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-- Royalty revenue of $78.6 million in the third quarter of 2006 compared with$46.6 million in the third quarter of 2005, an increase of 69%. Royalty revenuefor the third quarter of 2006 includes 39% of Bristol-Myers Squibb's in-marketERBITUX net sales of $174.6 million, compared with third quarter 2005 in-marketnet sales of $107.0 million, an increase of 63%. These in-market sales,reflecting a drop-ship distribution methodology, represent ERBITUX shipments toend-user accounts only, with no wholesaler stocking;

-- License fees and milestone revenue of $34.9 million in the third quarter of2006 compared with $27.1 million in the third quarter of 2005;

-- Manufacturing revenue of $20.9 million in the third quarter of 2006 comparedwith $10.7 million in the third quarter of 2005. The increase of $10.1 millionprincipally reflects an increase in volume purchases by Bristol-Myers Squibb.Purchases by Bristol-Myers Squibb are timed at their discretion to accommodateforecasts and safety stock needs, and are not necessarily indicative ofhistorical in-market sales or future sales expectations; and

-- Collaborative agreement revenue of $16.3 million in the third quarter of 2006compared with $22.0 million in the third quarter of 2005. The decrease of $5.7million principally reflects a reduction in clinical materials shipped to MerckKGaA versus the comparable quarter in 2005.

Total operating expenses for the third quarter of 2006 were $93.2 million,compared with $80.3 million in the third quarter of 2005. Operating expensesincluded:

-- Research and development expenses for the third quarter of 2006 were $26.4million (or $26.0 million in the third quarter of 2006 excluding stock optionexpense of $.4 million), compared with $29.0 million in the third quarter of2005. The decrease in the quarter is principally due to a reduction in clinicalmaterials sold to Merck KGaA;

-- Clinical and regulatory expenses in the third quarter of 2006 were $13.5million (or $13.2 million excluding stock option expense of $.3 million),compared with $13.6 million in the third quarter of 2005;

-- Marketing, general and administrative expenses were $16.0 million in thethird quarter of 2006 (or $14.8 million excluding stock option expense of $1.2million), compared with $19.5 million in the third quarter of 2005. The decreaseis principally attributed to lower legal fees and professional services feesfrom the comparable quarter in 2005;

-- Royalty expenses were $18.1 million in the third quarter of 2006 comparedwith $15.2 million in the third quarter of 2005 as the result of higher sales.Approximately $9.1 million and $5.5 million in 2006 and 2005, respectively werereimbursed as a component of collaborative agreement revenue, resulting in netroyalty expenses of $9.0 million for the third quarter of 2006 compared with$9.7 million in the third quarter of 2005; and

-- Cost of manufacturing revenue was $19.2 million in the third quarter of 2006compared with $3.1 million in the third quarter of 2005. The 2006 costsrepresent fully absorbed manufacturing costs, as substantially all previouslyexpensed material was sold through to our partners in 2005.

Operating income in the third quarter of 2006 was $57.5 million compared with$26.3 million in the third quarter of last year.

The effective tax rate for the full year 2006 is estimated to be approximately14%, excluding the effect of an adjustment recorded in the third quarter of 2006of approximately $1.8 million, resulting from changes in tax rates in certainjurisdictions. The resulting effective tax rate for the third quarter and ninemonths of 2006, including such adjustment, is 12.6% and 14.4%, respectively.These estimated rates exclude the release of a portion of the Company's taxvaluation allowance in the first quarter of 2006. The estimated tax rate for thequarter and full year 2006 is slightly lower than the 15% previously estimatedat the end of the second quarter of 2006.

Net income for the third quarter of 2006 was $57.3 million compared with $31.0million in the third quarter of last year. Diluted earnings per share were $.65in the third quarter of 2006 compared with $.35 in the third quarter of 2005.

Total revenues and net income for the nine months ended September 30, 2006 were$545.7 million and $324.1 million, respectively, compared with $284.7 millionand $85.8 million in the nine months ended September 30, 2005. Diluted earningsper share were $3.58 for the first nine months of 2006 compared with $.98 forthe first nine months of 2005. The results for the first nine months of 2006include the effect of the receipt of the $250 million milestone fromBristol-Myers Squibb and the partial release of the tax valuation allowancementioned above.

To provide investors with a clearer picture of the Company's growth versus lastyear, a reconciliation of non-GAAP diluted earnings per share to dilutedearnings per share prepared in accordance with GAAP is set forth below. For2006, non-GAAP diluted earnings per share for the quarter exclude the effects ofstock option expense and, for the nine months year-to-date, exclude the effectsof stock option expense and the tax benefit associated with the release of aportion of the Company's deferred asset valuation allowance in the first quarterof 2006. For 2005, non-GAAP diluted earnings per share for the third quarter andfirst nine months exclude expenses associated with the discontinuance of theCompany's small molecule research operation.

