10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2005
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from         to

Commission file number 0-19612

ImClone Systems Incorporated

(Exact name of registrant as specified in its charter)

Delaware	04-2834797
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
180 Varick Street, New York, NY	10014
(Address of principal executive offices)	(Zip Code)

(212) 645-1405

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x      No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x    No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of November 3, 2005
Common Stock, par value $.001	83,964,120 Shares

IMCLONE SYSTEMS INCORPORATED
INDEX

		Page
PART I—FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Unaudited Consolidated Balance Sheets—September 30, 2005 and December 31, 2004	1
	Unaudited Consolidated Statements of Operations—Three and Nine months ended September 30, 2005 and 2004	2
	Unaudited Consolidated Statement of Stockholders’ Equity and Comprehensive Income—Nine months ended September 30, 2005	3
	Unaudited Consolidated Statements of Cash Flows—Nine months ended September 30, 2005 and 2004	4
	Notes to Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	47
PART II—OTHER INFORMATION		48
Item 1.	Legal Proceedings	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults upon Senior Securities	53
Item 4.	Submission of Matters to a Vote of Security Holders	53
Item 5.	Other Information	53
Item 6.	Exhibits	54
Signatures		58

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PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements

IMCLONE SYSTEMS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share and share data)
(Unaudited)

	September 30, 2005				December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents		$	6,663			$	79,321
Securities available for sale		782,860				840,451
Prepaid expenses		5,848				4,054
Amounts due from corporate partners less allowances of $388 and $430 at September 30, 2005 and December 31, 2004, respectively		66,490				69,753
Inventories		73,240				40,618
Other current assets		6,601				28,240
Total current assets		941,702				1,062,437
Property, plant and equipment, net		395,618				339,293
Deferred financing costs, net		13,460				16,244
Other assets		15,427				16,802
Total assets		$	1,366,207			$	1,434,776
LIABILITES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable (including $3,669 and $2,535 due Bristol-Myers Squibb Company (“BMS”) at September 30, 2005 and December 31, 2004, respectively)		$	40,236			$	38,492
Accrued expenses (including $7,934 and $3,187 due BMS at September 30, 2005 and December 31, 2004, respectively)		50,654				61,177
Litigation settlement		-				75,900
Withholding tax liability		18,096				18,096
Current portion of deferred revenue		101,679				108,994
Other current liabilities		3,094				1,031
Total current liabilities		213,759				303,690
Deferred revenue, less current portion		278,415				348,814
Long-term debt		600,000				600,000
Deferred rent, less current portion		2,298				3,434
Total liabilities		1,094,472				1,255,938
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $1.00 par value; authorized 4,000,000 shares; reserved 1,200,000 series B participating cumulative preferred stock, none issued or outstanding		—				—
Common stock, $.001 par value; authorized 200,000,000 shares; issued 84,050,894 and 83,250,146 at September 30, 2005 and December 31, 2004, respectively; outstanding 83,857,636 and 83,056,888 at September 30, 2005 and December 31, 2004, respectively		84				83
Additional paid-in capital		726,914				712,819
Accumulated deficit		(443,153		)		(528,955		)
Treasury stock, at cost; 193,258 shares at September 30, 2005 and December 31, 2004		(4,300		)		(4,300		)
Accumulated other comprehensive loss:
Net unrealized loss on securities available for sale		(7,810		)		(809		)
Total stockholders’ equity		271,735				178,838
Total liabilities and stockholders’ equity		$	1,366,207			$	1,434,776

See accompanying notes to consolidated financial statements.

1

IMCLONE SYSTEMS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Revenues:
License fees and milestone revenue	$	27,146		$	22,958		$	76,171		$	108,604
Manufacturing revenue	10,748			29,952			29,661			70,252
Royalty revenue	46,647			34,137			124,810			69,742
Collaborative agreement revenue	21,984			10,414			54,039			32,795
Total revenues	106,525			97,461			284,681			281,393
Operating expenses:
Research and development	28,958			17,635			74,564			56,682
Clinical and regulatory	13,583			7,595			31,357			20,859
Marketing, general and administrative	19,463			14,816			53,919			40,021
Royalty expense	15,165			9,661			42,069			19,340
Cost of manufacturing revenue	3,099			223			4,948			559
Discontinuation of small molecule research program	—			—			6,200			—
Other	—			—			—			(1,815		)
Total operating expenses	80,268			49,930			213,057			135,646
Operating income	26,257			47,531			71,624			145,747
Other:
Interest income	(7,025		)	(5,169		)	(20,575		)	(8,076		)
Interest expense	1,577			1,962			5,073			6,476
(Gain) loss on sales of securities	—			(20		)	16			(131		)
Net other	(5,448		)	(3,227		)	(15,486		)	(1,731		)
Income before income taxes	31,705			50,758			87,110			147,478
Provision for income taxes	754			10,975			1,308			20,647
Net income	$	30,951		$	39,783		$	85,802		$	126,831
Income per common share:
Basic	$	0.37		$	0.48		$	1.03		$	1.62
Diluted	$	0.35		$	0.44		$	0.98		$	1.45
Shares used in calculation of income per share:
Basic	83,785			82,514			83,561			78,395
Diluted	92,136			94,630			92,287			91,434

See accompanying notes to consolidated financial statements.

2

IMCLONE SYSTEMS INCORPORATED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2005
(in thousands, except share data)
(Unaudited)

	Preferred Stock					Common Stock				Additional Paid-in			Accumulated				Treasury				Accumulated Other Comprehensive
	Shares		Amount			Shares	Amount			Capital			Deficit				Stock				Loss				Total
Balance at December 31, 2004		—		$	—	83,250,146		$	83		$	712,819		$	(528,955	)		$	(4,300	)		$	(809	)	$	178,838
Options exercised						773,881		1			13,360														13,361
Issuance of shares through employee stock purchase plan						26,867		—			735														735
Comprehensive income:
Net income														85,802											85,802
Other comprehensive loss:
Unrealized loss on marketable securities arising during the period																						(7,017		)	(7,017		)
Less: Reclassification adjustment for realized loss included in net income																						(16		)	(16		)
Total other comprehensive loss																						(7,001		)	(7,001		)
Comprehensive income																									78,801
Balance at September 30, 2005		—		$	—	84,050,894		$	84		$	726,914		$	(443,153	)		$	(4,300	)		$	(7,810	)	$	271,735

See accompanying notes to consolidated financial statements.

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IMCLONE SYSTEMS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)

	Nine Months Ended September 30,
	2005			2004
Cash flows from operating activities:
Net income	$	85,802		$	126,831
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	9,706			9,664
Amortization of deferred financing costs	2,784			2,181
Expense associated with stock options	—			4,165
Loss on disposal of fixed assets	3,880			—
Other	81			(1,815		)
Loss (gain) on securities available for sale, net	16			(131		)
Changes in:
Prepaid expenses	(1,794		)	(1,895		)
Amounts due from corporate partners	3,263			(50,211		)
Inventories	(32,622		)	(33,981		)
Other current assets	21,639			(1,577		)
Other assets	1,187			(1,699		)
Accounts payable	1,744			1,387
Accrued expenses	(10,523		)	14,110
Realized tax benefit from stock options	—			12,109
Litigation settlement	(75,900		)	—
Withholding tax liability	—			(1,076		)
Other current liabilities	2,063			(1,123		)
Deferred revenue	(77,714		)	141,455
Other liabilities	(1,136		)	374
Net cash (used in) provided by operating activities	(67,524		)	218,768
Cash flows from investing activities:
Acquisitions of property, plant and equipment	(69,804		)	(75,745		)
Purchases of securities available for sale	(425,044		)	(2,719,667		)
Sales of securities available for sale	408,601			744,125
Maturities of securities available for sale	67,017			1,251,473
				—
Other	—			(8		)
Net cash used in investing activities	(19,230		)	(799,822		)
Cash flows from financing activities:
Proceeds from exercise of stock options	13,361			70,817
Proceeds from issuance of common stock under the employee stock purchase plan	735			598
Proceeds from issuance of 13¤8% convertible notes	—			600,000
Deferred financing costs	—			(18,510		)
Proceeds from issuance of common stock to Merck KGaA	—			5,000
Other	—			(55		)
Net cash provided by financing activities	14,096			657,850
Net (decrease) increase in cash and cash equivalents	(72,658		)	76,796
Cash and cash equivalents at beginning of period	79,321			30,865
Cash and cash equivalents at end of period	$	6,663		$	107,661
Supplemental cash flow information:
Cash paid for:
Interest, net of amounts capitalized	$	226		$	5,444
Taxes	$	1,400		$	4,630
Non-cash investing and financing activity:
Change in net unrealized loss (gain) in marketable securities	$	7,017		$	(104	)
Options exercised in exchange for mature shares of common stock	$	—		$	200
Conversion of 51¤2% subordinated convertible notes into common stock	$	—		$	239,997
Reclassification of unamortized deferred financing costs on the 51¤2% subordinated convertible notes to equity	$	—		$	1,193

See accompanying notes to consolidated financial statements.

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IMCLONE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1)Business Overview and Basis of Presentation

The accompanying consolidated financial statements of ImClone Systems Incorporated (“ImClone Systems” or the “Company”) as of September 30, 2005 and for the three and nine months ended September 30, 2005 and 2004 are unaudited. The accompanying unaudited consolidated balance sheets, statements of operations, statement of stockholders’ equity and comprehensive income and statements of cash flows have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. The financial statements reflect all adjustments, consisting only of normal, recurring adjustments, which are in the opinion of management, necessary for a fair presentation for the interim periods. Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and related revenue and expense accounts and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with GAAP. Actual results could differ materially from those estimates. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as filed with the SEC.

The results of operations for the interim periods are not necessarily indicative of results to be expected for the entire fiscal year or any other period. Certain amounts previously reported have been reclassified to conform to the current year’s presentation. In the Consolidated Statement of Cash Flows, the Company has reclassified master notes and other investments of approximately $138.8 million as of September 30, 2004, from cash and cash equivalents to securities available for sale. In addition, the Company has reclassified Collaborative agreement revenue and Royalty expense in 2004 to reflect the reimbursed portion of royalties for agreements that were finalized in January of 2005.

The Company is a biopharmaceutical company whose mission is to advance oncology care by developing and commercializing a portfolio of targeted treatments designed to address the medical needs of patients with cancer. A substantial portion of the Company’s efforts and resources are devoted to research and development conducted on its own behalf and through collaborations with corporate partners and academic research and clinical institutions. The Company does not operate separate lines of business or separate business entities and does not conduct any of its operations outside of the United States. Accordingly, the Company does not prepare discrete financial information with respect to separate product areas or by location and does not have separately reportable segments.

On February 12, 2004, the United States Food and Drug Administration (“FDA”) approved ERBITUX® (Cetuximab) Injection for use in combination with irinotecan in the treatment of patients with EGFR-expressing, metastatic colorectal cancer who are refractory to irinotecan-based chemotherapy and for use as a single agent in the treatment of patients with EGFR-expressing, metastatic colorectal cancer who are intolerant to irinotecan-based chemotherapy. In September 2005, Health Canada approved the use of ERBITUX for use in combination with irinotecan for the treatment of EGFR-expressing metastatic colorectal carcinoma in patients who are refractory to other irinotecan-based chemotherapy regimens and for use as a single agent for the treatment of EGFR expressing, metastatic colorectal carcinoma in patients who are intolerant to irinotecan-based chemotherapy. In August 2005, the Company filed an sBLA to seek approval of ERBITUX for use as a single agent and in combination with radiation in Squamous Cell Carcinoma of the Head and Neck (SCCHN) with the FDA. In October 2005, the FDA notified the Company that it had accepted the sBLA for filing and had granted it priority review.

On December 1, 2003, Swissmedic, the Swiss agency for therapeutic products, approved ERBITUX in Switzerland for the treatment of patients with colorectal cancer who no longer respond to standard

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chemotherapy treatment with irinotecan. Merck KGaA licensed the right to market ERBITUX outside the United States and Canada from the Company in 1998. In Japan, Merck KGaA has marketing rights to ERBITUX, which are co-exclusive to the co-development rights of the Company and BMS. On June 30, 2004, Merck KGaA received marketing approval by the European Commission to sell ERBITUX for use in combination with irinotecan for the treatment of patients with EGFR-expressing metastatic colorectal cancer after failure of irinotecan including cytotoxic therapy. As of September 30, 2005, Merck KGaA has obtained approval for ERBITUX in 45 countries, with Ecuador, Guatemala, Panama, Philippines and Malaysia approving it during the third quarter of 2005.

Impact of Recent Accounting Pronouncements

On November 24, 2004 the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 151, Inventory Costs, an amendment of ARB No. 43. This Statement amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing”, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). The provisions of this Statement are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of this accounting pronouncement is not expected to have a material effect on the Company’s consolidated financial statements.

On December 16, 2004 the FASB issued Statement No. 123 (revised 2004), Share-Based Payment (“Statement 123R”). This Statement requires that the cost resulting from all share-based payment transactions be recognized in the financial statements and establishes fair value as the measurement objective in accounting for all share-based payment arrangements. On March 29, 2005, the SEC issued Staff Accounting Bulletin No. 107, Share-Based Payment, which summarizes the views of the staff regarding the interaction between Statement 123R and certain SEC rules and regulations and provides the staff’s views regarding the valuation of share-based payment arrangements for public companies. Statement 123R was originally effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. However, on April 14, 2005 the SEC announced a new rule that allows companies to implement Statement 123R at the beginning of their first fiscal year beginning after June 15, 2005. As such, the Company will adopt Statement 123R in the first quarter of 2006. The adoption of this Statement is expected to have a material effect on the Company’s consolidated financial statements.

Stock Based Compensation Plans

The Company has two types of stock-based compensation plans: stock option plans and a stock purchase plan. The Company accounts for its stock-based compensation plans in accordance with the provisions of APB Opinion No. 25, and related interpretations including Statement of Financial Accounting Standards Board Interpretation No. 44, “Accounting for Certain Transactions Involving Stock Compensation—An Interpretation of APB Opinion No. 25” (“Interpretation No. 44”). Accordingly, compensation expense would be recorded on the date of grant of an option to an employee or member of the Board of Directors (the “Board”) only if the market price of the underlying stock on the date of grant exceeds the exercise price. Historically, the Company’s stock option grants have been based on the closing market price of its stock on the date of grant.

6

The fair value of stock options was estimated using the Black-Scholes option-pricing model. The Black-Scholes model considers a number of variables, including the exercise price and the expected life of the option, the current price of the common stock, the expected volatility and the dividend yield of the underlying common stock, and the risk-free interest rate during the expected term of the option. The following table summarizes the weighted average assumptions used:

	Nine Months Ended September 30,
	2005		2004
Expected life (years).	4.47		4.50
Risk free interest rate	3.61	%	2.70	%
Expected volatility	82.97	%	86.00	%
Dividend yield	0.00	%	0.00	%

The following table illustrates the effect on net income and net income per common share if the compensation cost for the Company’s stock option grants had been determined based on the fair value at the grant dates for awards consistent with the fair value method of Statement of Financial Accounting Standards No. 123 “Accounting for Stock-Based Compensation” (“SFAS 123”): (in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Net income as reported	$	30,951		$	39,783		$	85,802		$	126,831
Add: Stock-based employee compensation expense included in net income, tax effected	—			43			—			1,500
Deduct: Total stock-based employee compensation expense determined under fair value based method, tax effected	(12,300		)	(10,721		)	(41,345		)	(34,200		)
Pro forma net income	$	18,651		$	29,105		$	44,457		$	94,131
Net income per common share:
Basic, as reported	$	0.37		$	0.48		$	1.03		$	1.62
Basic, pro forma	$	0.22		$	0.35		$	0.53		$	1.20
Diluted, as reported	$	0.35		$	0.44		$	0.98		$	1.45
Diluted, pro forma	$	0.22		$	0.33		$	0.52		$	1.10

For the three months ended September 30, 2005 and 2004, there were approximately 15,328,000 and 1,426,000, respectively, of potential common shares excluded from the pro forma diluted income per share computation and for the nine months ended September 30, 2005 and 2004, there were approximately 14,878,000 and 2,675,000, respectively, of potential common shares excluded from the pro forma diluted income per share computation because their inclusion would have had an anti-dilutive effect. The potential common shares excluded from the computation consist of anti-dilutive stock options for all periods and anti-dilutive shares related to the 13¤8% convertible notes for the three and nine months ended September 30, 2005. The pro forma effect on net income for the three and nine months ended September 30, 2005 and 2004 are not necessarily indicative of the pro forma effect on future periods’ operating results.

On September 16, 2005, the Board of Directors, upon recommendation of the Compensation Committee of the Board of Directors, approved guidelines governing option grants to be made during calendar year 2006 to the Chairman, Vice Chairman and other non-employee directors to purchase 30,000, 25,000 and 20,000 shares, respectively, of the Company’s common stock. These option grants are anticipated to be made in 2006 pursuant to an equity plan approved by the Company’s shareholders on

7

such dates and further terms and conditions as are approved by the Board of Directors at a later date. In addition, the Board of Directors determined that, beginning in 2006, any non-employee director newly joining the Board of Directors will be entitled to receive a one-time grant of stock options to purchase 20,000 shares of the Company’s common stock upon first becoming a member of the Board of Directors. Such option grants are anticipated to be made pursuant to an equity plan approved by the Company’s shareholders on such dates and further terms and conditions as are approved by the Board of Directors at a later date.

On September 19, 2005 the Company announced the approval by the Board of Directors of a stock repurchase program permitting the repurchase of up to$100 million in aggregate principal amount of outstanding shares of the Company’s common stock during a two year period. The stock repurchase program is to be employed for general corporate purposes, including to offset dilution resulting from future grants of stock options or other dilutive incentive compensation granted to the Company’s employees and directors. Stock repurchases under this program may be made through open market or privately negotiated transactions at such times and in such amounts as the Company deems appropriate, based on a variety of factors such as price, corporate and regulatory requirements and overall market conditions. The stock repurchase program may be limited or terminated at any time without prior notice.

On October 17, 2005, the Compensation Committee of the Board of Directors approved the adoption of a stock option plan for the sole purpose of making one-time grants of stock options to newly hired key employees who have not previously been employees or directors of the Company as an inducement to such persons entering into employment with the Company (the “Inducement Plan”), in accordance with NASDAQ Marketplace Rule 4350(i)(1)(A)(iv). The Inducement Plan permits the Company to issue up to a total of 600,000 “inducement” options to eligible participants to purchase shares of common stock of the Company on terms and conditions set forth therein and in individual award agreements under the Inducement Plan, in each case on terms commensurate with options granted under the Company’s 2002 Stock Option Plan.

Comprehensive Income

The following table reconciles net income to comprehensive income: (in thousands)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2005			2004		2005			2004
Net income	$	30,951		$	39,783	$	85,802		$	126,831
Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities during the period	(3,829		)	903		(7,017		)	104
Less: Reclassification adjustment for realized gain (loss) included in net income	—			20		(16		)	131
Total other comprehensive income (loss)	(3,829		)	883		(7,001		)	(27		)
Total comprehensive income	$	27,122		$	40,666	$	78,801		$	126,804

The tax benefit (expense) on the items included in Other comprehensive income (loss) assuming they were recognized in income would be approximately $38,000 and ($87,000) for the three months ended September 30, 2005 and 2004, respectively, and $70,000 and $4,000 for the nine months ended September 30, 2005 and 2004, respectively.

Fair Value of Financial Instruments

The fair value of the Company’s 1 3/8% convertible senior notes of $600,000,000 was approximately $500,250,000 at September 30, 2005.

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(2)Inventories

Inventories are stated at the lower of cost, determined on the first-in-first-out method, or market. Inventories consist of the following: (in thousands)

	September 30, 2005			December 31, 2004
Raw materials and supplies		$	17,810		$	9,536
Work in process.		52,057			30,082
Finished goods		3,373			1,000
Total		$	73,240		$	40,618

Prior to receipt of approval of ERBITUX for commercial sale on February 12, 2004, the Company had expensed all costs associated with the production of ERBITUX to research and development expense. Effective February 13, 2004, the Company began to capitalize the cost of manufacturing ERBITUX as inventories, including the cost to label, package, fill and ship previously manufactured bulk inventory whose costs had already been expensed as research and development. Although it is the Company’s policy to state inventories reflecting full absorption costs, until the Company sells all of its existing inventories for which all or a portion of the costs were previously expensed, inventories will reflect costs incurred to process into finished goods previously expensed raw materials and work in process, as well as costs to manufacture inventory subsequent to February 12, 2004. As the Company continues to process the inventory that was partially produced and expensed prior to February 13, 2004, the Company will continue to reflect in inventory only those incremental costs incurred to complete such inventory into finished goods.

(3)Property, Plant and Equipment

Property, plant and equipment are recorded at cost and consist of the following: (in thousands)

	September 30, 2005				December 31, 2004
Land		$	4,899			$	4,899
Building		67,323				67,083
Leasehold improvements		13,931				15,518
Machinery and equipment		58,756				55,430
Furniture and fixtures.		4,556				4,265
Construction in progress.		308,388				248,736
Total cost.		457,853				395,931
Less accumulated depreciation and amortization		(62,235		)		(56,638		)
Property, plant and equipment, net.		$	395,618			$	339,293

The Company is building a multiple product manufacturing facility (“BB50”) in Branchburg, New Jersey with capacity of up to 110,000 liters (production volume). Management estimates that the 250,000 square foot facility will cost approximately $290,000,000. The actual cost of the new facility may change depending upon various factors. The Company has incurred approximately $279,341,000 in conceptual design, engineering, pre-construction, construction and start up costs (which are included in construction in progress in the preceding table), excluding capitalized interest of approximately $18,647,000, through September 30, 2005. As of September 30, 2005, committed purchase orders totaling approximately $187,592,000 have been placed with subcontractors for equipment related to this project and $72,744,000 for engineering, procurement, construction management and validation costs. Through September 30, 2005, $250,810,000 has been paid relating to these committed purchase orders. All outstanding committed purchase orders as of September 30, 2005 require payment in 2005.

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The process of preparing consolidated financial statements in accordance with U.S. generally accepted accounting principles requires the Company to evaluate the carrying values of its long-lived assets. The recoverability of the carrying values of long-lived assets depends on the Company’s ability to earn sufficient returns on ERBITUX. Based on management’s current estimates, the Company expects to recover the carrying value of such assets.

