updated 10/25/2006 12:35:35 PM ET 2006-10-25T16:35:35

Biotech drugmaker ImClone Systems Inc. said Wednesday that it named financier Carl Icahn as its new chairman and reported its third-quarter earnings rose 85 percent— results that far exceeded analysts’ expectations.

The company said Joseph L. Fischer resigned as interim chief executive, a position he has held since the beginning of the year, and as a board member. Icahn had been seeking to remove him and three other directors from the board.

Fischer will be replaced by a newly formed Executive Committee of the Board, chaired by board member Alex Denner, who works for Icahn.

ImClone’s net income grew to $57.3 million, or 65 cents per share, from $31 million, or 35 cents per share, a year ago.

Revenue rose 42 percent to $150.7 million from $106.5 million last year. ImClone’s only product, cancer drug Erbitux, is marketed with Bristol-Myers Squibb Co., which owns roughly 17 percent of the biotech company.

Royalty revenue from Bristol-Myers rose 69 percent to $78.6 million from $46.6 million last year. Bristol-Myers reported Erbitux sales of $174.6 million, compared with $107 million a year ago.

Analysts surveyed by Thomson Financial expected earnings per share of 45 cents per share on revenue of $163.3 million.

Banc of America analyst David Witzke, who rates the company a “buy,” said in a research note that ImClone beat his forecast and the Street’s because of significantly lower-than-expected research and development and selling, general and administrative costs.

ImClone’s R&D costs fell 9 percent to $26.4 million, and SG&A expenses declined 19 percent to $16 million from last year.

Witzke said Fischer’s resignation is a positive development because he had lost the confidence of investors and the internal management team.

Icahn appointment comes following the departure of former chairman David M. Kies and board member William W. Crouse resigned earlier this month amid squabbles between the company and Icahn.

In September, Icahn, who owns about 14 percent of the company, filed a proxy statement to remove half of Imclone’s board because he said they have done a deplorable job running the company. Now that three of the six directors Icahn sought to remove are gone, the board is primarily comprised of his allies.

Among Icahn’s criticisms was the failure of the board to lure a talented industry executive to ImClone’s helm.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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