                                     (Diluted per share amounts)

                                             (Unaudited)

                               Three Months Ended   Nine Months Ended

                               Sept. 30, Sept. 30, Sept. 30, Sept. 30,

                                  2006      2005      2006      2005

GAAP diluted earnings per

share                         $    .65  $    .35  $   3.58  $   0.98

Release of deferred tax

valuation allowance                  -         -    ($1.08)        -

Stock option expense           $    .02         -  $    .06         -

Impact of discontinuance of

small molecule research              -         -         -  $    .07

                               ------------------- -------------------

Non-GAAP diluted earnings per

share                         $    .67  $    .35  $   2.56  $   1.05

The Company believes that it is useful to present non-GAAP diluted earnings pershare financial measures because it provides investors with a more completeunderstanding of the Company's underlying operational results and trends. Youshould not consider non-GAAP diluted earnings per share financial measures inisolation or as a substitute for such measures determined in accordance withU.S. GAAP, as set forth above. Our definition of non-GAAP earnings may differfrom other such measures.

Conference Call

ImClone Systems will host a conference call with the financial community todiscuss third quarter 2006 financial results on Wednesday, October 25, 2006 at11:00 AM Eastern Daylight Time.

The conference call will be webcast live and may be accessed by visiting ImCloneSystems' website at www.imclone.com. A replay of the audio webcast will beavailable under "Earnings Webcast" in the "Investor Relations" section of theCompany's website starting shortly after the call on October 25, 2006.

Those parties interested in participating via telephone may join by dialing(800) 418-6860 domestically, or (973) 935-8756 for calls outside of Canada andthe United States, and referencing conference identification number 7985471. Atelephone replay of the conference call will be available shortly after the calluntil November 1, 2006 at midnight Eastern Daylight Time. To access thetelephone replay, dial (877) 519-4471 domestically, or (973) 341-3080 for callsoutside of Canada and the United States, and enter the conference identificationnumber 7985471.

About ImClone Systems Incorporated

ImClone Systems Incorporated is committed to advancing oncology care bydeveloping and commercializing a portfolio of targeted biologic treatmentsdesigned to address the medical needs of patients with a variety of cancers. TheCompany's research and development programs include growth factor blockers andangiogenesis inhibitors. ImClone Systems' strategy is to become a fullyintegrated biopharmaceutical company, taking its development programs from theresearch stage to the market. ImClone Systems' headquarters and researchoperations are located in New York City, with additional administration andmanufacturing facilities in Branchburg, New Jersey.

Certain matters discussed in this news release may constitute forward-lookingstatements within the meaning of the Private Securities Litigation Reform Act of1995 and the Federal securities laws. Although the company believes that theexpectations reflected in such forward-looking statements are based uponreasonable assumptions, it can give no assurance that its expectations will beachieved. Forward-looking information is subject to certain risks, trends anduncertainties that could cause actual results to differ materially from thoseprojected. Many of these factors are beyond the company's ability to control orpredict. Important factors that may cause actual results to differ materiallyand could impact the company and the statements contained in this news releasecan be found in the company's filings with the Securities and ExchangeCommission, including quarterly reports on Form 10-Q, current reports on Form8-K and annual reports on Form 10-K. For forward-looking statements in this newsrelease, the company claims the protection of the safe harbor forforward-looking statements contained in the Private Securities Litigation ReformAct of 1995. The company assumes no obligation to update or supplement anyforward-looking statements, whether as a result of new information, futureevents or otherwise.

                     IMCLONE SYSTEMS INCORPORATED

           Consolidated Condensed Statements of Operations

                             (Unaudited)

                (in thousands, except per share data)

                               Three Months Ended   Nine Months Ended

                                  September 30,       September 30,

                               ------------------- -------------------

                                 2006      2005      2006      2005

                               --------- --------- --------- ---------

Revenues:

Royalty revenue               $ 78,599  $ 46,647  $213,483  $124,810

License fees and milestone

  revenue                        34,948    27,146   212,807    76,171

Manufacturing revenue           20,884    10,748    68,589    29,661

Collaborative agreement

  revenue                        16,266    21,984    50,805    54,039

                               --------- --------- --------- ---------

       Total revenues           150,697   106,525   545,684   284,681

                               --------- --------- --------- ---------

Operating expenses:

Research and development        26,437    28,958    87,013    74,564

Clinical and regulatory         13,527    13,583    43,537    31,357

Marketing, general and

  administrative                 15,977    19,463    56,941    53,919

Royalty expense                 18,051    15,165    56,531    42,069

Cost of manufacturing revenue   19,187     3,099    61,466     4,948

Discontinuation of small

  molecule research program           -         -         -     6,200

                               --------- --------- --------- ---------

  Total operating expenses       93,179    80,268   305,488   213,057

                               --------- --------- --------- ---------

   Operating income              57,518    26,257   240,196    71,624

                               --------- --------- --------- ---------

Other income, net                (8,084)   (5,448)  (22,094)  (15,486)