(4)Contract Services

On March 17, 2005, the Company entered into a five year multi-product supply agreement (the “Agreement”) with Lonza Biologics PLC (“Lonza”) for the manufacture of biological material at the 5,000 liter scale. The Company has discretion over which products to manufacture, which may include later-stage clinical production of the Company’s antibodies currently in Phase I clinical testing and those nearing Phase I testing. The notional value of producing all batches allocated under the Agreement is approximately $68 million, unless terminated earlier. The Agreement provides that the Company can cancel any batches at any time; however, depending on how much notice the Company provides Lonza, the Company could incur a cancellation fee that varies based on timing of the cancellation. This cancellation fee is only applicable if Lonza does not resell the slots reserved for the cancelled batches.

(5)Withholding Tax Assets and Liability

Federal and applicable state tax law requires an employer to withhold income taxes at the time of an employee’s exercise of non-qualified stock options or warrants issued in connection with the performance of services by the employee. An employer that does not do so is liable for the taxes not withheld if the employee fails to pay his or her taxes for the year in which the non-qualified stock options or warrants are exercised. In 2000 and prior years, the Company generally did not require the withholding of federal, state or local income taxes and, in certain years, employment payroll taxes at the time of the exercise of non-qualified stock options or warrants. Prior to 1996, the Company did not comply with tax reporting requirements with respect to the exercise of non-qualified stock options or warrants.

In January 2003, the New York State Department of Taxation and Finance (“New York State”) notified the Company that it was liable for the New York State and City income taxes that were not withheld because one or more of the Company’s employees who exercised certain non-qualified stock options in 1999 and 2000 failed to pay New York State and City income taxes for those years. On March 13, 2003, the Company entered into a closing agreement with New York State, paying $4,500,000 by March 31, 2003, to settle the matter. On June 17, 2003, New York State notified the Company that based on the warrant issue identified below, it was continuing a previously conducted audit of the Company and was evaluating the terms of the closing agreement to determine whether or not it should be re-opened. On March 31, 2004, the Company entered into a new closing agreement pursuant to which the Company paid New York State an additional $1,000,000 in full satisfaction of all the deficiencies and determinations of withholding taxes for the years 1999-2001. The Company had an estimated liability related to this contingency of $2,815,000 as of December 31, 2003. Therefore the Company has eliminated such liability and has recognized a benefit of $1,815,000 as a recovery in the Consolidated Statements of Operations in the first quarter of 2004.

On March 13, 2003, the Company initiated discussions with the Internal Revenue Service (the “IRS”) relating to federal income taxes on the exercise of non-qualified stock options on which income tax was not properly withheld. Although the IRS has not yet asserted that the Company is required to make a payment with respect to such failure to withhold, the IRS may assert that such a liability exists, and may further assert that the Company is liable for interest and penalties. The Company has determined that all but an insignificant amount of the potential liability for withholding taxes with respect to exercises of non-qualified stock options in 1999 and 2000 is attributable to those amounts related to Dr. Samuel D. Waksal, the Company’s former Chief Executive Officer. In addition, in the course of the Company’s investigation

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into its potential liability in respect of the non-qualified stock options described above, the Company identified certain warrants that were granted in 1991 and prior years to then current and former officers, directors and advisors that the Company previously treated as non-compensatory warrants and thus not subject to tax withholding and information reporting requirements upon exercise. Accordingly, when exercised in 2001 and prior years, the Company did not deduct income and payroll taxes upon exercise or report applicable information to the taxing authorities. The Company now believes that such treatment was incorrect, and that the exercise of such warrants by current and former officers of the Company should have been treated in the same manner for withholding and reporting purposes as the exercise of non-qualified stock options. The Company has informed the relevant authorities, including the IRS, of this matter and intends to resolve its liability, in conjunction with its resolution of the matter described above.

The Company has recognized assets at the time of exercise relating to certain individuals. These assets are based on the fact that individuals are required by law to pay their personal income taxes, which relieves the Company of its liability for such withholding taxes, but not interest and penalties, as well as the Company’s determination that these individuals had the means and intention to satisfy their tax liabilities, and legal claims the Company has against these individuals both during and after their employment with the Company. As of September 30, 2005 and December 31, 2004 the Company has recorded $274,000 of withholding tax assets in its Consolidated Balance Sheets.

One former officer and director to whom warrants were issued and previously treated as non-compensatory warrants was the Company’s former Chief Executive Officer, Dr. Samuel D. Waksal. The Company has made demands on Dr. Samuel D. Waksal to pay the taxes associated with the exercise of these warrants and certain non-qualified stock options and to indemnify the Company against any liability that it may incur to taxing authorities in respect of the warrants or non-qualified stock options that were previously exercised. The Company determined that subsequent to the Company’s receipt of a “refusal to file” letter from the FDA on December 28, 2001, with respect to its rolling Biologics License Application for ERBITUX, Dr. Samuel D. Waksal’s financial condition deteriorated and therefore the recoverability of the asset became doubtful. The Company has recorded $18,096,000 of withholding tax liability related to exercise of stock options and warrants and fringe benefits in its Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004.

(6)Income Per Common Share

Basic income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period increased to include all additional common shares that would have been outstanding assuming potentially dilutive common shares had been issued 1) on the exercise of stock options and any proceeds thereof used to repurchase common stock at the average market price during the period and 2) on conversion of convertible debt. In addition, in computing the dilutive effect of convertible debt, the numerator is adjusted to add back the after-tax amount of interest recognized in the period. The number of diluted common shares for the three and nine months ended September 30, 2004 has been adjusted to conform to EITF Issue No. 04-8 “The Effect of Contingently Convertible Debt on Diluted Earnings per Share”. Such adjustment has reduced the previously reported diluted income per share by $0.01 and $0.02 per share for the three and nine months ended September 30, 2004, respectively. There were approximately 8,851,000 and 723,000 of potential common shares excluded from the diluted income per share computation for the three months ended September 30, 2005 and 2004, respectively, because their inclusion would have had an anti-dilutive effect. There were approximately 8,112,000 and 1,644,000, respectively, of potential common shares excluded from the diluted income per share computation for the nine months ended September 30, 2005 and 2004, respectively , because their inclusion would have had an anti-dilutive effect.

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Basic and diluted income per common share (EPS) were computed using the following: (in thousands, except per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2005		2004		2005		2004
EPS Numerator—Basic:
Net income	$	30,951	$	39,783	$	85,802	$	126,831
EPS Denominator—Basic:
Weighted-average number of shares of common stock outstanding	83,785		82,514		83,561		78,395
EPS Numerator—Diluted:
Net income	$	30,951	$	39,783	$	85,802	$	126,831
Adjustment for interest, net of amounts capitalized and income tax effect	1,536		1,506		4,997		5,569
Net income, adjusted	$	32,487	$	41,289	$	90,799	$	132,400
EPS Denominator—Diluted:
Weighted-average number of shares of common stock outstanding	83,785		82,514		83,561		78,395
Effect of dilutive securities:
Stock options	2,015		5,780		2,390		7,013
Convertible subordinated notes	6,336		6,336		6,336		6,026
Dilutive potential common shares	8,351		12,116		8,726		13,039
Weighted-average common shares and dilutive potential common shares	92,136		94,630		92,287		91,434
Basic income per share	$	0.37	$	0.48	$	1.03	$	1.62
Diluted income per share	$	0.35	$	0.44	$	0.98	$	1.45

(7)Taxes

The Company’s estimated effective income tax rate for 2005 (assuming no milestone is earned from Bristol-Myers Squibb) is approximately 1.0% excluding the effect of the adjustment resulting from the reconciliation of the prior years’ tax provision to its recently filed tax returns. The estimated effective tax rate for the three months ended September 30, 2005 and for the full year, including the adjustment of approximately $440,000 is approximately 2.4% and 1.5%, respectively,  which is less than the federal statutory rate of 35%. The difference from the statutory rate results from the utilization of fully reserved deferred tax assets, primarily the amortization of deferred revenue associated with license fees and milestones, which were taxable in prior periods. As of September 30, 2005, the Company has provided a valuation allowance against its net deferred tax assets because, more likely than not, its net deferred tax assets will not be realized.

(8)Collaborative Agreements

(A)          Merck KGaA

In April 1990, the Company entered into a development and commercialization agreement with Merck KGaA with respect to BEC2 and the recombinant gp75 antigen product candidate. The agreement has been amended a number of times, most recently in December 1997. The agreement grants Merck KGaA a license, with the right to sublicense, to make, have made, use, sell, or have sold BEC2 and gp75 antigen outside North America. The agreement also grants Merck KGaA a license, without the right to sublicense, to use, sell, or have sold, but not to make BEC2 within North America in conjunction with the

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Company. Pursuant to the terms of the agreement the Company has retained the rights, (1) without the right to sublicense, to make, have made, use, sell, or have sold BEC2 in North America in conjunction with Merck KGaA and (2) with the right to sublicense, to make, have made, use, sell, or have sold gp75 antigen in North America. In return, the Company has recognized research support payments totaling $4,700,000 and is not entitled to any further research support payments under the agreement. Merck KGaA is also required to make payments of up to $22,500,000, of which $5,000,000 has been received through September 30, 2005, based on milestones achieved in the licensed products’ development.  The Company does not anticipate any additional milestone payments regarding BEC2. Merck KGaA is also responsible for worldwide costs of up to DM17,000,000 associated with a multi-site, multinational Phase III clinical trial for BEC2 in limited disease small-cell lung carcinoma. This expense level was reached during the fourth quarter of 2000 and all expenses incurred from that point forward are being shared 60% by Merck KGaA and 40% by the Company. The Company incurred no expenses and approximately $156,000 in the three months ended September 30, 2005 and 2004, respectively, and $19,000 and $285,000 for the nine months ended September 30, 2005 and 2004, respectively, associated with this agreement. On June 7, 2004, the Company and Merck KGaA announced that the international, randomized Phase III clinical trial of the Companies’ BEC2 cancer vaccine did not meet its primary endpoint of survival. Following the analysis of the Phase III data in small cell lung cancer, the Company and Merck KGaA agreed to discontinue further development of BEC2.

In December 1998, the Company entered into a development and license agreement with Merck KGaA with respect to ERBITUX. In exchange for granting Merck KGaA exclusive rights to market ERBITUX outside of the United States and Canada and co-exclusive development rights in Japan, the Company has received $30,000,000 through September 30, 2005 in up-front cash fees and early cash payments based on the achievement of defined milestones. An additional $30,000,000 has been received through September 30, 2005 based upon the achievement of further milestones for which Merck KGaA received equity in the Company. The equity interests underlying the milestone payments were priced at varying premiums to the then-market price of the common stock depending upon the timing of the achievement of the respective milestones.

Merck KGaA pays the Company a royalty on sales of ERBITUX outside of the United States and Canada. In August 2001, the Company and Merck KGaA amended this agreement to provide, among other things, that Merck KGaA may manufacture ERBITUX for supply in its territory and may utilize a third party to do so upon the Company’s reasonable acceptance. The amendment further released Merck KGaA from its obligations under the agreement relating to providing a guaranty under a $30,000,000 credit facility relating to the build-out of BB36. In addition, the amendment provides that the companies have co-exclusive rights to ERBITUX in Japan, including the right to sublicense and Merck KGaA waived its right of first offer in the case of a proposed sublicense by the Company of ERBITUX in the Company’s territory. In consideration for the amendment, the Company agreed to a reduction in royalties payable by Merck KGaA on sales of ERBITUX in Merck KGaA’s territory.

In September 2002, the Company entered into a binding term sheet, effective as of April 15, 2002, for the supply of ERBITUX to Merck KGaA, which replaces previous supply arrangements. The term sheet provides for Merck KGaA to purchase bulk and finished ERBITUX ordered from the Company during the term of the December 1998 development and license agreement at a price equal to the Company’s fully loaded cost of goods. The term sheet also provided for Merck KGaA to use reasonable efforts to enter into its own contract manufacturing agreements for supply of ERBITUX and obligates Merck KGaA to reimburse the Company for costs associated with transferring technology and any other services requested by Merck KGaA relating to establishing its own manufacturing or contract manufacturing capacity. Amounts due from Merck KGaA related to these arrangements totaled approximately $20,178,000 and $8,096,000 at September 30, 2005 and December 31, 2004, respectively, and are included in amounts due from corporate partners in the Consolidated Balance Sheets. The Company recorded collaborative

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agreement revenue related to these arrangements in the Consolidated Statements of Operations totaling approximately $11,194,000 and $883,000 for the three months ended September 30, 2005 and 2004, respectively, and $22,136,000 and $4,651,000 for the nine months ended September 30, 2005 and 2004, respectively. Of these amounts, $10,548,000 and $92,000 for the three months ended September 30, 2005 and 2004, respectively, and $19,045,000 and $2,261,000 for the nine months ended September 30, 2005 and 2004, respectively, related to reimbursable costs associated with supplying ERBITUX to Merck KGaA for use in clinical trials. The related manufacturing costs in 2004 and a portion in 2005 of the ERBITUX sold to Merck KGaA was produced and expensed prior to February 13, 2004 when the related raw materials were purchased and the associated direct labor and overhead was consumed since the Company did not have approval to sell ERBITUX. Reimbursable clinical and regulatory expenses  totaled approximately $0 and $328,000 for the three months ended September 30, 2005 and 2004, respectively, and $928,000 and $1,142,000 for the nine months ended September 30, 2005 and 2004, respectively. These amounts have been recorded as clinical and regulatory expenses, and also as collaborative agreement revenue in the Consolidated Statements of Operations. In the three months ended September 30, 2005, the Company issued a credit memo in the amount of $130,000 to Merck KGaA which has been recorded as a reduction to collaborative agreement revenue. Reimbursable general and administrative expenses and royalty expenses were incurred and totaled approximately $776,000 and $463,000 for the three months ended September 30, 2005 and 2004, respectively, and $2,163,000 and $1,248,000 for the nine months ended September 30, 2005 and 2004, respectively. These amounts have been recorded as marketing, general and administrative expenses, royalty expense, and also as collaborative agreement revenue in the Consolidated Statements of Operations. The Company has a liability due Merck KGaA of approximately $1,909,000, and $2,059,000 as of September 30, 2005 and December 31, 2004, respectively.

(B)          Bristol-Myers Squibb Company

On September 19, 2001, the Company entered into an acquisition agreement (the “Acquisition Agreement”) with BMS and Bristol-Myers Squibb Biologics Company, a Delaware corporation (“BMS Biologics”), which is a wholly-owned subsidiary of BMS, providing for the tender offer by BMS Biologics to purchase up to 14,392,003 shares of the Company’s common stock for $70.00 per share, net to the seller in cash. In connection with the Acquisition Agreement, the Company entered into a stockholder agreement with BMS and BMS Biologics, dated as of September 19, 2001 (the “Stockholder Agreement”), pursuant to which all parties agreed to various arrangements regarding the respective rights and obligations of each party with respect to, among other things, the ownership of shares of the Company’s common stock by BMS and BMS Biologics. Concurrent with the execution of the Acquisition Agreement and the Stockholder Agreement, the Company entered into the Commercial Agreement with BMS and E.R. Squibb, relating to ERBITUX, pursuant to which, among other things, BMS and E.R. Squibb are co-developing and co-promoting ERBITUX in the United States and Canada with the Company, and are co-developing and co-promoting ERBITUX in Japan with the Company and either together or co-exclusively with Merck KGaA.

On March 5, 2002, the Company amended the Commercial Agreement with E.R. Squibb and BMS. The amendment changed certain economics of the Commercial Agreement and expanded the clinical and strategic roles of BMS in the ERBITUX development program. One of the principal economic changes to the Commercial Agreement is that the Company received payments of $140,000,000 on March 7, 2002 and $60,000,000 on March 5, 2003. Such payments are in lieu of the $300,000,000 milestone payment the Company would have received upon acceptance by the FDA of the ERBITUX BLA under the original terms of the Commercial Agreement. In addition, the Company agreed to resume and has resumed construction of BB50. The terms of the Commercial Agreement, as amended on March 5, 2002, are set forth in more detail below.

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Commercial Agreement

Rights Granted to E.R. Squibb—Pursuant to the Commercial Agreement, as amended on March 5, 2002, the Company granted to E.R. Squibb (1) the exclusive right to distribute, and the co-exclusive right to develop and promote (together with the Company) any prescription pharmaceutical product using the compound ERBITUX (the “product”) in the United States and Canada, (2) the co-exclusive right to develop, distribute and promote (together with the Company and together or co-exclusively with Merck KGaA and its affiliates) the product in Japan, and (3) the non-exclusive right to use the Company’s registered trademarks for the product in the United States, Canada and Japan (collectively, the “territory”) in connection with the foregoing. In addition, the Company agreed not to grant any right or license to any third party, or otherwise permit any third party, to develop ERBITUX for animal health or any other application outside the human health field without the prior consent of E.R. Squibb (which consent may not be unreasonably withheld).

Rights Granted to the Company—Pursuant to the Commercial Agreement, E.R. Squibb has granted to the Company and the Company’s affiliates a license, without the right to grant sublicenses (other than to Merck KGaA and its affiliates for use in Japan and to any third party for use outside the territory), to use solely for the purpose of developing, using, manufacturing, promoting, distributing and selling ERBITUX or the product, any process, know-how or other invention developed solely by E.R. Squibb or BMS that has general utility in connection with other products or compounds in addition to ERBITUX or the product (“E.R. Squibb Inventions”).

Up-Front and Milestone Payments—The Commercial Agreement provides for up-front and milestone payments by E.R. Squibb to us of $900,000,000 in the aggregate, of which $200,000,000 was paid on September 19, 2001, $140,000,000 was paid on March 7, 2002, $60,000,000 was paid on March 5, 2003, and $250,000,000 was paid on March 12, 2004. An additional $250,000,000 would become payable upon receipt of marketing approval from the FDA with respect to a second tumor type for ERBITUX. All such payments are non-refundable and non-creditable.

Distribution Fees—The Commercial Agreement provides that E.R. Squibb shall pay the Company distribution fees based on a percentage of “annual net sales” of the product (as defined in the Commercial Agreement) by E.R. Squibb in the United States and Canada. The distribution fee is 39% of net sales in the United States and Canada.

The Commercial Agreement also provides that the distribution fees for the sale of the product in Japan by E.R. Squibb or ImClone Systems shall be equal to 50% of operating profit or loss with respect to such sales for any calendar month. In the event of an operating profit, E.R. Squibb shall pay the Company the amount of such distribution fee, and in the event of an operating loss, the Company shall credit E.R. Squibb the amount of such distribution fee.

Development of the Product—Responsibilities associated with clinical and other ongoing studies are apportioned between the parties as determined by the product development committee described below. The Commercial Agreement provides for the establishment of clinical development plans setting forth the activities to be undertaken by the parties for the purpose of obtaining marketing approvals, providing market support and developing new indications and formulations of the product. After transition of responsibilities for certain clinical and other studies, each party is primarily responsible for performing the studies designated to it in the clinical development plans. In the United States and Canada, the Commercial Agreement provides that E.R. Squibb is responsible for 100% of the cost of all clinical studies other than those studies undertaken post-launch which are not pursuant to an IND (e.g. Phase IV studies), the cost of which is shared equally between E.R. Squibb and ImClone Systems. As between E.R. Squibb and ImClone Systems, each is responsible for 50% of the costs of all studies in Japan. The Company has also agreed, and may agree in the future, to share with E.R. Squibb, on terms other than the foregoing, costs of clinical trials that the Company believes are not potentially registrational but should be undertaken

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prior to launch in the United States, Canada or Japan. The Company has incurred $4,789,000 and $1,237,000 pursuant to such cost sharing for the three months ended September 30, 2005 and 2004, respectively, and $10,077,000 and $5,958,000 for the nine months ended September 30, 2005 and 2004, respectively. In addition, to the extent that in 2005 and 2006 the Company and BMS exceed the contractual maximum registrational costs for clinical development, the Company has agreed to share such cost with BMS. For the three and nine months ended September 30, 2005, the Company has recorded approximately $1.8 million related to this commitment.  The Company has also incurred $293,000 and $153,000 for the three months ended September 30, 2005 and 2004, respectively, and $958,000 and $595,000 for the nine months ended September 30, 2005 and 2004, respectively, related to the agreement with respect to development in Japan. Except as otherwise agreed upon by the parties, the Company will own all registrations for the product and is primarily responsible for the regulatory activities leading to registration in each country. E.R. Squibb will be primarily responsible for the regulatory activities in each country after the product has been registered in that country. Pursuant to the terms of the Commercial Agreement, as amended, Andrew G. Bodnar, M.D., J.D., Senior Vice President, Strategy and Medical & External Affairs of BMS, and a member of the Company’s Board of Directors, is entitled to oversee the implementation of the clinical and regulatory plan for ERBITUX.

Distribution and Promotion of the Product—Pursuant to the Commercial Agreement, E.R. Squibb has agreed to use all commercially reasonable efforts to launch, promote and sell the product in the territory with the objective of maximizing the sales potential of the product and promoting the therapeutic profile and benefits of the product in the most commercially beneficial manner. In connection with its responsibilities for distribution, marketing and sales of the product in the territory, E.R. Squibb is performing all relevant functions, including but not limited to the provision of sales force personnel, marketing, warehousing and physical distribution of the product.

However, the Company has the right, at its election and sole expense, to co-promote with E.R. Squibb the product in the territory. Pursuant to this co-promotion option, which the Company has exercised, the Company is entitled on and after April 11, 2002 (at the Company’s sole expense) to have the Company’s field organization participate in the promotion of the product consistent with the marketing plan agreed upon by the parties, provided that E.R. Squibb retains the exclusive rights to sell and distribute the product. Except for the Company’s expenses incurred pursuant to the co-promotion option, E.R. Squibb is responsible for 100% of the distribution, sales and marketing costs in the United States and Canada, and as between E.R. Squibb and ImClone Systems, each is responsible for 50% of the distribution, sales, marketing costs and other related costs and expenses in Japan. During the third quarter of 2004, the Company established a sales force to maximize the potential commercial opportunities for ERBITUX and to serve as a foundation for the marketing of future products derived either from within the Company’s pipeline or through business development opportunities.

Manufacture and Supply—The Commercial Agreement provides that the Company is responsible for the manufacture and supply of all requirements of ERBITUX in bulk form (“API”) for clinical and commercial use in the territory, and that E.R. Squibb will purchase all of its requirements of API for commercial use from the Company. The Company supplies API for clinical use at the Company’s fully burdened manufacturing cost, and supplies API for commercial use at the Company’s fully burdened manufacturing cost plus a mark-up of 10%. Upon the expiration, termination or assignment of any existing agreements between ImClone Systems and third party manufacturers, E.R. Squibb will be responsible for processing API into the finished form of the product. Sales of ERBITUX to BMS for commercial use are reflected in the Company’s Consolidated Statements of Operations as Manufacturing revenue.

