzke, analyst with SunTrust Robinson Humphrey.

Apparently the rumors made some already jittery traders sell their holdings. But this time, the chatter was wrong, and anybody who listened to it paid dearly.

When trading resumed after hours, shares not only made up their 21 percent loss yesterday, but gained 4 percent from Wednesday's closing price.

ImClone's stock became synonymous with illegal inside trading after former CEO Samuel Waksal tried to dump his shares before the FDA in late 2001 rejected the company's application.

Stewart is on trial on charges she tried to cover up that she sold her stock after getting tipped that Waksal was trying to sell his.