                               --------- --------- --------- ---------

   Income before income taxes    65,602    31,705   262,290    87,110

   Provision for income taxes     8,286       754   (61,826)    1,308

                               --------- --------- --------- ---------

   Net income                  $ 57,316  $ 30,951  $324,116  $ 85,802

                               ========= ========= ========= =========

Income per common share:

   Basic                       $   0.68  $   0.37  $   3.86  $   1.03

                               ========= ========= ========= =========

   Diluted                     $   0.65  $   0.35  $   3.58  $   0.98

                               ========= ========= ========= =========

Shares used in calculation of

income per share:

   Basic                         84,335    83,785    84,013    83,561

                               ========= ========= ========= =========

   Diluted                       91,915    92,136    91,974    92,287

                               ========= ========= ========= =========

                     IMCLONE SYSTEMS INCORPORATED

                Consolidated Condensed Balance Sheets

                             (Unaudited)

                            (in thousands)

                                         September 30,   December 31,

                 Assets                      2006           2005

                                         -------------- --------------

Current assets:

Cash and cash equivalents               $      15,308  $       3,403

Securities available for sale                 976,172        752,973

Inventories                                    58,923         81,394

Other current assets                          136,657         71,348

                                         -------------- --------------

   Total current assets                      1,187,060        909,118

Property, plant and equipment, net             425,750        406,595

Other assets (includes $28.2 million of

inventories)                                  171,978         27,702

                                         -------------- --------------

   Total assets                          $   1,784,788  $   1,343,415

                                         ============== ==============

  Liabilities and Stockholders' Equity

Current liabilities                      $     237,304  $     242,119

Deferred revenue, long term                    271,255        246,401

Long-term obligations                          603,645        602,491

                                         -------------- --------------

   Total liabilities                         1,112,204      1,091,011

Stockholders' equity                           672,584        252,404

                                         -------------- --------------

   Total liabilities and stockholders'

    equity                               $   1,784,788  $   1,343,415

                                         ============== ==============

SOURCE: ImClone Systems Incorporated

CONTACT:          ImClone Systems IncorporatedInvestors:Andrea F. Rabney / Stefania Bethlen, 646-638-5058orMedia:David M. F. Pitts, 646-638-5058

Copyright Business Wire 2006

KEYWORD:          United States

                  North America

                  New York

INDUSTRY KEYWORD: Health

                  Biotechnology

                  Oncology

                  Pharmaceutical

                  Research & Science

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Then a patent case contesting the ownership of the key Erbitux patents was ruled against ImClone, and now it will have to pay royalties on sales of Erbitux and potentially millions of dollars worth of damages if the case holds up on appeals (which it should). Then, ten days later, institutional investor Carl Icahn made public his intentions to seize control of the company.

At least the financial side of things turned out a little better in third quarter. Revenues were up to $150 million for the quarter on the back of 69% growth of Erbitux royalties and diluted earnings per share were 86% higher year over year, to $0.65 a share.

The fourth quarter is notable because Icahn finally got his wish and convinced three directors to resign, thus giving him and his allies control of ImClone's board of directors. In a shareholder friendly maneuver, he and the rest of the board decided to waive all options grants for the next year, but I still think he is just taking over ImClone to give himself, as largest shareholder, a lucrative buyout via a dutch auction with ImClone's over $1 billion in cash.

Overall, 2006 has offered only mixed results for ImClone. It did well on the financial side of things by growing diluted earnings per share 265% in the first nine months of the year, and it is flush with cash. But it's how it utilizes that cash that determines how well shares of ImClone perform in 2007.

Here's how our Motley Fool CAPS community rates ImClone as a potential investment:

Total Bulls
42

Total Bear
26

Bull Ratio
1.6:1

Bear Ratio
.6:1


ImClone only garnered one star out five, despite having more outperform than underperform picks. This is thanks to the high ranking of the players who have given the thumbs down on it.

Rule Breakers analyst and CAPS all-star TMFBreakerCharly sums up his bearishness on ImClone thusly: "Too much going wrong here. Amgen's Vectibix just approved and going to be priced very aggressively to take market share from Erbitux. ImClone (is) also going to have to pay IP damages and future royalties which will further erode margins. On top of that, there's trouble in the board room."

In past years ImClone has had a revolving door at the upper management level, which definitely will not help the company as it goes through it toughest operational period (post-Erbitux approval). Now that its only marketed drug is facing a strong competitive challenge, the window for either selling itself or transforming into a more diversified biotech via acquisitions is rapidly closing.

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