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Management—The parties have formed the following committees for purposes of managing their relationship and their respective rights and obligations under the Commercial Agreement:

·a Joint Executive Committee (the “JEC”), which consists of certain senior officers of each party. The JEC is co-chaired by a representative of each of BMS and the Company. The JEC is responsible for, among other things, managing and overseeing the development and commercialization of ERBITUX pursuant to the terms of the Commercial Agreement, approving the annual budgets and multi-year expense forecasts, and resolving disputes, disagreements and deadlocks arising in the other committees;

·a Product Development Committee (the “PDC”), which consists of members of senior management of each party with expertise in pharmaceutical drug development and/or marketing. The PDC is chaired by the Company’s representative. The PDC is responsible for, among other things, managing and overseeing the development and implementation of the clinical development plans, comparing actual versus budgeted clinical development and regulatory expenses, and reviewing the progress of the registrational studies;

·a Joint Commercialization Committee (the “JCC”), which consists of members of senior management of each party with clinical experience and expertise in marketing and sales. The JCC is chaired by a representative of BMS. The JCC is responsible for, among other things, overseeing the preparation and implementation of the marketing plans, coordinating the sales efforts of E.R. Squibb and the Company, and reviewing and approving the marketing and promotional plans for the product in the territory; and

·a Joint Manufacturing Committee (the “JMC”), which consists of members of senior management of each party with expertise in manufacturing. The JMC is chaired by the Company’s representative (unless a determination is made that a long-term inability to supply API exists, in which case the JMC will be co-chaired by representatives of E.R. Squibb and the Company). The JMC is responsible for, among other things, overseeing and coordinating the manufacturing and supply of API and the product, and formulating and directing the manufacturing strategy for the product.

Any matter that is the subject of a deadlock (i.e., no consensus decision) in the PDC, the JCC or the JMC will be referred to the JEC for resolution. Subject to certain exceptions, deadlocks in the JEC will be resolved as follows: (1) if the matter was also the subject of a deadlock in the PDC, by the co-chairperson of the JEC designated by the Company, (2) if the matter was also the subject of a deadlock in the JCC, by the co-chairperson of the JEC designated by BMS, or (3) if the matter was also the subject of a deadlock in the JMC, by the co-chairperson of the JEC designated by the Company. All other deadlocks in the JEC will be resolved by arbitration.

Right of First Offer—E.R. Squibb has a right of first offer with respect to the Company’s investigational KDR monoclonal antibodies (such as 1121B) should the Company decide to enter into a partnering arrangement with a third party with respect to IMC-KDR antibodies at any time prior to the earlier to occur of September 19, 2006 and the first anniversary of the date which is 45 days after any date on which BMS’s ownership interest in ImClone Systems is less than 5%. If the Company decides to enter into a partnering arrangement during such period, the Company must notify E.R. Squibb. If E.R. Squibb notifies the Company that it is interested in such an arrangement, the Company will provide its proposed terms to E.R. Squibb and the parties will negotiate in good faith for 90 days to attempt to agree on the terms and conditions of such an arrangement. If the parties do not reach agreement during this period, E.R. Squibb must propose the terms of an arrangement which it is willing to enter into, and if the Company rejects such terms the Company may enter into an agreement with a third party with respect to such a partnering arrangement (provided that the terms of any such agreement may not be more favorable to the third party than the terms proposed by E.R. Squibb).

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Right of First Negotiation—If at any time during the restricted period (as defined below), the Company is interested in establishing a partnering relationship with a third party involving certain compounds or products not related to IMC-KDR antibodies, the Company must notify E.R. Squibb and E.R. Squibb will have 90 days to enter into a non-binding agreement with the Company with respect to such a partnering relationship. In the event that E.R. Squibb and ImClone Systems do not enter into a non-binding agreement, the Company is free to negotiate with third parties without further obligation to E.R. Squibb. The “restricted period” means the period from September 19, 2001 until the earliest to occur of (1) September 19, 2006, (2) a reduction in BMS’s ownership interest in ImClone Systems to below 5% for 45 consecutive days, (3) a transfer or other disposition of shares of the Company’s common stock by BMS or any of its affiliates such that BMS and its affiliates own or have control over less than 75% of the maximum number of shares of the Company’s common stock owned by BMS and its affiliates at any time after September 19, 2001, (4) an acquisition by a third party of more than 35% of the outstanding shares, (5) a termination of the Commercial Agreement by BMS due to significant regulatory or safety concerns regarding ERBITUX, or (6) the Company’s termination of the Commercial Agreement due to a material breach by BMS.

Restriction on Competing Products—During the period from the date of the Commercial Agreement until September 19, 2008, the parties have agreed not to, directly or indirectly, develop or commercialize a competing product (defined as a product that has as its only mechanism of action an antagonism of the EGF receptor) in any country in the territory. In the event that any party proposes to commercialize a competing product or purchases or otherwise takes control of a third party which has developed or commercialized a competing product, then such party must either divest the competing product within 12 months or offer the other party the right to participate in the commercialization and development of the competing product on a 50/50 basis (provided that if the parties cannot reach agreement with respect to such an agreement, the competing product must be divested within 12 months).

Ownership—The Commercial Agreement provides that the Company owns all data and information concerning ERBITUX and the product and (except for the E.R. Squibb Inventions) all processes, know-how and other inventions relating to the product and developed by either party or jointly by the parties. E.R. Squibb, however, has the right to use all such data and information, and all such processes, know-how or other inventions, in order to fulfill its obligations under the Commercial Agreement.

Product Recalls—If E.R. Squibb is required by any regulatory authority to recall the product in any country in the territory (or if the JCC determines such a recall to be appropriate), then E.R. Squibb and ImClone Systems shall bear the costs and expenses associated with such a recall (1) in the United States and Canada, in the proportion of 39% for ImClone Systems and 61% for E.R. Squibb and (2) in Japan, in the proportion for which each party is entitled to receive operating profit or loss (unless, in the territory, the predominant cause for such a recall is the fault of either party, in which case all such costs and expenses shall be borne by such party).

Mandatory Transfer—Each of BMS and E.R. Squibb has agreed under the Commercial Agreement that in the event it sells or otherwise transfers all or substantially all of its pharmaceutical business or pharmaceutical oncology business, it must also transfer to the transferee its rights and obligations under the Commercial Agreement.

Indemnification—Pursuant to the Commercial Agreement, each party has agreed to indemnify the other for (1) its negligence, recklessness or wrongful intentional acts or omissions, (2) its failure to perform certain of its obligations under the agreement, and (3) any breach of its representations and warranties under the agreement.

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Termination—Unless earlier terminated pursuant to the termination rights discussed below, the Commercial Agreement expires with regard to the product in each country in the territory on the later of September 19, 2018 and the date on which the sale of the product ceases to be covered by a validly issued or pending patent in such country. The Commercial Agreement may also be terminated prior to such expiration as follows:

·by either party, in the event that the other party materially breaches any of its material obligations under the Commercial Agreement and has not cured such breach within 60 days after notice;

·by E.R. Squibb, if the JEC determines that there exists a significant concern regarding a regulatory or patient safety issue that would seriously impact the long-term viability of all products.

Acquisition Agreement

On October 29, 2001, pursuant to the Acquisition Agreement, BMS Biologics accepted for payment pursuant to the tender offer 14,392,003 shares of the Company’s common stock on a pro rata basis from all tendering shareholders and those conditionally exercising stock options.

Stockholder Agreement

Pursuant to the Stockholder Agreement, the Company’s Board was increased from ten to twelve members in October 2001. BMS received the right to nominate two directors to the Company’s Board (each a “BMS director”) so long as its ownership interest in ImClone Systems is 12.5% or greater. If BMS’ ownership interest is 5% or greater but less than 12.5%, BMS will have the right to nominate one BMS director, and if BMS’ ownership interest is less than 5%, BMS will have no right to nominate a BMS director. If the size of the Board is increased to a number greater than twelve, the number of BMS directors would be increased, subject to rounding, such that the number of BMS directors is proportionate to the lesser of BMS’ then-current ownership interest and 19.9%. Notwithstanding the foregoing, BMS will have no right to nominate any BMS directors if (1) the Company has terminated the Commercial Agreement due to a material breach by BMS or (2) BMS’ ownership interest were to remain below 5% for 45 consecutive days.

Based on the number of shares of common stock acquired pursuant to the tender offer, BMS has the right to nominate two directors. BMS designated Andrew G. Bodnar, M.D., J.D., BMS’ Senior Vice President, Strategy and Medical & External Affairs, as one of the initial BMS directors. The nomination of Dr. Bodnar was approved by the Board on November 15, 2001. The other BMS director position was initially filled by Peter S. Ringrose, M.A, and Ph.D. Dr. Ringrose retired in 2002 from his position of Chief Scientific Officer and President, Pharmaceutical Research Institute at BMS, and also resigned from his director position with the Company. BMS has not yet designated a replacement to fill Dr. Ringrose’s vacated Board seat.

Voting of Shares—During the period in which BMS has the right to nominate up to two BMS directors, BMS and its affiliates are required to vote all of their shares in the same proportion as the votes cast by all of the Company’s other stockholders with respect to the election or removal of non-BMS directors.

Committees of the Board of Directors—During the period in which BMS has the right to nominate up to two BMS directors, BMS also has the right, subject to certain exceptions and limitations, to have one member of each committee of the Board be a BMS director.

Approval Required for Certain Actions—The Company may not take any action that constitutes a prohibited action under the Stockholder Agreement without the consent of the BMS directors, until September 19, 2006 or earlier, if any of the following occurs: (1) a reduction in BMS’s ownership interest to below 5% for 45 consecutive days, (2) a transfer or other disposition of shares of the Company’s

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common stock by BMS or any of its affiliates such that BMS and its affiliates own or have control over less than 75% of the maximum number of shares of the Company’s common stock owned by BMS and its affiliates at any time after September 19, 2001, (3) an acquisition by a third party of more than 35% of the outstanding shares of the Company’s common stock, (4) a termination of the Commercial Agreement by BMS due to significant regulatory or safety concerns regarding ERBITUX, or (5) a termination of the Commercial Agreement due to a material breach by BMS. Such prohibited actions include (1) issuing additional shares or securities convertible into shares in excess of 21,473,002 shares of the Company’s common stock in the aggregate, subject to certain exceptions; (2) incurring additional indebtedness if the total of (A) the principal amount of indebtedness incurred since September 19, 2001 and then-outstanding, and (B) the net proceeds from the issuance of any redeemable preferred stock then-outstanding, would exceed the Company’s amount of indebtedness for borrowed money outstanding as of September 19, 2001 by more than $500 million; (3) acquiring any business if the aggregate consideration for such acquisition, when taken together with the aggregate consideration for all other acquisitions consummated during the previous twelve months, is in excess of 25% of the Company’s aggregate value at the time the binding agreement relating to such acquisition was entered into; (4) disposing of all or any substantial portion of the Company’s non-cash assets; (5) entering into non-competition agreements that would be binding on BMS, its affiliates or any BMS director; (6) taking certain actions that would have a discriminatory effect on BMS or any of its affiliates as a stockholder; and (7) issuing capital stock with more than one vote per share.

Limitation on Additional Purchases of Shares and Other Actions—Subject to the exceptions set forth below, until September 19, 2006 or, if earlier, the occurrence of any of (1) an acquisition by a third party of more than 35% of the Company’s outstanding shares, (2) the first anniversary of a reduction in BMS’s ownership interest in the Company to below 5% for 45 consecutive days, or (3) the Company’s taking a prohibited action under the Stockholder Agreement without the consent of the BMS directors, neither BMS nor any of its affiliates will acquire beneficial ownership of any shares of the Company’s common stock or take any of the following actions: (1) encourage any proposal for a business combination with the Company’s or an acquisition of our shares; (2) participate in the solicitation of proxies from holders of shares of the Company’s common stock; (3) form or participate in any “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934) with respect to shares of the Company’s common stock; (4) enter into any voting arrangement with respect to shares of the Company’s common stock; or (5) seek any amendment to or waiver of these restrictions.

The following are exceptions to the standstill restrictions described above: (1) BMS Biologics may acquire beneficial ownership of shares of the Company’s common stock either in the open market or from the Company pursuant to the option described below, so long as, after giving effect to any such acquisition of shares, BMS’ ownership interest would not exceed 19.9%; (2) BMS may make, subject to certain conditions, a proposal to the Board to acquire shares of the Company’s common stock if the Company provides material non-public information to a third party in connection with, or begins active negotiation of, an acquisition by a third party of more than 35% of the outstanding shares; (3) BMS may acquire shares of the Company’s common stock if such acquisition has been approved by a majority of the non-BMS directors; and (4) BMS may make, subject to certain conditions, including that an acquisition of shares be at a premium of at least 25% to the prevailing market price, non-public requests to the Board to amend or waive any of the standstill restrictions described above. Certain of the exceptions to the standstill provisions described above will terminate upon the occurrence of: (1) a reduction in BMS’s ownership interest in the Company to below 5% for 45 consecutive days, (2) a transfer or other disposition of shares of the Company’s common stock by BMS or any of its affiliates such that BMS and its affiliates own or have control over less than 75% of the maximum number of shares owned by BMS and its affiliates at any time after September 19, 2001, (3) a termination of the Commercial Agreement by BMS due to significant regulatory or safety concerns regarding ERBITUX, or (4) a termination of the Commercial Agreement by the Company due to a material breach by BMS.

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Option to Purchase Shares in the Event of Dilution—BMS Biologics has the right under certain circumstances to purchase additional shares of common stock from the Company at market prices, pursuant to an option granted to BMS by the Company, in the event that BMS’s ownership interest is diluted (other than by any transfer or other disposition by BMS or any of its affiliates). BMS can exercise this right (1) once per year, (2) if the Company issues shares of common stock in excess of 10% of the then-outstanding shares in one day, and (3) if BMS’s ownership interest is reduced to below 5% or 12.5%. BMS Biologics’ right to purchase additional shares of common stock from the Company pursuant to this option will terminate on September 19, 2006 or, if earlier, upon the occurrence of (1) an acquisition by a third party of more than 35% of the outstanding shares, or (2) the first anniversary of a reduction in BMS’s ownership interest in the Company to below 5% for 45 consecutive days.

Transfers of Shares—Until March 19, 2005, neither BMS nor any of its affiliates were permitted to transfer any shares of the Company’s common stock or enter into any arrangement that transfers any of the economic consequences associated with the ownership of shares. After March 19, 2005, neither BMS nor any of its affiliates may transfer any shares or enter into any arrangement that transfers any of the economic consequences associated with the ownership of shares, except (1) pursuant to registration rights granted to BMS with respect to the shares, (2) pursuant to Rule 144 under the Securities Act of 1933, as amended or (3) for certain hedging transactions. Any such transfer is subject to the following limitations: (1) the transferee may not acquire beneficial ownership of more than 5% of the then-outstanding shares of common stock; (2) no more than 10% of the total outstanding shares of common stock may be sold in any one registered underwritten public offering; and (3) neither BMS nor any of its affiliates may transfer shares of common stock (except for registered firm commitment underwritten public offerings pursuant to the registration rights described below) or enter into hedging transactions in any twelve-month period that would, individually or in the aggregate, have the effect of reducing the economic exposure of BMS and its affiliates by the equivalent of more than 10% of the maximum number of shares of common stock owned by BMS and its affiliates at any time after September 19, 2001. Notwithstanding the foregoing, BMS Biologics may transfer all, but not less than all, of the shares of common stock owned by it to BMS or to E.R. Squibb or another wholly-owned subsidiary of BMS.

Registration Rights—The Company granted BMS customary registration rights with respect to shares of common stock owned by BMS or any of its affiliates.

Amounts due from BMS related to this agreement totaled approximately $46,312,000 and $61,621,000 at September 30, 2005 and December 31, 2004, respectively, and are included in amounts due from corporate partners in the Consolidated Balance Sheets. The Company recorded collaborative agreement revenue related to this agreement in the Consolidated Statements of Operations totaling approximately $10,787,000 and $9,539,000 for the three months ended September 30, 2005 and 2004, respectively, and $31,891,000 and $28,087,000 for the nine months ended September 30, 2005 and 2004, respectively. Of these amounts, $2,154,000 and $1,922,000 for the three months ended September 30, 2005 and 2004, respectively, and $7,172,000 and $10,264,000 for the nine months ended September 30, 2005 and 2004, respectively, related to reimbursable costs associated with supplying ERBITUX for use in clinical trials associated with this agreement. The majority of the related manufacturing costs in 2004 and a portion in 2005 were expensed prior to February 13, 2004 before the Company obtained approval to sell ERBITUX or, in the case of contract manufacturing, when such services were performed. Reimbursable clinical and regulatory expenses were incurred and totaled approximately $3,467,000 and $3,071,000 for the three months ended September 30, 2005 and 2004, respectively, and $10,338,000 and $8,605,000 for the nine months ended September 30, 2005 and 2004, respectively. These amounts have been recorded as clinical and regulatory expenses and also as collaborative agreement revenue in the Consolidated Statements of Operations. Reimbursable marketing and general expenses and royalty expenses were incurred and totaled approximately $5,166,000 and $4,546,000 for the three months ended September 30, 2005 and 2004, respectively, and $14,381,000 and $9,218,000 for the nine months ended September 30, 2005 and 2004,

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respectively. These amounts have been recorded as marketing, general and administrative expenses, royalty expense, and also as collaborative agreement revenue in the Consolidated Statements of Operations.

License fees and milestone revenue consists of the following: (in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2005		2004		2005		2004
BMS:
ERBITUX license fee revenue	$	27,049	$	22,861	$	74,882	$	108,257
Merck KGaA:
ERBITUX and BEC2 license fee revenue	97		97		1,289		289
Other license fee revenue	—		—		—		58
Total license fees and milestone revenue	$	27,146	$	22,958	$	76,171	$	108,604

Royalty revenue consists of the following: (in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2005		2004		2005		2004
BMS	$	41,715	$	32,804	$	113,828	$	67,474
Merck KGaA	4,881		1,332		10,887		2,203
Other	51		1		95		65
Total royalty revenue	$	46,647	$	34,137	$	124,810	$	69,742

Collaborative agreement revenue from corporate partners consists of the following: (in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2005		2004		2005		2004
BMS	$	10,787	$	9,539	$	31,891	$	28,087
Merck KGaA	11,194		875		22,136		4,657
Other	3		—		12		51
Total collaborative agreement revenue	$	21,984	$	10,414	$	54,039	$	32,795

Amounts due from corporate partners consists of the following: (in thousands)

	September 30, 2005			December 31, 2004
BMS:
ERBITUX		$	46,312		$	61,621
Merck KGaA:
ERBITUX and BEC2		20,178			8,132
Total amounts due from corporate partners		$	66,490		$	69,753

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Deferred revenue consists of the following: (in thousands)

	September 30, 2005				December 31, 2004
BMS:
ERBITUX commercial agreement		$	375,487			$	450,368
Merck KGaA:
ERBITUX development and license agreement		2,944				3,111
Prepayment of ERBITUX supplied for medical affairs program		—				2,544
Development and commercialization agreement		1,663				1,785
Total deferred revenue		380,094				457,808
Less: current portion		(101,679		)		(108,994		)
Total long-term deferred revenue		$	278,415			$	348,814

(C)UCB S.A.

In August 2005, the Company entered into a Collaboration and License Agreement with UCB S.A., a company registered in Belgium, for the development and commercialization of CDP-791, UCB’s novel, investigational PEGylated diFab antibody targeting the vascular endothelial growth factor receptor-2 (“VEGFR-2”). No upfront or milestone payments are payable under the Agreement. The Agreement provides that the Company and UCB S.A will share equally all agreed upon development costs for CDP-791 as well as worldwide profits derived from the commercialization of CDP-791 in indications jointly pursued by the parties. The Company will also receive an incremental single-digit royalty on net sales worldwide for such indications. Under certain circumstances, one party may be entitled to pursue (in its territory) an indication independently of the other party, which retains the option to join in the development or commercialization at a later stage. The Company has exclusive commercialization rights to CDP-791 in North America, with UCB receiving such rights in Europe, Japan, and the rest of the world.

(9)Discontinuation of Small Molecule Program

On May 11, 2005, the Company announced a plan to discontinue its small molecule research program. This decision was made after evaluating the Company’s investment in such program against the time horizon before commercial benefits would be realized.  As a result of this decision, the Company has reflected in the Consolidated Statements of Operations for the nine months ended September 30, 2005 approximately $6,200,000 of costs associated with the discontinuation of this program. Such costs include approximately $2,260,000 of costs related to severance for 45 employees that were terminated, $3,880,000 of costs related to the write-off of fixed assets used in such program and approximately $60,000 of contract termination costs related to the cancellation of the lease at the Brooklyn facility where the employees were conducting such research. All of these costs were expensed as of June 30, 2005. As of June 30, 2005, the Company had a liability of approximately $1,580,000 reflected in Accrued expenses, of which approximately $1,520,000 related to termination benefits and approximately $60,000 related to contract termination expenses.  As of September 30, 2005, the Company has a liability of approximately $125,000 reflected in Accrued expenses, which relates to termination benefits. The reduction in the accruals from June 30, 2005 as compared to September 30, 2005 is due to payments made. The disposition of this program is substantially complete and the Company expects the majority of the remaining termination benefits to be paid by December 31, 2005.

(10)Commitments and Contingencies

Beginning in January 2002, a number of complaints asserting claims under the federal securities laws against the Company and certain of the Company’s directors and officers were filed in the U.S. District Court for the Southern District of New York. Those actions were consolidated under the caption Irvine v.

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ImClone Systems Incorporated, et al., No. 02 Civ. 0109 (RO). In the corrected consolidated amended complaint, plaintiffs asserted claims against the Company, its former President and Chief Executive Officer, Dr. Samuel D. Waksal, its former Chief Scientific Officer and then-President and Chief Executive Officer, Dr. Harlan W. Waksal, and several of the Company’s other present or former officers and directors, for securities fraud under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b5, on behalf of a purported class of persons who purchased the Company’s publicly traded securities between March 27, 2001 and January 25, 2002. The complaint also asserted claims against Dr. Samuel D. Waksal under section 20A of the Exchange Act on behalf of a separate purported sub-class of purchasers of the Company’s securities between December 27, 2001 and December 28, 2001. The complaint generally alleged that various public statements made by or on behalf of the Company or the other defendants during 2001 and early 2002 regarding the prospects for FDA approval of ERBITUX were false or misleading when made, that the individual defendants were allegedly aware of material non-public information regarding the actual prospects for ERBITUX at the time that they engaged in transactions in the Company’s common stock and that members of the purported stockholder class suffered damages when the market price of the Company’s common stock declined following disclosure of the information that allegedly had not been previously disclosed. The complaint sought to proceed on behalf of the alleged classes described above, sought monetary damages in an unspecified amount and sought recovery of plaintiffs’ costs and attorneys’ fees. On January 24, 2005, the Company announced that it had reached an agreement in principle to settle the consolidated class action for a cash payment of $75 million, a portion of which would be paid by the Company’s insurers. The parties signed a definitive stipulation of settlement as of March 9, 2005. As provided for under the stipulation of settlement, on March 11, 2005, the Company paid $50 million into an escrow account, subject to Court approval of the proposed settlement. On July 29, 2005 the Court approved the proposed settlement. On August 5, 2005, the Company paid the remaining $25 million into the escrow account, with such funds to be held in and distributed pursuant to the terms of the settlement. As of  September 30, 2005, the Company has collected from its insurers all of the outstanding receivable amounting to $20.5 million, which was reflected as a receivable in Other current assets, as of December 31, 2004. The amount received from the insurers includes $8.75 million, less attorneys fees of $875,000 that was paid to the Company under the derivative settlement discussed below.

Separately, on September 17, 2002, an individual purchaser of the Company’s common stock filed an action (Flynn v. ImClone Systems Incorporated, et al., No. 02 Civ 7499 (RO)) on his own behalf in the U.S. District Court for the Southern District of New York asserting claims against the Company, Dr. Samuel D. Waksal and Dr. Harlan W. Waksal under sections 10(b) and 20(a) of the Exchange Act and Securities and Exchange Commission Rule 10b-5. This matter was settled and dismissed with prejudice in a stipulation and order entered on March 21, 2005.

Beginning on January 13, 2002, and continuing thereafter, nine separate purported shareholder derivative actions were filed against members of the Company’s board of directors, certain of the Company’s present and former officers, and the Company, as nominal defendant, advancing claims based on allegations similar to the allegations in the federal securities class action complaints. Four of these derivative cases were filed in the Delaware Court of Chancery and have been consolidated in that court under the caption In re ImClone Systems Incorporated Derivative Litigation, Cons. C.A. No. 19341-NC. Three of these derivative actions were filed in New York State Supreme Court in Manhattan. All of these state court actions have been stayed in deference to the proceedings in the U.S. District Court for the Southern District of New York, which have been consolidated under the caption In re ImClone Systems, Inc. Shareholder Derivative Litigation, Master File No. 02 CV 163 (RO). A supplemental verified consolidated amended derivative complaint in these consolidated federal actions was filed on August 8, 2003. It asserted, purportedly on behalf of the Company, claims including breach of fiduciary duty by certain current and former members of the Company’s board of directors, among others, based on allegations including that they failed to ensure that the Company’s disclosures relating to the regulatory

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and marketing prospects for ERBITUX were not misleading and that they failed to maintain adequate controls and to exercise due care with regard to the Company’s ERBITUX application to the FDA. On January 9, 2004, the Company filed a motion to dismiss the complaint due to plaintiffs’ failure to make a pre-suit demand on the Company’s board of directors to institute suit or to allege grounds for concluding that such a demand would have been futile. The individual defendants filed motions on the same date, both joining in the Company’s motion and seeking to dismiss the complaint for failure to state a claim. On January 24, 2005, the Company announced that it had reached an agreement in principle to settle the consolidated derivative action. The parties entered into a definitive stipulation of settlement on March 14, 2005, which was approved by the Court on July 29, 2005. In August 2005, the Company received $8.75 million from its insurers, which was contributed toward the settlement of the Irvine securities class action described above, after deducting $875,000 for Court awarded plaintiffs’ attorney’s fees and expenses.

On October 8, 2003, certain mutual funds that are past or present common stockholders of BMS filed an action in New York State court against BMS, certain present or former officers and directors of BMS and the Company asserting that they were misled into purchasing or holding their shares of BMS common stock as a result of various public statements by BMS and certain present or former officers or directors of BMS, and that the Company allegedly aided and abetted certain of these misstatements. The action was styled FSS Franklin Global Health Care Fund, et al. v. Bristol-Myers Squibb Co., et al., Index No. 603168/03. On June 1, 2005, an agreement to settle this action was reached. Under the terms of the settlement, BMS agreed to pay the plaintiffs $89 million in exchange for the termination of the plaintiffs’ claims. The Company is not responsible to pay any portion of the settlement amount and has made no admission of wrongdoing. Pursuant to the terms of the settlement agreement, the action was voluntarily dismissed with prejudice by a stipulation filed on June 16, 2005.

The Company received subpoenas and requests for information in connection with an investigation by the SEC relating to the circumstances surrounding the disclosure of the FDA “refusal to file” letter dated December 28, 2001, and trading in the Company’s securities by certain ImClone Systems insiders in 2001. The Company also received subpoenas and requests for information pertaining to document retention issues in 2001 and 2002, and to certain communications regarding ERBITUX in 2000. On June 19, 2002, the Company received a written “Wells Notice” from the staff of the SEC, indicating that the staff of the SEC is considering recommending that the SEC bring an action against the Company relating to the Company’s disclosures immediately following the receipt of a “refusal to file” letter from the FDA on December 28, 2001 for the Company’s BLA for ERBITUX. The Company filed a Wells submission on July 12, 2002 in response to the staff’s Wells Notice. There have been no recent developments in connection with this SEC investigation.

On August 14, 2002, after the federal grand jury indictment of Dr. Samuel D. Waksal had been issued but before Dr. Samuel D. Waksal’s guilty plea to certain counts of that indictment, the Company filed an action in New York State Supreme Court seeking recovery of certain compensation, including advancement of certain defense costs, that the Company had paid to or on behalf of Dr. Samuel D. Waksal and cancellation of certain stock options. That action was styled ImClone Systems Incorporated v. Samuel D. Waksal, Index No. 02/602996. On July 25, 2003, Dr. Samuel D. Waksal filed a Motion to Compel Arbitration seeking to have all claims in connection with the Company’s action against him resolved in arbitration. By order dated September 19, 2003, the Court granted Dr. Samuel D. Waksal’s motion and the action was stayed pending arbitration. On September 25, 2003, Dr. Samuel D. Waksal submitted a Demand for Arbitration with the American Arbitration Association (the “AAA”), by which Dr. Samuel D. Waksal asserts claims to enforce the terms of his separation agreement, including provisions relating to advancement of legal fees, expenses, interest and indemnification, for which Dr. Samuel D. Waksal claims unspecified damages of at least $10 million. The Demand for Arbitration also seeks to resolve the claims that the Company asserted in the New York State Supreme Court action. On November 7, 2003, the Company filed an Answer and Counterclaims by which the Company denied Dr. Samuel D. Waksal’s entitlement to advancement of legal fees, expenses and indemnification, and

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asserted claims seeking recovery of certain compensation, including stock options, cash payments and advancement of certain defense costs that the Company had paid to or on behalf of Dr. Samuel D. Waksal. In response, on December 15, 2003, Dr. Samuel D. Waksal filed a Reply to Counterclaims.

On March 10, 2004, the Company commenced a second action against Dr. Samuel D. Waksal in the New York State Supreme Court. That action is styled ImClone Systems Incorporated v. Samuel D. Waksal, Index No. 04/600643. By this action, the Company seeks the return of more than $21 million that the Company paid to Dr. Samuel D. Waksal, as proceeds from stock option exercises, which the Company alleges he was expected to pay over to federal, state and local tax authorities in satisfaction of his tax obligations arising from certain exercises between 1999 and 2001 of warrants and non-qualified stock options. Specifically, by this action, the Company seeks to recover: (a) $4.5 million that the Company paid to the State of New York in respect of exercises of non-qualified stock options and certain warrants in 2000; (b) at least $16.6 million that the Company paid to Samuel D. Waksal in the form of ImClone common stock, in lieu of withholding federal income taxes from exercises of non-qualified stock options and certain warrants in 2000; and (c) approximately $1.1 million that the Company paid in the form of ImClone common stock to Samuel D. Waksal and his beneficiaries, in lieu of withholding federal, state and local income taxes from certain warrant exercises in 1999-2001. The complaint asserts claims for unjust enrichment, common law indemnification, moneys had and received and constructive trust. On June 18, 2004, Dr. Samuel D. Waksal filed an Answer to the Company’s Complaint.

The Company and Dr. Samuel D. Waksal have entered into an agreement in principle to settle the foregoing actions, providing for, among other things,  judgments in both actions to be obtained in the Company’s favor. The settlement would include the payment of director and officer legal fee expense indemnification by the Company, for which the Company recorded a reserve of approximately $1.9 million in the third quarter of 2005.

The IRS has commenced audits of the Company’s income tax and employment tax returns for tax years 1999 through 2001. The Company has responded to all requests for information and documents received to date from the IRS and is awaiting further requests or action from the IRS.

On March 31, 2003, the Company received notification from the SEC that it was conducting an informal inquiry into these matters and on April 2, 2003, the Company received a request from the SEC for the voluntary production of related documents and information. The Company is cooperating fully with this SEC inquiry. There have been no developments in connection with this SEC informal inquiry since April 2003.

On October 28, 2003, a complaint was filed by Yeda Research and Development Company Ltd. (“Yeda”) against ImClone Systems and Aventis Pharmaceuticals, Inc. in the U.S. District Court for the Southern District of New York (03 CV 8484). This action alleges and seeks that three individuals associated with Yeda should also be named as co-inventors on U.S. Patent No. 6,217,866. On June 7, 2005, Yeda amended their U.S. complaint to seek sole inventorship of the subject patent. On November 4, 2005, the Court denied the Company’s motion for summary judgment with respect to this matter, as filed with the Court on June 24, 2005.  The Company is vigorously defending against the claims asserted in this action. The Company is unable to predict the outcome of this action at the present time.

On March 25, 2004, an action was filed in the United Kingdom Patent Office entitled Referrer’s Statement requesting transfer of co-ownership and amendment of patent EP (UK) 0 667 165 to add three Yeda employees as inventors. Also on March 25, 2004, a German action entitled Legal Action was filed in the Munich District Court I, Patent Litigation Division, seeking to add three Yeda employees as inventors on patent EP (DE) 0 667 165. The Company was not named as a party in these actions that relate to the European equivalent of U.S. Patent No. 6,217,866 discussed above; accordingly, the Company has intervened in the German and the U.K. actions. On June 29, 2005, Yeda sought to amend their pleadings in the United Kingdom to seek sole inventorship. Additionally, on or about March 25, 2005 and March 29, 2005, respectively, Yeda filed legal actions in Austria and France against both Aventis and ImClone

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Systems seeking full inventorship of EP (AU) 0 667 165 and EP (FR) 0 667 165, as well as payment of legal costs and fees.

On May 4, 2004, a complaint was filed against the Company by Massachusetts Institute of Technology (“MIT”) and Repligen Corporation (“Repligen”) in the U.S. District Court for the District of Massachusetts (04-10884 RGS). This action alleges that ERBITUX infringes U.S. Patent No. 4,663,281, which is owned by MIT and exclusively licensed to Repligen. The Company is vigorously defending against claims asserted in this action. Fact discovery is ongoing. The Company is unable to predict the outcome of this action at the present time.

No reserve has been established in the financial statements for any of the Yeda or MIT and Repligen actions because the Company does not believe that such a reserve is required to be established at this time under Statement of Financial Accounting Standards No. 5.

The Company is developing a fully human monoclonal antibody, referred to as IMC-11F8, which it intends to commercialize outside the United States and Canada. The Company believes it has the right to do so under its existing development and license agreement with Merck KGaA. However, Merck KGaA has advised the Company that it believes that IMC-11F8 could be covered under the development and license agreement with Merck KGaA and that it could therefore have the exclusive rights to market IMC-11F8 outside the United States and Canada and co-exclusive development rights in Japan, for which it would pay the same royalty as it pays for ERBITUX. See “Corporate Collaborations—Collaborations with Merck KGaA” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. The Company believes that IMC-11F8 is not covered under the Merck KGaA development and license agreement. In agreement with Merck KGaA, the Company submitted this dispute to binding arbitration through an expedited process outside of the provisions of the development and license agreement. If successful in the arbitration, Merck KGaA averred that it is entitled to certain unspecified damages under the development and license agreement. Merck KGaA has subsequently taken the position that the expedited arbitration provision is no longer valid and the Company has sued Merck KGaA in federal court in the Southern District of New York to either enforce the arbitration provisions previously agreed to or to have the court decide the question of whether IMC-11F8 is or is not covered under the development and license agreement with Merck KGaA. While the Company intends to vigorously defend its position as it relates to IMC-11F8 in arbitration, in federal court or any other form of dispute resolution, there can be no assurance that its position will prevail, and it is unable at this time to predict the outcome of these proceedings. No reserve has been established in the financial statements for these proceedings because the Company does not believe that such a reserve is required to be established at this time under Statement of Financial Accounting Standards No. 5.

The Company has not recognized withholding tax liabilities in respect of exercises of certain warrants by Robert F. Goldhammer, one of the four former officers or directors to whom warrants were issued and previously treated as non-compensatory warrants. Based on the Company’s investigation, it believes that, although such warrants were compensatory, such warrants were received by Mr. Goldhammer in connection with the performance of services by him in his capacity as a director, rather than as an employee, and, as such, are not subject to tax withholding requirements. In addition, in 1999, Mr. Goldhammer erroneously received a portion of a stock option grant in the form of incentive stock options, which under federal law may only be granted to employees. There can be no assurance, however, that the taxing authorities will agree with the Company’s position and will not assert that the Company is liable for the failure to withhold income and employment taxes with respect to the exercise of such warrants and any stock options by Mr. Goldhammer. If the Company became liable for the failure to withhold taxes on the exercise of such warrants and any stock options by Mr. Goldhammer, the aggregate potential liability, exclusive of any interest or penalties, would be approximately $8,300,000.

The Company has not recognized accruals for penalties and interest that may be imposed with respect to the withholding tax issues previously described and other related contingencies, including the period

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covered by the statute of limitations and the Company’s determination of certain exercise dates, because it does not believe that losses from such contingencies are probable, or in the event that any taxing authority makes a claim for penalties or interest, the Company believes that it will be able to settle the total amount asserted (including any liability for taxes) for an amount not in excess of the liability for taxes already accrued with respect to the relevant withholding tax issue. With respect to the statute of limitations and the Company’s determination of certain exercise dates, while the Company does not believe a loss is probable, there is a potential additional liability with respect to these issues that may be asserted by a taxing authority. If taxing authorities assert such issues and prevail related to these withholding tax issues and other related contingencies, including penalties, the liability that could be imposed by taxing authorities would be substantial. The potential interest on the withholding tax liabilities recorded on the Consolidated Balance Sheets could be up to a maximum amount of approximately $9,100,000 at September 30, 2005. Potential additional withholding tax liability on other related contingencies amounts to approximately $8,000,000, exclusive of any interest or penalties, and excluding the amount potentially attributable to Mr. Goldhammer noted above.

In October 2001, the Company entered into a sublease (the “Sublease”) for a four-story building at 325 Spring Street, New York, New York, which includes approximately 100,000 square feet of usable space. The Sublease has a term of 22 years, followed by two five-year renewal option periods. In order to induce the sublandlord to enter into the Sublease, the Company made a loan to the sublandlord in the principal amount of a $10,000,000 note receivable, of which $8,913,000 is outstanding as of September 30, 2005. The loan is secured by a leasehold mortgage on the prime lease as well as a collateral assignment of rents by the sublandlord. The loan is payable by the sublandlord over 20 years and bears interest at 5 ½ % in years one through five, 6 ½ % in years six through ten, 7 ½ % in years eleven through fifteen and 8 ½ % in years sixteen through twenty. In addition, the Company paid the owner a consent fee in the amount of $500,000. Effective March 1, 2005, the Company amended the Sublease to add an additional 6,500 square feet of space upon all the same terms and conditions set forth in the Sublease. In connection with this amendment, the Company paid an up-front fee of $1,690,000 which is being amortized, as a reduction in lease expense, over the respective term of the Sublease. The future minimum lease payments remaining at September 30, 2005, are approximately $49,282,000 over the term of the Sublease. The Company is in the process of developing the property for occupancy by its Research department in late 2006.

The Company leases its research and corporate headquarters in New York City. In August 2004, the Company modified its existing operating lease for its corporate headquarters in New York City. The modification extends the term of the lease, which was to expire at December 31, 2004, for an additional ten years for a portion of the premises and by an additional four years for the space that houses its Research department. As noted above, the Company plans to move its research department to its 325 Spring Street, New York location. The future minimum lease payments remaining at September 30, 2005, are approximately $10,757,000 over the term of the lease.

In June 2004, the Company entered into an operating lease for a building located at 59-61 ImClone Drive in Branchburg, New Jersey. The building contains approximately 54,247 square feet of floor area. The lease expires on December 31, 2022 with no option to renew or extend beyond such date. The future minimum lease payments at September 30, 2005 are $10,467,000.

In May 2001, the Company entered into an operating lease for a 4,000 square foot portion of a 15,000 square foot building and an adjacent 6,250 square foot building (collectively the “Brooklyn facility”) in Brooklyn, New York. Effective February 1, 2005, the Company entered into an additional operating lease for approximately 2,269 square feet of a building known as 760 Parkside Avenue in Brooklyn, New York. These facilities were used by our Small Molecule program, which the Company decided in May 2005 to discontinue. The Company has terminated these lease agreements and has no further obligations to the landlord.

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In August 2005, the Company entered into an operating lease for a portion of a building located at 41A ImClone Drive in Branchburg, New Jersey. The Company is leasing approximately 10,704 square feet of floor area. The lease expires on August 31, 2010 with two options to renew for five additional years each. The future minimum lease payments at September 30, 2005 are $512,000.

(11)Defined Contribution Plan

All employees of the Company who meet certain minimum age and period of service requirements are eligible to participate in a 401(k) defined contribution plan. The 401(k) plan allows eligible employees to defer up to 25 percent of their annual compensation, subject to certain limitations imposed by federal law. The amounts contributed by employees are immediately vested and non-forfeitable. Under the 401(k) plan, the Company, at management’s discretion, may match employee contributions and/or make discretionary contributions. Neither the employee contributions nor voluntary matching contributions are invested in the Company’s securities. Total expense incurred by the Company was $463,000 and $127,000 for the three months ended September 30, 2005 and 2004, respectively, and $1,473,000 and $431,000 for the nine months ended September 30, 2005 and 2004, respectively.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is provided to further the reader’s understanding of the consolidated financial statements, financial condition and results of operations of ImClone Systems in this Quarterly Report on Form 10-Q. This discussion should be read in conjunction with the consolidated financial statements and the accompanying notes included in our filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2004. This discussion contains forward-looking statements based upon current expectations that involve risk and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below as well as other risks detailed in our filings with the SEC.

OVERVIEW

ImClone Systems is a biopharmaceutical company whose mission is to advance oncology care by developing and commercializing a portfolio of targeted treatments designed to address the medical needs of patients with cancer. Our lead product, ERBITUX is a first-of-its-kind antibody approved by the United States Food and Drug Agency (“FDA”) for use in combination with irinotecan in the treatment of patients with EGFR-expressing, metastatic colorectal cancer who are refractory to irinotecan-based chemotherapy and for use as a single agent in the treatment of patients with EGFR-expressing, metastatic colorectal cancer who are intolerant to irinotecan-based chemotherapy. ERBITUX binds specifically to epidermal growth factor receptor (EGFR, HER1, c-ErbB-1) on both normal and tumor cells, and competitively inhibits the binding of epidermal growth factor (EGF) and other ligands, such as transforming growth factor-alpha. We are conducting, and in some cases have completed, potential registration studies evaluating ERBITUX for the treatment of colorectal, head and neck, lung and pancreatic cancers, as well as other indications.

On February 12, 2004, the FDA approved ERBITUX for use in combination with irinotecan in the treatment of patients with EGFR-expressing, metastatic colorectal cancer who are refractory to irinotecan-based chemotherapy and for use as a single agent in the treatment of patients with EGFR-expressing, metastatic colorectal cancer who are intolerant to irinotecan-based chemotherapy. In September 2005, Health Canada approved the use of ERBITUX for use in combination with irinotecan for the treatment of EGFR-expressing metastatic colorectal carcinoma in patients who are refractory to other irinotecan-based chemotherapy regimens and for use as a single agent for the treatment of EGFR-expressing, metastatic colorectal carcinoma in patients who are intolerant to irinotecan-based chemotherapy. In August 2005, the Company filed an sBLA to seek approval of ERBITUX for use as a single agent and in combination with radiation in Squamous Cell Carcinoma of the Head and Neck (SCCHN) with the FDA. In October 2005, the FDA notified us that it had accepted the sBLA for filing and had granted it priority review.

On December 1, 2003, Swissmedic, the Swiss agency for therapeutic products, approved ERBITUX in Switzerland for the treatment of patients with colorectal cancer who no longer respond to standard chemotherapy treatment with irinotecan. On June 30, 2004, Merck KGaA received marketing approval by the European Commission to sell ERBITUX for use in combination with irinotecan for the treatment of patients with EGFR-expressing metastatic colorectal cancer after failure of irinotecan including cytotoxic therapy. As of September 30, 2005, Merck KGaA has obtained approval for ERBITUX in 45 countries, with Ecuador, Guatemala, Panama, Philippines and Malaysia approving it during the third quarter of 2005.

Our revenues, as well as our results of operations, have fluctuated and are expected to continue to fluctuate significantly from period to period due to several factors, including but not limited to:

·the amount and timing of revenues earned from commercial sales of ERBITUX;

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·the timing of when we begin to reflect full absorption cost of goods sold on sales of ERBITUX to our corporate partners;

·the timing of recognition of license fees and milestone revenues;

·the status of development of our various product candidates;

·whether or not we achieve specified research or commercialization milestones;

·legal costs and the outcome of outstanding legal proceedings and investigations; and

·the addition or termination of research programs or funding support and variations in the level of expenses related to our proprietary product candidates during any given period.

As a result of our substantial investment in research and development, we have incurred significant operating losses and have an accumulated deficit of approximately $443.2 million as of September 30, 2005. We anticipate that our accumulated deficit may continue to decrease in the future as we earn revenues on commercial sales of ERBITUX and generate net income. Although we have historically devoted most of our efforts and resources to research and development, we expect to devote greater efforts and resources to the manufacturing, marketing, and commercialization of ERBITUX. There is no assurance that we will be able to continue to successfully manufacture, market or commercialize ERBITUX or that potential customers will buy ERBITUX. We rely entirely on third party manufacturers for filling and finishing services with respect to ERBITUX. If our current third party manufacturers or critical raw material suppliers fail to meet our expectations, we cannot be assured that we will be able to enter into new agreements with other suppliers or third party manufacturers without an adverse effect on our business.

OUTLOOK

We anticipate that our results in 2005 will reflect the following: Royalty revenue will continue to reflect 39% of BMS’ in-market net sales and a range of 6.5%-7.5% of Merck KGaA’s in-market net sales. Due to the delay in our sBLA filing for the treatment of SCCHN with the FDA, we no longer expect to earn a milestone from BMS in 2005. Therefore, License fees and milestone revenue in 2005 will include the continuing amortization, based on clinical development spending, of the $650 million received thus far from BMS. At a comparable rate of spending from the current quarter, amortization of milestones received to date should slightly exceed $100 million in 2005. The selling price to our partners for Manufacturing revenue in 2005 is approximately one-half of the price in 2004, since the 2004 price reflected a significant component of materials sourced from Lonza at significantly higher costs than our own manufacturing costs. Collaborative agreement revenue will continue to include the purchase of ERBITUX for clinical use by our partners, as well as reimbursement of certain regulatory and clinical expenses incurred on behalf of ERBITUX, reimbursement for certain marketing and administrative expenses, and reimbursement for royalty expenses which will approximate 4.5% of U.S. in-market net sales, and approximately 1% of  net sales outside the U.S.

We estimate that research and development expenses for the full year of 2005 will range between $110-$115 million reflecting higher than anticipated demand of ERBITUX for clinical use by Merck, based on their most recent inventory demand schedule. Clinical and regulatory expenses in 2005 are expected to be between $48-$50 million for the full year, as we embark on a number of studies in support of expanded use of ERBITUX as well as Phase I clinical development programs for our pipeline products. Marketing, general and administrative expenses should approximate $68 million in 2005. As a result of a reduction in the royalty obligation beginning in the third quarter of 2005, gross royalty expenses have decreased from approximately 12.75% to 12.25% of U.S. in-market net sales; of which approximately 4.5% of U.S. in-market net sales is reimbursed as a component of collaborative agreement revenue, resulting in a net royalty burden to ImClone of 7.75% related to U.S. in-market net sales. Cost of manufacturing revenue

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will not be fully reflected on our statement of operations until such time as all partially expensed ERBITUX has been sold through to our partners for either commercial or clinical use. We expect that cost of manufacturing revenue will continue to reflect increased costs as we consume inventory that was partially expensed prior to February 13, 2004. We anticipate that the transition period until we begin to reflect full absorption costs of manufacturing revenue, may take, depending on the demand schedule from our partners, approximately one additional quarter. The effective tax rate for the full year of 2005 (assuming no milestone is earned from Bristol-Myers Squibb) is estimated to be 1% excluding the effect of an adjustment recorded in the third quarter of 2005, of approximately $440,000, resulting from the reconciliation of the prior years’ tax provision to our recently filed tax returns.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on assumptions that we believe to be reasonable under the circumstances. Estimates are deemed critical when a different methodology could have reasonably been used or where changes in the estimate from period to period may have a material impact on the Company’s financial condition or results of operations. The Company’s critical accounting policies that require management to make significant judgments, estimates, and assumptions are set forth below. The development and selection of the critical accounting policies, and the related disclosure below have been reviewed with the Audit Committee of the Company’s Board of Directors.

Revenue Recognition—Our revenues are derived from four primary sources: license fees and milestone payments, manufacturing revenue, royalty revenue, and collaborative agreement revenue.

Revenues from license fees and milestone payments primarily consist of up-front license fees and milestone payments received under the Commercial Agreement with BMS and E.R. Squibb, relating to ERBITUX, and milestone payments received under the development and license agreement with Merck KGaA. We recognize all non-refundable up-front license fees as revenues in accordance with the guidance provided in the SEC’s Staff Accounting Bulletin No. 104. Our most critical application of this policy, to date, relates to the $650,000,000 in license fees received from BMS and E.R. Squibb under the Commercial Agreement which are being deferred and recognized as revenue based upon the actual product research and development costs incurred since September 19, 2001 to date by BMS and E.R. Squibb and ImClone as a percentage of the estimated total of such costs to be incurred over the 17 year term of the Commercial Agreement. The estimated total of such costs is based on the clinical development budget which establishes joint responsibilities that will be carried out by both the Company and BMS and E.R. Squibb for certain clinical and other studies. Of the $650,000,000 in payments received through September 30, 2005, $27,049,000 was recognized as revenue in the third quarter of 2005 and $274,513,000 from the commencement of the Commercial Agreement in 2001 through September 30, 2005. The methodology used to recognize deferred revenue involves a number of estimates and judgments, such as the estimate of total product research and development costs to be incurred under the Commercial Agreement. Changes in these estimates and judgments can have a significant effect on the size and timing of revenue recognition. In addition, if management had chosen a different methodology to recognize the license fee and milestone payments received under the Commercial Agreement, the Company’s financial position and results of operations could have differed materially. For example, if the Company were to recognize the revenues earned from the Commercial Agreement on a straight-line basis over the life of the agreement, the Company would have recognized approximately $10,600,000 and $118,200,000 as revenue for the three months and from the commencement of the Commercial Agreement, respectively, through September 30, 2005. Management believes that the current methodology used to recognize revenues under

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the Commercial Agreement, which reflects the level of effort consistent with the product development activities, is the most appropriate methodology because it reflects the level of expenditure and activity in the period in which it is being spent as compared to the total expected expenditure over the life of the Commercial Agreement. This cost to cost approach is systematic and rational, it provides a factually supportable pattern to track progress, and is reflective of the level of effort, which varies over time.

Non-refundable upfront payments received from Merck KGaA were deferred due to our significant continuing involvement and are being recognized as revenue on a straight-line basis over the estimated service period because the activities specified in the agreement between the Company and Merck KGaA will be performed over the estimated service period and there is no other pattern or circumstances that indicate a different way in which the revenue is earned. In addition, the development and license agreement with Merck KGaA does not contain any provisions for establishing a clinical budget and none has been established between the parties. This agreement does not call for co-development with the Company in Merck KGaA’s territory; rather Merck KGaA is solely responsible for regulatory efforts in its territory. Non-refundable milestone payments, which represent the achievement of a significant step in the research and development process, pursuant to collaborative agreements other than the Commercial Agreement, are recognized as revenue upon the achievement of the specified milestone. This is because each milestone payment represents the achievement of a substantive step in the research and development process and Merck KGaA has the right to evaluate the technology to decide whether to continue with the research and development program as each milestone is reached.

Manufacturing revenue consists of revenue earned on the sale of ERBITUX to our corporate partners for subsequent commercial sale. The Company recognizes manufacturing revenue when the product is shipped, which is when our partners take ownership and title has passed, collectibility is reasonably assured, the sales price is fixed or determinable, and there is persuasive evidence of an arrangement. We are contractually obligated to sell ERBITUX to BMS at our cost of production plus a 10% markup. We sell bulk inventory to Merck KGaA at our full absorption cost of production. The sales price for ERBITUX to BMS in 2004 reflected the weighted average costs of production for inventory produced by Lonza (which was exhausted in 2004) and at our BB36 manufacturing plant. The sales price to our corporate partners for ERBITUX for commercial distribution in 2005, which is based solely on our costs to produce at our BB36 plant,  is significantly lower (i.e. roughly one-half) than the price charged to BMS in 2004 since our unit cost to manufacture ERBITUX is significantly lower than the cost paid to Lonza for manufacturing ERBITUX. The continuing level of manufacturing revenue in future periods may fluctuate significantly based on market demand, our cost of production, as well as BMS’s required level of safety stock inventory for ERBITUX.

Royalty revenues from licensees, which are based on third-party sales of licensed products and technology, are recorded as earned in accordance with contract terms when third-party sales can be reliably measured and collection of funds is reasonably assured.

Collaborative agreement revenue consists of reimbursements received from BMS and E.R. Squibb and Merck KGaA related to clinical and regulatory studies, ERBITUX provided to them for use in clinical studies, reimbursement of a portion of royalty expense and certain marketing and administrative costs. Collaborative agreement revenue is recorded as earned based on the performance requirements under the respective contracts.

Withholding Taxes—In January 2003, New York State notified the Company that it was liable for the New York State and City income taxes that were not withheld because one or more of the Company’s employees who exercised certain non-qualified stock options in 1999 and 2000 failed to pay New York State and City income taxes for those years. On March 13, 2003, the Company entered into a closing agreement with New York State, paying $4,500,000 to settle the matter. Subsequently, the Company became aware of another potential income and employment tax withholding liability associated with the

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exercise of certain warrants granted in the early years of the Company’s existence that were held by certain former officers, directors and employees. After the Company informed New York State of the issue relating to the warrants, New York State, in June 2003, notified the Company that it was continuing the previously conducted audit of the Company and was evaluating the terms of the closing agreement to determine whether or not it should be re-opened. On March 31, 2004, the Company entered into a new closing agreement pursuant to which the Company paid New York State an additional $1,000,000 in full satisfaction of all the deficiencies and determinations of withholding taxes for the years 1999-2001. As a result, we utilized $1,000,000 of the liability of $2,815,000 that we previously established for New York withholding taxes on stock options and warrants exercised and recognized a benefit of $1,815,000 as a recovery in the Consolidated Statements of Operations for the nine months ended September 30, 2004.

On March 13, 2003, the Company initiated discussions with the Internal Revenue Service (the “IRS”) relating to the federal income taxes applicable to the above noted issues. Although the IRS has not yet asserted that the Company is required to make a payment with respect to such failure to withhold, the IRS may assert that such a liability exists, and may further assert that the Company is liable for interest and penalties. The IRS has commenced audits of the Company’s income tax and employment tax returns for tax years 1999 through 2001. The Company is cooperating fully with the IRS with respect to these audits, and intends to continue to do so.

The Company has not recognized withholding tax liabilities in respect of exercises of certain warrants by Robert F. Goldhammer, one of the four former officers or directors to whom warrants were issued and previously treated as non-compensatory warrants. Based on the Company’s investigation, it believes that, although such warrants were compensatory, such warrants were received by Mr. Goldhammer in connection with the performance of services by him in his capacity as a director, rather than as an employee, and, as such, is not subject to tax withholding requirements. In addition, in 1999, Mr. Goldhammer erroneously received a portion of a stock option grant in the form of incentive stock options, which under federal law may only be granted to employees. There can be no assurance, however, that the IRS will agree with the Company’s position and will not assert that the Company is liable for the failure to withhold income and employment taxes with respect to the exercise of such warrants and any stock options by Mr. Goldhammer. If the Company became liable for the failure to withhold taxes on the exercise of such warrants and any stock options by Mr. Goldhammer, the aggregate potential liability, exclusive of any interest or penalties, would be approximately $8,300,000.

The Company has not recognized accruals for penalties and interest that may be imposed with respect to the withholding tax issues previously described and other related contingencies, including the period covered by the statute of limitations and the Company’s determination of certain exercise dates, because it does not believe that losses from such contingencies are probable, or in the event that any taxing authority makes a claim for penalties or interest, the Company believes that it will be able to settle the total amount asserted (including any liability for taxes) for an amount not in excess of the liability for taxes already accrued with respect to the relevant withholding tax issue. With respect to the statute of limitations and the Company’s determination of certain exercise dates, while the Company does not believe a loss is probable, there is a potential additional liability with respect to these issues that may be asserted by a taxing authority. If taxing authorities assert such issues and prevail related to these withholding tax issues and other related contingencies, including penalties, the liability that could be imposed by taxing authorities would be substantial. The potential interest on the withholding tax liabilities recorded on the Consolidated Balance Sheets could be up to a maximum amount of approximately $9,100,000 at September 30, 2005. Potential additional withholding tax liability on other related contingencies amounts to approximately $8,000,000, exclusive of any interest or penalties, and excluding the amount potentially attributable to Mr. Goldhammer noted above.

Inventories—Until February 12, 2004, all costs associated with the manufacturing of ERBITUX were included in research and development expenses when incurred. Effective February 13, 2004, the date after

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the Company received approval from the FDA for ERBITUX, we began to capitalize in inventory the cost of manufacturing ERBITUX for commercial sale and will expense such cost as cost of manufacturing revenue at the time of sale. However, as we sell our existing inventory that was previously expensed, there will be a period of time whereby the Company will reflect manufacturing revenue with minimal cost. The cost of manufacturing revenue reflected in the Company’s operating expenses in 2004 and through the nine months of 2005 therefore, does not reflect full absorption cost of production because a portion of the raw materials, labor and overhead costs incurred to produce the product sold, were previously expensed. Therefore, consistent with 2004, we anticipate that our margin on sales of ERBITUX to our corporate partners will continue to fluctuate from quarter to quarter during 2005. If the Company had capitalized inventory prior to obtaining FDA approval of ERBITUX, the cost basis of the inventory sold would be approximately 90% of manufacturing revenue or a gross margin of approximately 10%, depending on the relative level of sales to BMS and Merck KGaA. We expect that cost of manufacturing revenue will continue to reflect incremental costs as we consume inventory that was partially expensed prior to February 13, 2004. We anticipate that the transition period until we begin to reflect full absorption costs of manufacturing revenue, may take, depending on the demand schedule from our partners, approximately one additional quarter.

Litigation—The Company is currently involved in certain legal proceedings as disclosed in the Notes to the Consolidated Financial Statements. Except for the reserve established as of September 30, 2005 of $1.9 million for legal fee expense indemnification relating to a probable settlement of certain legal proceedings with the Company’s former chief executive officer, no other significant reserve has been established in our financial statements because we do not believe that such a reserve is required to be established at this time, in accordance with Statement of Financial Standards No. 5. However, if in a future period, events in any such legal proceedings render it probable that a loss will be incurred, and if such loss is reasonably estimable at that time, we will establish such a reserve. Thus, it is possible that legal proceedings may have a material adverse impact on the operating results for that period, on our balance sheet or both.

Long-Lived Assets—We review long-lived assets for impairment when events or changes in business conditions indicate that their full carrying value may not be recovered. Assets are considered to be impaired and written down to fair value if expected associated undiscounted cash flows are less than carrying amounts. Fair value is generally determined as the present value of the expected associated cash flows. We have built BB36 and are building BB50, and purchased a material logistics and warehousing facility and an administrative facility. BB36 is dedicated to the clinical and commercial production of ERBITUX and BB50 will be a multi-use production facility. ERBITUX is currently being produced for clinical studies and commercial sale at BB36. The material logistics and warehousing facility includes office space, a storage location and sampling laboratory for ERBITUX. An administrative facility houses the clinical, regulatory, sales, marketing, finance, human resources, project management and MIS departments, as well as certain executive and legal offices and other necessities. Based on management’s current estimates, we expect to recover the carrying value of such assets. Changes in regulatory or other business conditions in the future could change our judgments about the carrying value of these facilities, which could result in the recognition of material impairment losses.

Income Taxes—Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Significant estimates are required in determining our provision for income taxes. As of September 30, 2005, the Company continues to reflect a valuation allowance against its total net deferred tax assets because, more likely than not, its net deferred tax assets will not be realized. Although management believes that the valuation allowance as of September 30, 2005 is appropriate, we expect that as we continue to sell ERBITUX to our corporate partners for commercial use

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and earn royalties and income from operations from the expected commercial sales of ERBITUX, we will need to revise our conclusions regarding the realization of our deferred tax assets due to expected changes in overall levels of pretax earnings. In addition, there may be other factors such as changes in tax laws and future levels of research and development spending that may impact our effective tax rate in the future.

RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

On November 24, 2004 the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 151, Inventory Costs, an amendment of ARB No. 43. This Statement amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing”, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). The provisions of this Statement are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of this accounting pronouncement is not expected to have a material effect on the Company’s consolidated financial statements.

On December 16, 2004 the FASB issued Statement No. 123 (revised 2004), Share-Based Payment (“Statement 123R”). This Statement requires that the cost resulting from all share-based payment transactions be recognized in the financial statements and establishes fair value as the measurement objective in accounting for all share-based payment arrangements. On March 29, 2005 the SEC issued Staff Accounting Bulletin No. 107, Share-Based Payment, which summarizes the views of the staff regarding the interaction between Statement 123R and certain SEC rules and regulations and provides the staff’s views regarding the valuation of share-based payment arrangements for public companies. Statement 123R was originally effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. However, on April 14, 2005 the SEC announced a new rule that allows companies to implement Statement 123R at the beginning of their first fiscal year beginning after June 15, 2005. As such, the Company will adopt Statement 123R in the first quarter of 2006. The adoption of this Statement is expected to have a material effect on the Company’s consolidated financial statements.

RESULTS OF OPERATIONS

Selected financial and operating data for the three and nine months ended September 30, 2005 and 2004 are as follows: (in thousands)

	Three Months Ended September 30,							Nine Months Ended September 30,
	2005		2004		Variance			2005		2004		Variance
Revenues:
License fees and milestone revenue	$	27,146	$	22,958	$	4,188		$	76,171	$	108,604	$	(32,433	)
Manufacturing revenue	10,748		29,952		(19,204		)	29,661		70,252		(40,591		)
Royalty revenue	46,647		34,137		12,510			124,810		69,742		55,068
Collaborative agreement revenue	21,984		10,414		11,570			54,039		32,795		21,244
Total revenues	$	106,525	$	97,461	$	9,064		$	284,681	$	281,393	$	3,288

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2005		2004		Variance		2005		2004			Variance
Operating Expenses:
Research and development	$	28,958	$	17,635	$	11,323	$	74,564	$	56,682		$	17,882
Clinical and regulatory	13,583		7,595		5,988		31,357		20,859			10,498
Marketing, general and administrative	19,463		14,816		4,647		53,919		40,021			13,898
Royalty expense	15,165		9,661		5,504		42,069		19,340			22,729
Cost of manufacturing revenue	3,099		223		2,876		4,948		559			4,389
Discontinuation of small molecule research program	—		—		—		6,200		—			6,200
Other	—		—		—		—		(1,815		)	1,815
Total operating expenses	$	80,268	$	49,930	$	30,338	$	213,057	$	135,646		$	77,411

Three Months Ended September 30, 2005 and 2004

Revenues

License Fees and Milestone Revenue

License fees and milestone revenue for the three months ended September 30, 2005 of $27,146,000 consists of the recognition of up-front and milestone payments received under the Commercial Agreement with BMS and E.R. Squibb of $27,049,000 and recognition of payments received under the development and license agreements with Merck KGaA of $97,000. The increase of $4,188,000 from the comparable period in 2004 is due to increases in clinical development spending by BMS and us. License fees and milestone revenue in 2005 will include the continuing amortization, based on clinical development spending, of the $650 million received thus far from BMS. At a comparable rate of spending from the third quarter of 2005, amortization of milestones received to date should slightly exceed $100 million for the full year of 2005.

Manufacturing Revenue

Manufacturing revenue for the three months ended September 30, 2005 of $10,748,000 consists of sales of ERBITUX to our corporate partners for commercial use. The decrease of $19,204,000 from the comparable period in 2004 is mainly due to lower selling price and lower volume purchases this quarter as compared to the prior period.  In accordance with the Commercial Agreement, we are contractually obligated to sell ERBITUX to BMS at our cost of production plus a 10% markup. We sell bulk inventory to Merck KGaA at our full absorption cost of production. There were no sales of ERBITUX to Merck KGaA for commercial supply during the third quarters of 2005 or 2004. During 2004, the price charged to BMS reflected the weighted average costs of production for inventory previously produced by Lonza and at our BB36 manufacturing plant. During 2004, we depleted all inventory produced by Lonza, therefore our costs in 2005 reflect only costs associated with manufacturing inventory at our BB36 manufacturing facility. Therefore, the sales price to our corporate partners in 2005 is significantly lower than the price we charged our partner in 2004 since our unit cost to manufacture ERBITUX is significantly lower than the cost paid to Lonza for manufacturing ERBITUX. The continuing level of manufacturing revenue in future periods may fluctuate significantly based on market demand, our cost of production, as well as BMS’s required level of safety stock inventory for ERBITUX.

Royalty Revenue

Royalty revenue consists primarily of royalty payments earned on the sale of ERBITUX by our partners, BMS and Merck KGaA. Under our agreement with BMS, we are entitled to royalty payments equal to 39% of BMS’s net sales of ERBITUX in the United States and Canada. Under our agreement with Merck KGaA, we are entitled to royalty payments based on a percentage of gross margin of Merck

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KGaA’s sales of ERBITUX outside the United States and Canada. The increase of $12,510,000 from the comparable period in 2004 is primarily due to an increase in royalty received from BMS of $8,911,000 and an increase in royalty received from Merck in 2005 of approximately $3,551,000. Royalty revenue in the fourth quarter of  2005 will continue to reflect 39% of BMS’ net in-market net sales and a range of 6.5%-7.5% of Merck KGaA’s in-market net sales.

Collaborative Agreement Revenue

Collaborative agreement revenue consists primarily of reimbursements from our partners BMS and E.R. Squibb and Merck KGaA under our collaborative agreements. There are certain categories for which we receive reimbursement from our partners: clinical and regulatory expenses, the cost of ERBITUX supplied to our partners for use in clinical studies, certain marketing and administrative expenses and a portion of royalty expense. During the third quarter of 2005, we earned $21,984,000 in collaborative agreement revenue, of which approximately $10,787,000 represents amounts earned from BMS and E.R. Squibb and approximately $11,194,000 represents amounts earned from Merck KGaA, as compared to $10,414,000 earned in the comparable period in 2004, of which $9,539,000 was earned from BMS and E.R. Squibb and $875,000 was earned from Merck KGaA. The increase in collaborative agreement revenue of $11,570,000 is principally due to an increase in reimbursement for clinical drugs of approximately $10.7 million and an increase of approximately $1.3 million in royalty expense reimbursed by our corporate partners as a result of higher in-market sales. Collaborative agreement revenue in 2005 will continue to include the purchase of ERBITUX for clinical use by our partners, as well as reimbursement of certain regulatory and clinical expenses incurred on behalf of ERBITUX, reimbursement of certain marketing and administrative expenses and reimbursement for royalty expenses, which will approximate 4.5% of US in-market net sales and approximately 1% of net sales outside the U.S.

Expenses

Research and Development

Research and development expenses in the third quarter of 2005 of $28,958,000 increased by approximately $11,323,000 from the comparable period in 2004. The increase is primarily due to shipments of ERBITUX to our partners for clinical studies of approximately $8.0 million and an increase in costs associated with the development of our non-ERBITUX pipeline. Research and development expenses include costs associated with our in-house and collaborative research programs, product and process development expenses, costs to manufacture ERBITUX (until February 12, 2004) and other product candidates and quality assurance and quality control costs. Research and development includes costs that are reimbursable from our corporate partners. Approximately $12,702,000 and $2,014,000 of costs representing research and development expenses for the three months ended September 30, 2005 and 2004, respectively, were reimbursed and included under collaborative agreement revenue since they represent inventory supplied to our partners for use in clinical studies. We estimate that research and development expenses for the full year of 2005 will range between $110-$115 million.

Clinical and Regulatory

Clinical and regulatory expenses in the third quarter of 2005 were $13,583,000, an increase of $5,988,000 from the comparable period in 2004. The increase is due to an increase of approximately $5,170,000 due BMS for reimbursement of clinical expenses and an increase in salaries and benefits of approximately $1,120,000, slightly offset by a decrease in third party clinical trial costs. Clinical and regulatory expenses consist of costs to conduct our clinical studies and associated regulatory activities. Approximately $3,337,000 and $3,399,000 of the costs included in this category for the three months ended September 30, 2005 and 2004, respectively, are reflected as revenues under collaborative agreement revenue since they represent costs that are reimbursable by our corporate partners. Clinical and regulatory

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expenses are expected to be between $48-$50 million for the full year of 2005, as we embark on a number of studies in support of expanded use of ERBITUX as well as Phase I clinical development programs for our pipeline products.

Marketing, General and Administrative

Marketing, general and administrative expenses include marketing and administrative personnel costs, including related facility costs, additional costs to develop internal marketing and field operations capabilities and expenses associated with applying for patent protection for our technology and products. Marketing, general and administrative expenses also include amounts reimbursable from our corporate partners.

Marketing, general and administrative expenses in the three months ended September 30, 2005 amounted to $19,463,000, an increase of $4,647,000 or 31% from the comparable period in 2004. This increase is partly due to increases in salaries and benefits of approximately $1,500,000 due to increased headcount and an increase of approximately $900,000 in professional services fees related to legal, tax consulting and marketing programs. This category also includes a charge related to establishing a legal reserve of approximately $1.9 million for legal fee expense indemnification related to a probable settlement of certain legal proceedings with our former chief executive officer. Certain expenses in this category are reimbursable from our corporate partners. Approximately $411,000 and $812,000 of costs representing marketing and general expenses for the three months ended September 30, 2005 and 2004, respectively, are reimbursed and included in collaborative agreement revenue. Marketing, general and administrative expenses should approximate $68 million in 2005.

Cost of Manufacturing Revenue

Effective February 13, 2004, we began to capitalize in inventory the costs of manufacturing of ERBITUX for sale and will expense such costs as cost of manufacturing revenue at the time of commercial sale. However, as we continue to sell inventory that was previously expensed, we will continue to reflect minimum cost of manufacturing revenue since the majority of the cost of such inventory has already been expensed in prior periods as research and development expenses. Consistent with 2004, we anticipate that our manufacturing revenue margin on sales of ERBITUX to our corporate partners will continue to fluctuate from quarter to quarter until such time as we exhaust all inventory whose costs, or partial costs, was expensed as research and development prior to obtaining FDA approval for ERBITUX. The costs of manufacturing revenue in the third quarter of 2005 reflects a combination of inventory sold with  costs consisting only of  packaging, filling, labeling and shipping and certain inventory with partial costs related to batches that were in work-in-process on February 13, 2004. Cost of manufacturing revenue in the third quarter of 2005 as a percentage of manufacturing revenue increased to 29%, resulting in a  gross margin of approximately 71% as compared to a gross margin in the second quarter of 2005 of 86%. As previously disclosed, as we consume more inventory that was partially expensed, the cost of our inventory will continue to increase until we reach full absorption costs. Consistent with this quarter, the costs of manufacturing revenue in the fourth quarter of 2005 are expected to continue to reflect increased costs as we consume most of the  inventory that was partially expensed prior to February 13, 2004. We expect that the transition period until we begin to reflect full absorption costs of manufacturing revenue, may take, depending on the demand schedule from our partners, approximately one additional quarter.

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Royalty Expense

Royalty expense of $15,165,000 for the three months ended September 30, 2005 increased by $5,504,000 from the comparable period in 2004 due to increases in in-market sales. Royalty expense consists of obligations related to certain licensing agreements related to ERBITUX. Prior to the third quarter of 2005, we were obligated to pay royalties of approximately 12.75% of North American in-market net sales and a low single digit royalty on sales outside of North America, which will increase if sales outside of North America consist of ERBITUX produced in the United States. Beginning in the third quarter of 2005, gross royalty expense has decreased as a percentage of net sales in North America from 12.75% to 12.25% as the result of a reduction in the royalty obligation. We receive reimbursements from our corporate partners of 4.5% on North American net sales and a minimum of 1% on net sales outside of North America. After the first quarter of 2006, gross royalty expense due on North American net sales will decrease to 9.25% and our reimbursement on such sales will decrease to 2.5%. Approximately $5,531,000 and $4,189,000 of royalty expense is reimbursable by our corporate partners and included as collaborative agreement revenue for the three months ended September 30, 2005 and 2004, respectively. We expect that royalty expenses in 2005 for ERBITUX will continue to reflect the same percentages outlined above.

Interest Income and Interest Expense

Interest income for the three months ended September 30, 2005 amounted to $7,025,000, an increase of approximately $1.9 million from the comparable period in 2004. This increase is attributable to increases in interest rates from the comparable period in 2004.

Interest expense for the three months ended September 30, 2005 amounted to $1,577,000, a decrease of approximately $385,000. The decrease is due to the fact that we capitalized more interest in the third quarter of 2005 than in the comparable period of 2004, as a result of an increase in the balance of assets qualifying for interest capitalization.

Provision for Income Taxes

The estimated effective income tax rate for 2005 (assuming no milestone is earned from Bristol-Myers Squibb) is approximately 1.0% excluding the effect of the adjustment resulting from the reconciliation of the prior years’ tax provision to our recently filed tax returns. The estimated effective tax rate for the three months ended September 30, 2005 and for the full year, including the adjustment of approximately $440,000 is approximately 2.4% and 1.5%, respectively, which is less than the federal statutory rate of 35%. The difference from the statutory rate results from the utilization of fully reserved deferred tax assets, primarily the amortization of deferred revenue associated with license fees and milestones, which were taxable in prior periods.

Net Income

For the three months ended September 30, 2005 we had net income of $30,951,000 or $.37 per basic common share and $.35 per diluted common share, compared with net income of $39,783,000 or $.48 per basic and $.44 per diluted common share in the comparable period in 2004. The fluctuation in results was due to the factors noted above.

Nine Months Ended September 30, 2005 and 2004

Revenues

License Fees and Milestone Revenue

License fees and milestone revenue for the nine months ended September 30, 2005 of $76,171,000 consists of the recognition of up-front and milestone payments received under the Commercial Agreement with BMS and E.R. Squibb of $74,882,000 and recognition of payments received under the development

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and license agreements with Merck KGaA of $1,289,000. The decrease of $32,433,000 from the comparable period in 2004 is due to the fact that we received a milestone payment from BMS of $250,000,000 in the first quarter of 2004, when we obtained FDA approval of ERBITUX resulting in incremental amortization of deferred revenue of approximately $43 million related to the actual product research and development costs incurred from inception through December 31, 2003 as a percentage of the estimated total costs to be incurred over the term of the Commercial Agreement with BMS, partly offset by an increase in clinical spend. License fees and milestone revenue in 2005 will include the continuing amortization, based on clinical development spending, of the $650 million received thus far from BMS. At a comparable rate of spending from the third quarter of 2005, amortization of milestones received to date should slightly exceed $100 million for the full year.

Manufacturing Revenue

Manufacturing revenue for the nine months ended September 30, 2005 of $29,661,000 consists of sales of ERBITUX to our corporate partners for commercial use. The decrease of $40,591,000 from the comparable period in 2004 is due to a combination of lower selling price in 2005, the absence of the initial stocking purchases by BMS as it was launching the product in the first quarter of 2004 and lower volume purchases in the third quarter of 2005.  In accordance with the Commercial Agreement, we are contractually obligated to sell ERBITUX to BMS at our cost of production plus a 10% markup. We sell bulk inventory to Merck KGaA at our full absorption cost of production. There were no sales of ERBITUX to Merck KGaA for commercial supply during the nine months ended September 30, 2005 and 2004. During 2004, the price charged to BMS reflected the weighted average costs of production for inventory previously produced by Lonza and at our BB36 manufacturing plant. During 2004, we depleted all inventory produced by Lonza, therefore, our costs in 2005 reflect only costs associated with manufacturing inventory at our BB36 manufacturing facility. Therefore, the sales price to our corporate partners in 2005 is significantly lower than the price we charged our partner in 2004 since our unit cost to manufacture ERBITUX is significantly lower than the cost paid to Lonza for manufacturing ERBITUX. The continuing level of manufacturing revenue in future periods may fluctuate significantly based on market demand, our cost of production, as well as BMS’s required level of safety stock inventory for ERBITUX.

Royalty Revenue

Royalty revenue consists primarily of royalty payments earned on the sale of ERBITUX by our partners, BMS and Merck KGaA. Under our agreement with BMS, we are entitled to royalty payments equal to 39% of BMS’s in-market net sales of ERBITUX in the United States and Canada. Under our agreement with Merck KGaA, we are entitled to royalty payments based on a percentage of gross margin of Merck KGaA’s sales of ERBITUX outside the United States and Canada. The increase of $55,068,000 from the comparable period in 2004 is primarily due to an increase in royalty received from BMS of $46,354,000 and an increase in royalty received from Merck in 2005 of approximately $8,684,000 as a result of an increase in  net sales. Royalty revenue in the fourth quarter of 2005 will continue to reflect 39% of BMS’ in-market net sales and  a range of 6.5%-7.5% of Merck KGaA’s in-market net sales.

Collaborative Agreement Revenue

Collaborative agreement revenue consists primarily of reimbursements from our partners BMS and E.R. Squibb and Merck KGaA under our collaborative agreements. There are certain categories for which we receive reimbursement from our partners: clinical and regulatory expenses, the cost of ERBITUX supplied to our partners for use in clinical studies, certain marketing and administrative expenses and a portion of royalty expense. During the nine months ended September 30, 2005, we earned $54,039,000 in collaborative agreement revenue, of which approximately $31,891,000 represents amounts earned from

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BMS and E.R. Squibb and approximately $22,136,000 represents amounts earned from Merck KGaA, as compared to $32,795,000 earned in the comparable period in 2004, of which $28,087,000 was earned from BMS and E.R. Squibb and $4,657,000 was earned from Merck KGaA. The increase in collaborative agreement revenue of $21,244,000 is principally due to an increase in reimbursement for clinical drugs of approximately $13.7 million and an increase of approximately $6.7 million in royalty expense reimbursed by our corporate partners as a result of higher in-market sales. Collaborative agreement revenue in 2005 will continue to include the purchase of ERBITUX for clinical use by our partners, as well as reimbursement of certain regulatory and clinical expenses incurred on behalf of ERBITUX, reimbursement of certain marketing and administrative expenses and reimbursement for royalty expenses, which will approximate 4.5% of US net in-market sales and approximately 1% of net sales outside the U.S.

Expenses

Research and Development

Research and development expenses for the nine months ended September 30, 2005 of $74,564,000 increased by approximately $17,882,000 from the comparable period in 2004. The increase is primarily due to shipments of ERBITUX to our partners for clinical studies of approximately $11.4 million and an increase in costs associated with the development of our non-ERBITUX pipeline. Research and development expenses include costs associated with our in-house and collaborative research programs, product and process development expenses, costs to manufacture ERBITUX (until February 12, 2004) and other product candidates and quality assurance and quality control costs. Research and development includes costs that are reimbursable from our corporate partners. Approximately $26,217,000 and $12,525,000 of costs representing research and development expenses for the nine months ended September 30, 2005 and 2004, respectively, were reimbursed and included under collaborative agreement revenue since they represent inventory supplied to our partners for use in clinical studies. We estimate that research and development expenses for the full year of 2005 will range between $110-$115 million.

Clinical and Regulatory

Clinical and regulatory expenses in the nine months ended September 30, 2005 were $31,357,000, an increase of $10,498,000 from the comparable period in 2004. The increase is due to an increase of approximately $7.3 million due BMS for reimbursement of clinical expenses, an increase in salaries and benefits of approximately $2.7 million, and an increase of approximately $1.4 million associated with payments to third parties for clinical trials, partially offset by a decrease of approximately $1.3 million of stock option compensation expense. Clinical and regulatory expenses consist of costs to conduct our clinical studies and associated regulatory activities. Approximately $11,266,000 and $9,746,000 of the costs included in this category for the nine months ended September 30, 2005 and 2004, respectively, are reflected as revenues under collaborative agreement revenue since they represent costs that are reimbursable by our corporate partners. Clinical and regulatory expenses in 2005 are expected to be between  $48-$50 million for the full year, as we embark on a number of studies in support of expanded use of ERBITUX, as well as Phase I clinical development programs for our pipeline products.

Marketing, General and Administrative

Marketing, general and administrative expenses include marketing and administrative personnel costs, including related facility costs, additional costs to develop internal marketing and field operations capabilities and expenses associated with applying for patent protection for our technology and products. Marketing, general and administrative expenses also include amounts reimbursable from our corporate partners.

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Marketing, general and administrative expenses in the nine months ended September 30, 2005 amounted to $53,919,000, an increase of $13,898,000 or 35.0% from the comparable period in 2004. This increase is due to increases in salaries and benefits of approximately $6,300,000 due to increased headcount, an increase of approximately $6,600,000 in professional services fees related to legal, tax consulting and marketing programs and to a charge related to a legal reserve recorded in the third quarter of 2005, of approximately $1.9 million for legal fee expense indemnification related to a probable settlement of certain legal proceedings with our former chief executive officer, partly offset by decreases in various other administrative expenses. Certain expenses in this category are reimbursable from our corporate partners. Approximately $1,525,000 and $2,178,000 of costs representing marketing and general expenses for the nine months ended September 30, 2005 and 2004, respectively, are reimbursed and included in collaborative agreement revenue. Marketing, general and administrative expenses should approximate $68 million in 2005.

Cost of Manufacturing Revenue

Effective February 13, 2004, we began to capitalize in inventory the costs of manufacturing of ERBITUX for sale and will expense such costs as cost of manufacturing revenue at the time of commercial sale. However, as we continue to sell inventory that was previously expensed, we will continue to reflect minimum cost of manufacturing revenue since the majority of the cost of such inventory has already been expensed in prior periods as research and development expenses. Consistent with 2004, we anticipate that our manufacturing revenue margin on sales of ERBITUX to our corporate partners will continue to fluctuate from quarter to quarter until such time as we exhaust all inventory whose costs was expensed as research and development prior to obtaining FDA approval for ERBITUX. The costs of manufacturing revenue for the nine months ended September 30, 2005 reflects costs associated with packaging, filling, labeling and shipping, with a portion of the inventory shipped particularly in the third quarter of 2005, reflecting incremental costs as we consume inventory that were in work-in-process on February 13, 2004.  Gross margin for the nine months ended September 30, 2005 amounted to 83% as compared to gross margin for the six months ended June 30, 2005 which amounted to 90%, which is consistent with our expectation that cost of manufacturing will gradually increase as we consume all inventory that was partially expensed. Consistent with this quarter, the costs of manufacturing revenue in the fourth quarter of 2005 are expected to continue to reflect increased costs as we consume most of the inventory that was partially expensed prior to February 13, 2004. We expect that the transition period until we begin to reflect full absorption costs of manufacturing revenue, may take, depending on the demand schedule from our partners, approximately one additional quarter.

Royalty Expense

Royalty expense of $42,069,000 for the nine months ended September 30, 2005 increased by $22,729,000 from the comparable period in 2004 due to increases in in-market sales. Royalty expense consists of obligations related to certain licensing agreements related to ERBITUX. Prior to the third quarter of 2005, we were obligated to pay royalties of approximately 12.75% of North American net sales and a low single digit royalty on sales outside of North America, which will increase if sales outside of North America consist of ERBITUX produced in the United States. Beginning in the third quarter of 2005, gross royalty expense has decreased as a percentage of net sales in North America from 12.75% to 12.25% as the result of a reduction in the royalty obligation. We receive reimbursements from our corporate partners of 4.5% on North American net sales and a minimum of 1% on net sales outside of North America. After the first quarter of 2006, gross royalty expense due on North American net sales will decrease to 9.25% and our reimbursement on such sales will decrease to 2.5%. Approximately $15,019,000 and $8,292,000 of royalty expense is reimbursable by our corporate partners and included as collaborative agreement revenue for the nine months ended September 30, 2005 and 2004, respectively. We expect that

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royalty expenses in the fourth quarter of 2005 for ERBITUX will continue to reflect the same percentages outlined above.

Discontinuation of Small Molecule Research Program

On May 11, 2005, the Company announced a plan to discontinue its small molecule research program. This decision was made after evaluating the Company’s investment in such program against the time horizon before commercial benefits would be realized.  As a result of this decision, the Company recorded in the second quarter of 2005 approximately $6,200,000 of costs associated with the discontinuation of this program. Such costs include approximately $2,260,000 of costs related to severance for 45 employees that were terminated, $3,880,000 of costs related to the write-off of fixed assets used in such program and approximately $60,000 of contract termination costs related to the cancellation of the lease at the Brooklyn facility where the employees were conducting such research. The disposition of this program is substantially complete and the Company expects the majority of the remaining termination benefits to be paid by December 31, 2005.

Interest Income and Interest Expense

Interest income for the nine months ended September 30, 2005 amounted to $20,575,000, an increase of approximately $12.5 million from the comparable period in 2004. This increase is attributable to increases in interest rates from the comparable period in 2004 as well as a higher average cash and securities balance for the nine months ended September 30, 2005 to the comparable period in 2004,as a result of receiving $600,000,000 from the issuance of convertible debt in May 2004 and receiving $250 million from BMS in March of 2004.

Interest expense for the first nine months ended September 30, 2005 amounted to $5,073,000, a decrease of approximately $1.4 million. The decrease is due to lower interest rate than in the comparable period of 2004, partly offset by an increase in debt outstanding.

Provision for Income Taxes

The estimated effective income tax rate for 2005 (assuming no milestone is earned from Bristol-Myers Squibb) is approximately 1.0% excluding the effect of the adjustment resulting from the reconciliation of the prior years’ tax provision to our recently filed tax returns. The estimated effective tax rate for 2005 including the adjustment of approximately $440,000 is approximately 1.5%, which is less than the federal statutory rate of 35%. The difference from the statutory rate results from the utilization of fully reserved deferred tax assets, primarily the amortization of deferred revenue associated with license fees and milestones, which were taxable in prior periods.

Net Income

For the nine months ended September 30, 2005 we had net income of $85,802,000 or $1.03 per basic common share and $.98 per diluted common share, compared with net income of $126,831,000 or $1.62 per basic and $1.45 per diluted common share in the comparable period in 2004. The fluctuation in results was due to the factors noted above.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2005, our principal sources of liquidity consisted of cash and cash equivalents and securities available for sale of approximately $790 million. Historically, we have financed our operations through a variety of sources, most significantly through the issuance of public and private equity and convertible notes, license fees and milestone payments and reimbursements from our corporate partners. Since the approval of ERBITUX on February 12, 2004, we began to generate royalty revenue and

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manufacturing revenue from the commercial sale of ERBITUX by our corporate partners and generated income from operations in 2004 and in the nine months ended September 30, 2005. As we continue to generate income, our cash flows from operating activities are expected to increase as a source to fund our operations.

SUMMARY OF CASH FLOWS

	Nine Months Ended September 30,
	2005			2004			Variance
	(in thousands)
Cash provided by (used in):
Operating activities.	$	(67,524	)	$	218,768		$	(286,292	)
Investing activities	(19,230		)	(799,822		)	780,592
Financing activities.	14,096			657,850			(643,754		)
Net (decrease) increase in cash and cash equivalents.	$	(72,658	)	$	76,796		$	(149,454	)

Historically our cash flows from operating activities have fluctuated significantly due to the nature of our operations and the timing of our cash receipts. During the nine months ended September 30, 2005, we did not generate positive cash flows from operations but used approximately $68 million of cash in operating activities mainly due to the payment of $50 million related to the securities class action litigation that we settled in January 2005 and approximately $30 million of royalty and other license related payments to Genentech and Centocor related to 2004, for license agreements that we finalized during January 2005, partially offset by cash generated from operations. As we have noted in the past, we expect significant fluctuations in our operating cash flows as we continue to transform from a research and development company to a commercial operating entity.

Our primary sources and uses of cash under investing activities consist of purchases and sales activity in our investment portfolio, which we manage based on our liquidity needs, and cash used for capital expenditures. During the nine months ended September 30, 2005, our net cash used for investing activities of $19.2 million consisted of  capital expenditures of $69.8 million, offset by net cash generated from sales and maturities in our investment portfolio of approximately $50.6 million. During 2004, we invested a significant amount of cash in securities as a result of raising $600 million through the issuance of convertible bonds and also through the receipt of $250 million from BMS as a result of obtaining approval of ERBITUX. In 2005, we used some of the proceeds from sales and maturities of securities, rather than re-invest such funds, in order to pay for some operating expenses, such as the $50 million payment made in the first quarter, relating to the securities class action litigation. We expect that in 2005, capital spending will range from $90-$105 million including approximately $22 million of validation and commissioning costs associated with our multiple product manufacturing facility (“BB50”).

Net cash flows provided from financing activities in the nine months ended September 30, 2005 decreased by approximately $644 million mainly due to the fact that in 2004, we raised $600 million from the issuance of convertible bonds. In addition, this category has also decreased due to a decrease in the amount of cash generated from the exercise of stock options by employees.

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We believe that our existing cash and cash equivalents,  securities available for sale and our cash generated from operating activities will provide us with sufficient liquidity to support our operations at least through the fourth quarter of 2006. We are also entitled to reimbursement for certain marketing, royalty expense, and research and development expenditures and certain other payments, some of which are payable contingent upon the achievement of research and development and regulatory milestones. There can be no assurance that we will achieve these milestones. Our future working capital and capital requirements will depend upon numerous factors, including, but not limited to:

·progress and cost of our research and development programs, pre-clinical testing and clinical studies;

·the amount and timing of revenues earned from the commercial sale of ERBITUX;

·our corporate partners fulfilling their obligations to us;

·timing and cost of seeking and obtaining additional regulatory approvals;

·level of resources that we devote to the development of marketing and field operations capabilities;

·costs involved in filing, prosecuting and enforcing patent claims; and legal costs associated with the outcome of outstanding legal proceedings and investigations;

·status of competition; and

·our ability to maintain existing corporate collaborations and establish new collaborative arrangements with other   companies to provide funding to support these activities.

The table below presents our contractual obligations and commercial commitments as of September 30, 2005: (in thousands)

			Payments due by Year
	Total		2005		2006		2007		2008		2009		2010 and Thereafter
Long-term debt.	$	600,000	$	—	$	—	$	—	$	—	$	—	$	600,000
Interest on long-term debt	156,750		5,156		8,250		8,250		8,250		8,250		118,594
Operating leases obligations.	72,001		1,035		5,215		5,304		4,146		4,185		52,116
Purchase obligations.	4,487		4,487		—		—		—		—		—
Contract services obligations	16,380		5,040		3,780		1,620		1,350		1,620		2,970
Construction obligations	9,525		9,525		—		—		—		—		—
Total	$	859,143	$	25,243	$	17,245	$	15,174	$	13,746	$	14,055	$	773,680

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Our holdings of financial instruments comprise a mix of U.S. dollar denominated securities that may include U.S. corporate debt, foreign corporate debt, U.S. government debt, foreign government debt, agency debt and commercial paper. All such instruments are classified as securities available for sale. Generally, we do not invest in portfolio equity securities, commodities, foreign exchange contracts or use financial derivatives for trading purposes. Our debt security portfolio represents funds held temporarily pending use in our business and operations. We manage these funds accordingly. We seek reasonable assuredness of the safety of principal and market liquidity by investing in investment grade fixed income

46

securities while at the same time seeking to achieve a favorable rate of return. Our market risk exposure consists principally of exposure to changes in interest rates. Our holdings are also exposed to the risks of changes in the credit quality of issuers. We invest in securities that have a range of maturity dates.

The table below presents the principal amounts and related weighted average interest rates by year of maturity for our investment portfolio as of September 30, 2005: (in thousands, except interest rates)

	2005			2006			2007			2008			2009			2010 and Thereafter				Total			Fair Value
Fixed Rate	$	15,138		$	160,004		$	202,400		$	100,000		$	55,000			$	20,000		$	552,542		$	544,891
Average Interest Rate	2.25		%	3.00		%	3.49		%	3.86		%	4.33		%		4.54		%	3.50		%
Variable Rate(1)	194,315			20,150			10,000			1,804			—				11,859			238,128			237,969
Average Interest Rate	3.76		%	3.96		%	4.00		%	4.24		%	—				4.05		%	3.81		%
	$	209,453		$	180,154		$	212,400		$	101,804		$	55,000			$	31,859		$	790,670		$	782,860

(1)These holdings consist of U.S. corporate and foreign corporate floating rate notes. Interest on the securities is adjusted monthly, quarterly or semi-annually, depending on the instrument, using prevailing interest rates. These holdings are highly liquid and we consider the potential for loss of principal to be minimal.

Our outstanding 1³/₈% fixed rate convertible senior notes in the principal amount of $600,000,000 due May 15, 2024 are convertible into our common stock at a conversion price of $94.69 per share, subject to certain restrictions as outlined in the indenture agreement. The fair value of fixed interest rate instruments is affected by changes in interest rates and in the case of the convertible notes by changes in the price of our common stock as well. The fair value of the convertible senior notes was approximately $500,250,000 at September 30, 2005.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information that we are required to disclose in the reports that we file or submit under the Exchange Act.

Changes In Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the three months ended September 30, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II.

OTHER INFORMATION

Item 1.Legal Proceedings

A.Litigation

1.Federal Securities Actions

As previously reported, beginning in January 2002, a number of complaints asserting claims under the federal securities laws against the Company and certain of the Company’s directors and officers were filed in the U.S. District Court for the Southern District of New York. Those actions were consolidated under the caption Irvine v. ImClone Systems Incorporated, et al., No. 02 Civ. 0109 (RO). In the corrected consolidated amended complaint plaintiffs asserted claims against the Company, its former President and Chief Executive Officer, Dr. Samuel D. Waksal, its former Chief Scientific Officer and then-President and Chief Executive Officer, Dr. Harlan W. Waksal, and several of the Company’s other present or former officers and directors, for securities fraud under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5, on behalf of a purported class of persons who purchased the Company’s publicly traded securities between March 27, 2001 and January 25, 2002. The complaint also asserted claims against Dr. Samuel D. Waksal under section 20A of the Exchange Act on behalf of a separate purported sub-class of purchasers of the Company’s securities between December 27, 2001 and December 28, 2001. The complaint generally alleged that various public statements made by or on behalf of the Company or the other defendants during 2001 and early 2002 regarding the prospects for FDA approval of ERBITUX® were false or misleading when made, that the individual defendants were allegedly aware of material non-public information regarding the actual prospects for ERBITUX at the time that they engaged in transactions in the Company’s common stock and that members of the purported stockholder class suffered damages when the market price of the Company’s common stock declined following disclosure of the information that allegedly had not been previously disclosed. The complaint sought to proceed on behalf of the alleged classes described above, sought monetary damages in an unspecified amount and sought recovery of plaintiffs’ costs and attorneys’ fees. On January 24, 2005, the Company announced that it had reached an agreement in principle to settle the consolidated class action for a cash payment of $75 million, a portion of which would be paid by the Company’s insurers. The parties signed a definitive stipulation of settlement as of March 9, 2005. As provided for under the stipulation of settlement, on March 11, 2005, the Company paid $50 million into an escrow account, subject to Court approval of the proposed settlement. On July 29, 2005 the Court approved the proposed settlement. On August 5, 2005, the Company paid the remaining $25 million into the escrow account, with such funds to be held and distributed pursuant to the terms of the settlement documents. As of September 30, 2005, the Company had received from its insurers $20.5 million with respect to these matters, and does not anticipate receiving any further such amounts. The foregoing $20.5 million includes $8.75 million, less attorneys fees of $875,000, that was paid to the Company under the derivative settlement discussed below.

2.Derivative Actions

As previously reported, beginning on January 13, 2002, and continuing thereafter, nine separate purported shareholder derivative actions were filed against members of the Company’s board of directors, certain of the Company’s present and former officers, and the Company, as nominal defendant, advancing claims based on allegations similar to the allegations in the federal securities class action complaints. Four of these derivative cases were filed in the Delaware Court of Chancery and have been consolidated in that court under the caption In re ImClone Systems Incorporated Derivative Litigation, Cons. C.A. No. 19341-NC. Three of these derivative actions were filed in New York State Supreme Court in Manhattan. All of these state court actions have been stayed in deference to the proceedings in the U.S. District Court for the Southern District of New York, which have been consolidated under the caption In

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re ImClone Systems, Inc. Shareholder Derivative Litigation, Master File No. 02 CV 163 (RO). A supplemental verified consolidated amended derivative complaint in these consolidated federal actions was filed on August 8, 2003. It asserted, purportedly on behalf of the Company, claims including breach of fiduciary duty by certain current and former members of the Company’s board of directors, among others, based on allegations including that they failed to ensure that the Company’s disclosures relating to the regulatory and marketing prospects for ERBITUX were not misleading and that they failed to maintain adequate controls and to exercise due care with regard to the Company’s ERBITUX application to the FDA. On January 9, 2004, the Company filed a motion to dismiss the complaint due to plaintiffs’ failure to make a pre-suit demand on the Company’s board of directors to institute suit or to allege grounds for concluding that such a demand would have been futile. The individual defendants filed motions on the same date, both joining in the Company’s motion and seeking to dismiss the complaint for failure to state a claim. On January 24, 2005, the Company announced that it had reached an agreement in principle to settle the consolidated derivative action. The parties entered into a definitive stipulation of settlement on March 14, 2005, which was subject to Court approval. On July 29, 2005, the Court approved the proposed settlement. Thereafter, the Company was paid $8.75 million by its insurers, which the Company has contributed toward the settlement of the Irvine securities class action described above after deducting $875,000 for Court awarded plaintiffs’ attorney’s fees and expenses.

B.Government Inquiries and Investigations

As previously reported, the Company received subpoenas and requests for information in connection with an investigation by the SEC relating to the circumstances surrounding the disclosure of the FDA “refusal to file” letter dated December 28, 2001, and trading in the Company’s securities by certain ImClone Systems insiders in 2001. The Company also received subpoenas and requests for information pertaining to document retention issues in 2001 and 2002, and to certain communications regarding ERBITUX in 2000. On June 19, 2002, the Company received a written “Wells Notice” from the staff of the SEC, indicating that the staff of the SEC is considering recommending that the SEC bring an action against the Company relating to the Company’s disclosures immediately following the receipt of a “refusal to file” letter from the FDA on December 28, 2001 for the Company’s BLA for ERBITUX. The Company filed a Wells submission on July 12, 2002 in response to the staff’s Wells Notice. There have been no recent developments in connection with this SEC investigation.

In January 2003, New York State notified the Company that the Company was liable for the New York State and City income taxes that were not withheld because one or more the Company’s employees who exercised certain non-qualified stock options in 1999 and 2000 failed to pay New York State and City income taxes for those years. On March 13, 2003, the Company entered into a closing agreement with New York State, paying $4,500,000 to settle the matter. The Company believes that substantially all of the underpayment of New York State and City income tax identified by New York State is attributable to the exercise of non-qualified stock options by the Company’s former President and Chief Executive Officer, Dr. Samuel D. Waksal. At the same time, the Company informed the IRS, the SEC and the United States Attorney’s Office, responsible for the prosecution of Dr. Samuel D. Waksal, of this issue. In order to confirm whether the Company’s liability in this regard was limited to Dr. Samuel D. Waksal’s failure to pay income taxes, the Company contacted current and former officers and employees who had exercised non-qualified stock options to confirm that those individuals had properly reported and paid their personal income tax liabilities for the years 1999 and 2000 in which they exercised options, which would reduce or eliminate the Company’s potential liability for failure to withhold income taxes on the exercise of those options. In the course of doing so, the Company became aware of another potential income and employment tax withholding liability associated with the exercise of certain warrants granted in the early years of the Company’s existence that were held by certain former officers, directors and employees, including the Company’s former President and Chief Executive Officer, Samuel D. Waksal, the Company’s former General Counsel, John B. Landes, the Company’s former Chief Scientific Officer,

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Harlan W. Waksal, and the Company’s former director and Chairman of the Board, Robert F. Goldhammer. Again, the Company promptly informed the IRS, the SEC and the United States Attorney’s Office of this issue. The Company also informed New York State of this issue. On June 17, 2003, New York State notified the Company that based on this issue, they were continuing a previously conducted audit and were evaluating the terms of the closing agreement to determine whether it should be re-opened. On March 31, 2004, the Company entered into a new closing agreement pursuant to which the Company paid New York State an additional $1,000,000 in full satisfaction of all the deficiencies and determinations of withholding taxes for the years 1999-2001. Therefore, the Company has eliminated the liability of $2,815,000 primarily attributable to New York State withholding taxes on stock options and warrants exercised by Dr. Samuel D. Waksal and has recognized a benefit of $1,815,000 as a recovery in the Consolidated Statements of Operations in the first quarter of 2004.

The IRS has commenced audits of the Company’s income tax and employment tax returns for tax years 1999 through 2001. The Company has responded to all requests for information and documents received to date from the IRS and is awaiting further requests or action from the IRS.

On March 31, 2003, the Company received notification from the SEC that it was conducting an informal inquiry into the matters discussed above and on April 2, 2003, the Company received a request from the SEC for the voluntary production of related documents and information. The Company is cooperating fully with this SEC inquiry. There have been no developments in connection with this SEC informal inquiry since April 2003.

The Company has not recognized withholding tax liabilities in respect of exercises of certain warrants by Robert F. Goldhammer, one of the four former officers or directors to whom warrants were issued and previously treated as non-compensatory warrants. Based on the Company’s investigation, it believes that, although such warrants were compensatory, such warrants were received by Mr. Goldhammer in connection with the performance of services by him in his capacity as a director, rather than as an employee, and, as such, are not subject to tax withholding requirements. In addition, in 1999, Mr. Goldhammer erroneously received a portion of a stock option grant in the form of incentive stock options, which under federal law may only be granted to employees. There can be no assurance, however, that the taxing authorities will agree with the Company’s position and will not assert that the Company is liable for the failure to withhold income and employment taxes with respect to the exercise of such warrants and any stock options by Mr. Goldhammer. If the Company became liable for the failure to withhold taxes on the exercise of such warrants and any stock options by Mr. Goldhammer, the aggregate potential liability, exclusive of any interest or penalties, would be approximately $8,300,000.

The Company has not recognized accruals for penalties and interest that may be imposed with respect to the withholding tax issues previously described and other related contingencies, including the period covered by the statute of limitations and the Company’s determination of certain exercise dates, because it does not believe that losses from such contingencies are probable, or in the event that any taxing authority makes a claim for penalties or interest, the Company believes that it will be able to settle the total amount asserted (including any liability for taxes) for an amount not in excess of the liability for taxes already accrued with respect to the relevant withholding tax issue. With respect to the statute of limitations and the Company’s determination of certain exercise dates, while the Company does not believe a loss is probable, there is a potential additional liability with respect to these issues that may be asserted by a taxing authority. If taxing authorities assert such issues and prevail related to these withholding tax issues and other related contingencies, including penalties, the liability that could be imposed by taxing authorities would be substantial. The potential interest on the withholding tax liabilities recorded on the Consolidated Balance Sheets could be up to a maximum amount of approximately $9,100,000 at September 30, 2005. Potential additional withholding tax liability on other related contingencies amounts to approximately $8,000,000, exclusive of any interest or penalties, and excluding the amount potentially attributable to Mr. Goldhammer noted above.

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C.Actions Against Dr. Samuel D. Waksal

As previously reported, on August 14, 2002, after the federal grand jury indictment of Dr. Samuel D. Waksal had been issued but before Dr. Samuel D. Waksal’s guilty plea to certain counts of that indictment, the Company filed an action in New York State Supreme Court seeking recovery of certain compensation, including advancement of certain defense costs, that the Company had paid to or on behalf of Dr. Samuel D. Waksal and cancellation of certain stock options. That action was styled ImClone Systems Incorporated v. Samuel D. Waksal, Index No. 02/602996. On July 25, 2003, Dr. Samuel D. Waksal filed a Motion to Compel Arbitration seeking to have all claims in connection with the Company’s action against him resolved in arbitration. By order dated September 19, 2003, the Court granted Dr. Samuel D. Waksal’s motion and the action was stayed pending arbitration. On September 25, 2003, Dr. Samuel D. Waksal submitted a Demand for Arbitration with the American Arbitration Association (the “AAA”), by which Dr. Samuel D. Waksal asserts claims to enforce the terms of his separation agreement, including provisions relating to advancement of legal fees, expenses, interest and indemnification, for which Dr. Samuel D. Waksal claims unspecified damages of at least $10 million. The Demand for Arbitration also seeks to resolve the claims that the Company asserted in the New York State Supreme Court action. On November 7, 2003, the Company filed an Answer and Counterclaims by which the Company denied Dr. Samuel D. Waksal’s entitlement to advancement of legal fees, expenses and indemnification, and asserted claims seeking recovery of certain compensation, including stock options, cash payments and advancement of certain defense costs that the Company had paid to or on behalf of Dr. Samuel D. Waksal. In response, on December 15, 2003, Dr. Samuel D. Waksal filed a Reply to Counterclaims.

As previously reported, on March 10, 2004, the Company commenced a second action against Dr. Samuel D. Waksal in the New York State Supreme Court. That action is styled ImClone Systems Incorporated v. Samuel D. Waksal, Index No. 04/600643. By this action, the Company seeks the return of more than $21 million that the Company paid to Dr. Samuel D. Waksal, as proceeds from stock option exercises, which the Company alleges he was expected to pay over to federal, state and local tax authorities in satisfaction of his tax obligations arising from certain exercises between 1999 and 2001 of warrants and non-qualified stock options. Specifically, by this action, the Company seeks to recover: (a) $4.5 million that the Company paid to the State of New York in respect of exercises of non-qualified stock options and certain warrants in 2000; (b) at least $16.6 million that the Company paid to Samuel D. Waksal in the form of ImClone common stock, in lieu of withholding federal income taxes from exercises of non-qualified stock options and certain warrants in 2000; and (c) approximately $1.1 million that the Company paid in the form of ImClone common stock to Samuel D. Waksal and his beneficiaries, in lieu of withholding federal, state and local income taxes from certain warrant exercises in 1999-2001. The complaint asserts claims for unjust enrichment, common law indemnification, moneys had and received and constructive trust. On June 18, 2004, Dr. Samuel D. Waksal filed an Answer to the Company’s Complaint.

The Company and Dr. Samuel D. Waksal have entered into an agreement in principle to settle the foregoing actions, providing for, among other things,  judgments in both actions to be obtained in the Company’s favor. The settlement would include the payment of director and officer legal fee expense indemnification by the Company, for which the Company recorded a reserve of approximately $1.9 million in the third quarter of 2005.

D.Intellectual Property Litigation

As previously reported, on October 28, 2003, a complaint was filed by Yeda Research and Development Company Ltd. (“Yeda”) against ImClone Systems and Aventis Pharmaceuticals, Inc. in the U.S. District Court for the Southern District of New York (03 CV 8484). This action alleges and seeks that three individuals associated with Yeda should also be named as co-inventors on U.S. Patent No. 6,217,866. On June 7, 2005, Yeda amended their U.S. complaint to seek sole inventorship of the subject patent. On November 4, 2005, the Court denied the Company’s motion for summary judgment with respect to this

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matter, as filed with the Court on June 24, 2005. The Company is vigorously defending against the claims asserted in this action. The Company is unable to predict the outcome of this action at the present time.

As previously reported, on March 25, 2004, an action was filed in the United Kingdom Patent Office entitled Referrer’s Statement requesting transfer of co-ownership and amendment of patent EP (UK) 0 667 165 to add three Yeda employees as inventors. Also on March 25, 2004, a German action entitled Legal Action was filed in the Munich District Court I, Patent Litigation Division, seeking to add three Yeda employees as inventors on patent EP (DE) 0 667 165. The Company was not named as a party in these actions that relate to the European equivalent of U.S. Patent No. 6,217,866 discussed above; accordingly, the Company has intervened in the German and the U.K. actions. On June 29, 2005, Yeda sought to amend their pleadings in the United Kingdom to seek sole inventorship. Additionally, on or about March 25, 2005 and March 29, 2005, respectively, Yeda filed legal actions in Austria and France against both Aventis and ImClone Systems seeking full inventorship of EP (AU) 0 667 165 and EP (FR) 0 667 165, as well as payment of legal costs and fees.

As previously reported, on May 4, 2004, a complaint was filed against the Company by Massachusetts Institute of Technology (“MIT”) and Repligen Corporation (“Repligen”) in the U.S. District Court for the District of Massachusetts (04-10884 RGS). This action alleges that ERBITUX infringes U.S. Patent No. 4,663,281, which is owned by MIT and exclusively licensed to Repligen. The Company is vigorously defending against claims asserted in this action. Fact discovery is ongoing. The Company is unable to predict the outcome of this action at the present time.

No reserve has been established in the financial statements for any of the Yeda or MIT and Repligen actions because the Company does not believe that such a reserve is required to be established at this time under Statement of Financial Accounting Standards No. 5.

As previously disclosed, the Company is developing a fully human monoclonal antibody, referred to as IMC-11F8, which it intends to commercialize outside the United States and Canada. The Company believes it has the right to do so under its existing development and license agreement with Merck KGaA. However, Merck KGaA has advised the Company that it believes that IMC-11F8 could be covered under the development and license agreement with Merck KGaA and that it could therefore have the exclusive rights to market IMC-11F8 outside the United States and Canada and co-exclusive development rights in Japan, for which it would pay the same royalty as it pays for ERBITUX. See “Corporate Collaborations—Collaborations with Merck KGaA” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. The Company believes that IMC-11F8 is not covered under the Merck KGaA development and license agreement. In agreement with Merck KGaA, the Company submitted this dispute to binding arbitration through an expedited process outside of the provisions of the development and license agreement. If successful in the arbitration, Merck KGaA averred that it is entitled to certain unspecified damages under the development and license agreement. Merck KGaA has subsequently taken the position that the expedited arbitration provision is no longer valid and the Company has sued Merck KGaA in federal court in the Southern District of New York to either enforce the arbitration provisions previously agreed to or to have the court decide the question of whether IMC-11F8 is or is not covered under the development and license agreement with Merck KGaA. While the Company intends to vigorously defend its position as it relates to IMC-11F8 in arbitration, in federal court or any other form of dispute resolution, there can be no assurance that its position will prevail, and it is unable at this time to predict the outcome of these proceedings. No reserve has been established in the financial statements for these proceedings because the Company does not believe that such a reserve is required to be established at this time under Statement of Financial Accounting Standards No. 5.

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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable

Item 3.Defaults upon Senior Securities

Not applicable

Item 4.Submission of Matters to a Vote of Security Holders

Not applicable

Item 5.Other Information

Although not required by the SEC’s rules and regulations to be disclosed in a current report on Form 8-K, Section 11 of the Company’s Code of Business Conduct and Ethics (the “Code”) requires the Company to disclose in this Quarterly Report on Form 10-Q that, on September 16, 2005, the Board of Directors of the Company approved a limited waiver of the conflict of interest provisions of the Code to allow Mr. Ronald Martell, Senior Vice President, Commercial Operations of the Company, to join the Board of Directors of Bioaccelerate Holdings, Inc., a pharmaceutical development organization, while continuing to perform his current duties at the Company.

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Item 6.Exhibits

Exhibit No.	Description	Incorporation by Reference
3.1	Certificate of Incorporation, as amended through December 31, 1998	D (3.1)
3.2	Amendment dated June 4, 1999 to the Company’s Certificate of Incorporation, as amended	H (3.1A)
3.3	Amendment dated June 12, 2000 to the Company’s Certificate of Incorporation, as amended	K (3.1A)
3.4	Amendment dated August 9, 2002 to the Company’s Certificate of Incorporation, as amended	Q (3.1C)
3.5	Amended and Restated By-Laws of the Company	S (3.2)
4.1	Rights Agreement dated as of February 15, 2002 between the Company and EquiServe Trust Company, N.A., as Rights Agent	M (99.2)
4.2	Stockholder Agreement, dated as of September 19, 2001, among Bristol-Myers Squibb Company, Bristol-Myers Squibb Biologics Company and the Company	L (99.2D2)
4.3	Indenture dated as of May 7, 2004 by and between the Company and The Bank of New York, as Trustee and Form of 13/8% Convertible Notes Due 2024	V(4.5)
4.4	Registration Rights Agreement dated as of May 7, 2004 by and between the Company, as Issuer, and Morgan Stanley & Co., Incorporated and UBS Securities LLC, as the Initial Purchasers	V(4.6)
10.1	Company’s 1986 Employee Incentive Stock Option Plan, including form of Incentive Stock Option Agreement	A (10.1)
10.2	Company’s 1986 Non-qualified Stock Option Plan, including form of Non-qualified Stock Option Agreement	A (10.2)
10.3	1996 Incentive Stock Option Plan, as amended	O (99.1)
10.4	1996 Non-Qualified Stock Option Plan, as amended	O (99.2)
10.5	ImClone Systems Incorporated 1998 Non-Qualified Stock Option Plan, as amended	O (99.2)
10.6	ImClone Systems Incorporated 2002 Stock Option Plan	Q (99.8)
10.7	ImClone Systems Incorporated 1998 Employee Stock Purchase Plan	I (99.4)
10.8	Option Agreement, dated as of September 1, 1998, between the Company and Ron Martell	F (99.3)
10.9	Option Agreement, dated as of January 4, 1999, between the Company and S. Joseph Tarnowski	J (99.4)
10.10	License Agreement between the Company and the Regents of the University of California dated April 9, 1993	B (10.48)
10.11	Collaboration and License Agreement between the Company and the Cancer Research Campaign Technology, Ltd., signed April 4, 1994, with an effective date of April 1, 1994	B (10.50)
10.12	License Agreement between the Company and Rhone-Poulenc Rorer dated June 13, 1994	C (10.56)
10.13	Development and License Agreement between the Company and Merck KGaA dated December 14, 1998	E (10.70)
10.14	Lease dated as of December 15, 1998 for the Company’s premises at 180 Varick Street, New York, New York	G (10.69)
10.15	Amendment dated March 2, 1999 to Development and License Agreement between the Company and Merck KGaA	G (10.71)
10.16	Acquisition Agreement dated as of September 19, 2001, among the Company, Bristol-Myers Squibb Company and Bristol-Myers Squibb Biologics Company	L(99.D1)

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10.17	Development, Promotion, Distribution and Supply Agreement, dated as of September 19, 2001, among the Company, Bristol-Myers Squibb Company and E.R. Squibb & Sons, L.L.C.	L (99.D3)
10.20	Employment Agreement, dated as of March 19, 2004, between the Company and Daniel S. Lynch	U (10.1)
10.21	Agreement of Sublease dated October 5, 2001, by and between 325 Spring Street LLC and the Company	O (10.86)
10.22	Promissory Note in the principal amount of $10,000,000, dated October 5, 2001, executed by 325 Spring Street LLC in favor of the Company	O(10.86.1)
10.23	Amendment No. 1 to Development, Promotion, Distribution and Supply Agreement, dated as of March 5, 2002, among the Company, Bristol-Myers Squibb Company and E.R. Squibb & Sons, L.L.C.	N (99.2)
10.24	Amendment, dated as of August 16, 2001 to the Development and License Agreement between the Company and Merck KGaA	P (10.88)
10.25	Agreement of Sale and Purchase between 4/33 Building Associates, LP and ImClone Systems Incorporated pertaining to 33 Chubb Way, Branchburg, New Jersey executed as of March 1, 2002	Q (10.92)
10.26	Target Price Contract, dated as of July 15, 2002, between ImClone Systems Incorporated and Kvaerner Process, a division of Kvaerner U.S. Inc., for the Architectural, Engineering, Procurement Assistance, Construction Management and Validation of a Commercial Manufacturing Project in Branchburg, New Jersey	R(10.930)
10.27	Modifications Agreement dated as of December 15, 2000 by an between 180 Varick Street Corporation and the Company	S (10.94)
10.28	Amendment number 4 to the Company’s lease at 180 Varick Street dated August 13, 2004 by and between 180 Varick Street Corporation and the Company	V (10.28)
10.29	ImClone Systems Incorporated Annual Incentive Plan	T (A.C)
10.30	Supply Agreement between the Company and Lonza Biologics PLC dated March 17, 2005	Y (10.30)
10.31	ImClone Systems Incorporated Senior Executive Severance Plan	W (10.29)
10.32	ImClone Systems Incorporated Change in Control Plan	W (10.30)
10.33	Letter Agreement, effective as of April 5, 2005, by and between S. Joseph Tarnowski and ImClone Systems Incorporated	X (10.1)
10.34	Terms of inducement stock option grants to Dr. Philip Frost and Dr. Eric Rowinsky on March 1, 2005 and February 21, 2005, respectively, as approved by the Compensation Committee of Board of Directors	Z
10.35*	Collaboration and License Agreement between the Company and UCB S.A. dated August 15, 2005. Confidential Treatment has been requested for a portion of this Exhibit
10.36	Approval by Board of Directors of certain compensation related matters and Company stock repurchase program	AA
31.1*	Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
31.2*	Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
32.1*	Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*Filed herewith.

55

(A)Previously filed with the Commission; incorporated by reference to Amendment No. 1 to Registration Statement on to Form S-1, File No. 33-61234.

(B)Previously filed with the Commission; incorporated by reference to the Company’s Annual Report on Form 10-K, File No. 0-19612, for the fiscal year ended December 31, 1993. Confidential Treatment was granted for a portion of this Exhibit.

(C)Previously filed with the Commission; incorporated by reference to the Company’s Annual Report on Form 10-K, File No. 0-19612, for the fiscal year ended December 31, 1994.

(D)Previously filed with the Commission; incorporated by reference to the Company’s Quarterly Report on Form 10-Q, File No. 0-19612, for the quarter ended June 30, 1997.

(E)Previously filed with the Commission; incorporated by reference to the Company’s Registration Statement on Form S-3, File No. 333-67335. Confidential treatment was granted for a portion of this Exhibit.

(F)Previously filed with the Commission; incorporated by reference to the Company’s Registration Statement on Form S-8, File No. 333-64827.

(G)Previously filed with the Commission; incorporated by reference to the Company’s Annual Report on Form 10-K, File No. 0-19612, for the fiscal year ended December 31, 1998.

(H)Previously filed with the Commission; incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.

(I)Previously filed with the Commission; incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999.

(J)Previously filed with the Commission; incorporated by reference to the Company’s Registration Statement on Form S-8; File No. 333-30172.

(K)Previously filed with the Commission; incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.

(L)Previously filed with the Commission; incorporated by reference to the Company’s Schedule 14D-9 filed on September 28, 2001.

(M)Previously filed with the Commission; incorporated by reference to the Company’s Current Report on Form 8-K dated February 19, 2002.

(N)Previously filed with the Commission; incorporated by reference to the Company’s Current Report on Form 8-K dated March 6, 2002.

(O)Previously filed with the Commission; incorporated by reference to the Company’s Annual Report on Form 10-K, for the year ended December 31, 2001.

(P)Previously filed with the Commission; incorporated by reference to the Company’s Annual Report on Form 10-K, for the year ended December 31, 2001, and Confidential Treatment has been requested for a portion of this exhibit.

(Q)Previously filed with the Commission; incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.

(R)Previously filed with the Commission; incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.

(S)Previously filed with the Commission; incorporated by reference to the Company’s Annual Report on Form 10-K, for the year ended December 31, 2002.

56

(T)Previously filed with the Commission; incorporated by reference to the Company’s Proxy Statement for its 2003 Annual Meeting of Shareholders, filed August 21, 2003, as appendix C.

(U)Previously filed with the Commission; incorporated by reference to the Company’s Current Report on Form 8-K dated March 19, 2004.

(V)Previously filed with the Commission; incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004

(W)Previously filed with the Commission; incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

(X)Previously filed with the Commission; incorporated by reference to the Company’s Current Report on Form 8-K dated April 5, 2005.

(Y)Previously filed with the Commission; incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.

(Z)Previously filed with the Commission; incorporated by reference to the Company’s Current Report on Form 8-K dated July 15, 2005.

(AA)Previously filed with the Commission; incorporated by reference to the Company’s Current Report on Form 8-K dated September 16, 2005.

57

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IMCLONE SYSTEMS INCORPORATED (Registrant)
	By:	/s/ DANIEL S. LYNCH
		Daniel S. Lynch
		Chief Executive Officer
Date: November 8, 2005
	By:	/s/ MICHAEL J. HOWERTON
		Michael J. Howerton
		Chief Financial Officer
Date: November 8, 2005

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EX-10.35

Exhibit 10.35

CONFIDENTIAL TREATMENT REQUESTED
WITH RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED WITH “***”

COLLABORATION AND LICENCE AGREEMENT

DATED 15 AUGUST 2005

AMONG

UCB S.A.

AND

IMCLONE SYSTEMS INCORPORATED

CONTENTS

Article
1.	Definitions
2.	Scope of Collaboration
3.	Collaboration Management
4.	Development of Antibody Products
5.	Regulatory Affairs
6.	Commercialisation of Antibody Products
7.	Manufacture and Supply
8.	INDEPENDENT IndicationS
9.	Grant of Rights
10.	Rights in Intellectual Property
11.	Confidentiality and Non-Use
12.	Term and Termination
13.	Representations, Warranties and Covenants
14.	Indemnification and Insurance
15.	Dispute Resolution
16.	Imclone Option; Competing Products
17.	Miscellaneous
Schedule 1:		Patent Rights And Trademarks
Schedule 2:		Financial Planning, Accounting and Reporting
Schedule 3:		Development Plan
Schedule 4:		Existing Supply Agreements

COLLABORATION AND LICENCE AGREEMENT

THIS COLLABORATION AND LICENCE AGREEMENT (this Agreement) is entered into on 15 August 2005 (the Effective Date)

BETWEEN:

(1)UCB, S.A., a Belgian company (Company No. 0403 053 608) of Allée de la Recherche, 60, 1070 Brussels, Belgium, 1070 (UCB); and

(2)IMCLONE SYSTEMS INCORPORATED, a Delaware corporation, of 180 Varick Street, 6^th Floor, New York, NY 10014, USA (ImClone).

RECITALS:

(A)UCB and ImClone have identified antibodies that bind to, and are directed against, KDR as having potential value in oncology and each of them has experience and expertise in the development of antibody-based pharmaceuticals.

(B)The Parties believe that entering into this Agreement is in their mutual interest and in the interest of the public, and that collaboration under the terms of this Agreement will improve the prospects of success of the approval and delivery of Antibody Products, will lead to effective and efficient Development, Manufacturing and Commercialisation of Antibody Products and will be an efficient and cost effective way of promoting Antibody Products to the benefit of consumers.

(C)UCB and ImClone each wishes to grant to the other certain licences under each Party’s respective intellectual property rights to permit the other Party to participate in mutually beneficial collaborative Development, Manufacturing and Commercialisation of Antibody Products.

NOW THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, UCB and ImClone, intending to be legally bound, do hereby agree as follows:

1.DEFINITIONS

1.1When used in this Agreement, each of the following terms shall have the meanings set out in this Article 1.1:

1121B means an Antibody as disclosed in PCT Application PCT\US03\06459.

Adversarial Prosecution Action means (i) with respect to any Patent Rights, any patent interferences, re-examinations, reissues, revocations, observations or oppositions lodged against such Patent Rights; and (ii) with respect to any Trademark, any trademark interferences, observations, oppositions, rectifications, revocations or invalidations lodged against such Trademark.

Affiliate means any corporation, company, partnership, joint venture or other entity which controls, is controlled by, or is under common control with a Party.  For

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purposes of this definition and the definition of “Change of Control” only, control shall be presumed to exist if one of the following conditions is met: (a) in the case of corporate entities, direct or indirect ownership of at least fifty per cent. (50%) of the stock or shares having the right to vote for the election of directors, and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty per cent. (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities.  The Parties acknowledge that in the case of certain entities organised under the laws of certain countries, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty per cent. (50%), and that in such case such lower percentage shall be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management and policies of such entity.

Agreed Indications means the oncology Indications set forth in the outline for the Development Plan and thereafter the Development Plan and such other oncology Indications as are recommended by the Parties pursuant to Article 4.7 and approved by the Collaboration Committee pursuant to Article 3.3(a).  Agreed Indications shall include any Converted Agreed Indication.

Antibody means any antibody [***]   [Confidential Treatment Required]

Antibody Product means (i) a pharmaceutical product that includes CDP-791 as the sole active ingredient, and (ii) any other pharmaceutical product containing CDP-791 or another Antibody that binds to, and is directed against, KDR (including a Competing Product) that is agreed between the Parties in accordance with Article 2.1(b) or 16.5.

Applicable Law means the applicable laws, rules and regulations (including any rules, regulations, guidelines or other requirements of the Regulatory Authorities, including GMP, GLP and GCP) that may be in effect from time to time in the Territory, to the extent applicable.

Business Day means a day other than a Saturday or Sunday on which banking institutions in both New York, New York USA and London, England are open for business.

Calendar Quarter means each of the three (3) month periods beginning 1st January, 1st April, 1st July and 1st October, provided that the first Calendar Quarter during the Term shall commence on the Effective Date and end on 30th September, 2005 and Quarterly shall have a corresponding meaning.

CDP-791 means the Antibody as disclosed in the IMPD EudraCT number 2005-00173130 filed by Celltech R&D Limited.

Change of Control means, with respect to a Party, a change of the entity that has control (directly or indirectly) of that Party.  For the purposes of this definition, control shall have the meaning given to it in the definition of “Affiliate”.

Clinical Study means (i) a human clinical study in any country that is intended to initially evaluate the safety or pharmacological effect of an Antibody Product in subjects or that would otherwise satisfy requirements of 21 C.F.R. 312.21(a), or its

4

equivalent outside the United States (a Phase I Clinical Study), (ii) a human clinical study in any country that is intended to initially evaluate the effectiveness of an Antibody Product for a particular indication or indications in patients with the disease or indication under study or that would otherwise satisfy requirements of 21 C.F.R. 312.21(b), or its equivalent outside the United States (a Phase II Clinical Study), (iii) a pivotal human clinical study, the principal purpose of which is to establish safety and efficacy in patients with the disease target being studied as required in 21 C.F.R. 312, or similar clinical studies prescribed by the Regulatory Authorities in a country other than the United States whether or not such study is a traditional Phase III study (a Phase III Clinical Study) or (iv) a human clinical study that is required or requested by a Regulatory Authority as a condition of or in connection with obtaining or maintaining a Regulatory Approval (whether commenced prior to or after receipt of such Regulatory Approval) (a Phase IV Clinical Study).  A Clinical Study shall be deemed to be complete on the date specified by the JDT in accordance with Article 4.6(b)(v).

Clinical Supplies means supplies of ICH and GMP compliant Antibody Products in suitable form for use in Development or Post-Approval Studies.

Collaboration Committee means the committee formed pursuant to Article 3.1.

Commercial Supplies means supplies of Antibody Products in suitable final packaged form, in accordance with a specification agreed by the Parties, Manufactured in compliance with GMP, and ready to be offered for commercial sale for use in the Field in the Territory by ImClone, UCB, their Affiliates, sublicensees and Distributors (or any of them).

Commercialisation or Commercialise means any and all activities (whether before or after Regulatory Approval) directed to marketing, Detailing and Promotion (or any of those activities) of an Antibody Product for commercial sale, and shall include Post-Approval Studies, pre-launch and post-launch marketing, Promoting, Detailing, distributing, offering to sell and selling an Antibody Product, importing, exporting or transporting an Antibody Product for sale, and interacting with Regulatory Authorities regarding the foregoing, but shall exclude Manufacturing.  When used as a verb, Commercialising means to engage in Commercialisation and Commercialised shall have a corresponding meaning.

Commercialisation Plan means the comprehensive plan and overall strategy for the Commercialisation of Antibody Products, to be prepared, updated and amended pursuant to Article 6.5.

Commercially Reasonable and Diligent Efforts means efforts and resources commonly associated with good business practice and standards in the research-based pharmaceutical industry to research, develop, manufacture or commercialise (as appropriate) a product or compound of similar market potential at a similar stage in its product life, taking into account safety, efficacy, the competitiveness of alternative products and product candidates in the marketplace, the patent and other proprietary position of the product, the likelihood of Regulatory Approval given the regulatory structure involved, the profitability of the product including the royalties payable to licensors of Patent Rights, alternative products and product candidates and other reasonably relevant factors.  Commercially Reasonable and Diligent Efforts where

5

appropriate shall be determined on a market-by-market basis for a particular product, and the level of effort may change over time, reflecting changes in the status of the product and the market involved.

Committee means any of the Collaboration Committee, JDT, JCT, JMT, JPC or any sub-team or sub-committee thereof established pursuant to this Agreement, as the case may be.

Compendia Listing means a listing for an indication in the United States for a Product that is supported by a citation in at least one of the following authoritative drug reference books: (a) the American Society of Health-System Pharmacists’ American Hospital Formulary Service (AHFS), or (b) the U.S. Pharmacopoeia Drug Information, or in another similar authoritative drug reference book that is relied on by Third Party payors in authorizing reimbursement for such Product for such indication.

Competing Product [***]   [Confidential Treatment Required]

Confidential Information means all Information and all Materials provided by a Party or its Affiliates to the other Party or its Affiliates either in connection with the discussions or negotiations pertaining to, or in the course of performing, this Agreement, including all Information and Materials developed during the course of Development, Commercialisation or Manufacture of Antibody Products under this Agreement and all Information of a Party disclosed at any meeting of any Committee or disclosed through a report to or from any such Committee.  The terms of this Agreement and the Joint Know-How shall be considered Confidential Information of each Party.

Contract Year means: (a) with respect to the first Contract Year, the period beginning on the Effective Date and ending on 31st December, 2005 (the First Contract Year); and (b) with respect to each subsequent Contract Year, the twelve (12) month period beginning on the day following the end of the First Contract Year and each succeeding twelve (12) month period.

Control or Controlled means, with respect to any (a) Materials or Information, or (b) intellectual property or proprietary right, in each case the possession (whether by ownership, licence or other right, other than pursuant to this Agreement) by a Party or its Affiliates of the ability to grant to the other Party access and/or a licence (or sublicence) as provided in this Agreement under such right or to such Material or Information [***]   [Confidential Treatment Required].

Co-Promotion and Co-Promote mean, with respect to an Antibody Product, those activities and obligations including Detailing undertaken by a Third Party in collaboration with a Party to encourage sales of such Antibody Product by that Party, but not including Promotion or other activities conducted by Affiliates or sublicensees in connection with sales on their own account or Distributors or Third Parties (including contract sales organisations and advertising agencies) appointed on a subcontract basis to perform services for the Party.

Core Patent Rights means the ImClone Core Patent Rights or the UCB Core Patent Rights.

6

Corporate Marks means the ImClone Company Marks and UCB Company Marks.

Data Package means, with respect to an Antibody Product for an Independent Indication or a Competing Product (a) for which a Drug Approval Application has not been approved by the Regulatory Authorities in the United States, including the FDA, or Europe, including the EMEA, (i) a summary of all the relevant clinical data with respect to the Independent Indication for the Antibody Product or to the Competing Product, as applicable, including any Clinical Study results and resultant data analyses, (ii) any regulatory submissions made to the FDA or any other Regulatory Authority by or on behalf of the Continuing Party with respect to such Independent Indication for such Antibody Product or to such Competing Product, (iii) protocols for any ongoing Clinical Studies and proposed designs for any anticipated Clinical Studies with respect to such Independent Indication for such Antibody Product or to such Competing Product, (iv) a budget for the costs and expenses expected to be incurred in connection with any ongoing Development of such Independent Indication for such Antibody Product or Competing Product and, (v) such other material Information and Materials relating to such Independent Indication for such Antibody Product or to such Competing Product in the control of the Continuing Party that were not previously disclosed to the Non-Continuing Party and that were relied on by the Continuing Party’s senior management in determining to proceed with the current phase of Development of such Independent Indication for such Antibody Product or of such Competing Product, and (b) for which a Drug Approval Application has been approved by the Regulatory Authorities in the United States, including the FDA, or Europe, including the EMEA, a copy of such Drug Approval Application and any other filings made with the Regulatory Authorities with respect to the Antibody Product for such Independent Indication or the Competing Product.

Detail means an interactive face-to-face contact (including a live video presentation) of a sales representative, who is adequately equipped with, and knowledgeable of, applicable Promotional Materials and Product Labelling, with a physician or other medical professional licensed to prescribe drugs or other healthcare professional that has a significant impact or influence on prescribing decisions including: (a) a medical professional with prescribing authority; or (b) to the extent permitted by Applicable Law, an office nurse with influence over the pharmaceutical treatment of a patient, in which relevant characteristics of the applicable Antibody Product are described by the sales representative in a fair and balanced manner consistent with the requirements of this Agreement and Applicable Law, and in a manner that is customary in the industry for the purpose of promoting a prescription pharmaceutical product.  When used as a verb, Detail means to engage in a Detail.  A sample drop does not constitute a Detail.

Development or Develop means all activities related to research, preclinical and other non-clinical testing, test method development and stability testing, toxicology, Clinical Studies other than Post-Approval Studies, regulatory affairs, statistical analysis and report writing, market research and development, the preparation and submission of Drug Approval Applications and all other activities [***]   [Confidential Treatment Required] or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval for an Antibody Product for a specified Indication, but excluding Manufacturing.

7

Development Plan means the plan for the Development of Antibody Products for Agreed Indications.  An outline for the Development Plan is attached as Schedule 3 and the Development Plan shall be adopted and subsequently updated and amended pursuant to Article 4.7.  For clarity, the outline for the Development Plan attached as Schedule 3 shall not constitute the Development Plan for the purposes of this Agreement.

Distributor means a person or entity, other than a sublicensee, in a country that (a) purchases an Antibody Product from the Territorial Lead, its Affiliate or a permitted sublicensee for that country; (b) assumes responsibility from the Territorial Lead for all or a portion of the Promotion, marketing, sales and customer service effort related to such Antibody Product in such country; and (c) sells Antibody Product in such country.

Dollar means a United States dollar, and $ shall be interpreted accordingly.

Drug Approval Application means an application for any Regulatory Approval required before commercial sale or marketing of a pharmaceutical or biopharmaceutical product as a drug or to treat a particular Indication, including: (a) (i) a Biologics Licence Application (BLA) submitted to the FDA and (ii) any counterpart of a U.S. BLA in any other country in the Territory; and (b) all supplements and amendments that may be filed with respect to the foregoing.

EMEA means the European Medicines Agency or a successor agency.

Enforcement Action means (a) the enforcement of a Patent Right or Trademark, (b) the defence of a validity or enforceability challenge to a Patent Right or Trademark, including the defence of an action for a declaratory judgment of, or counterclaim asserting, non-infringement, invalidity, unenforceability of a Patent Right or
non-infringement, invalidity, unenforceability or dilution of a Trademark, as applicable, or (c) a dispute pertaining to the inventorship of a Patent Right or ownership of a Trademark.

EU means the economic, scientific and political organization of member states, as it may be expanded from time to time.

Europe means the countries comprising the EU and also includes Norway, Iceland, Lichtenstein and Switzerland.

FDA means the United States Food and Drug Administration or a successor agency.

FFDCA means the United States Federal Food, Drug, and Cosmetic Act, as amended from time to time.

Field means the [***]   [Confidential Treatment Required].

First Commercial Sale means the first shipment of any Antibody Product sold to a Third Party by a Party or its Affiliates or their respective Distributors or sublicensees in a country in the Territory.  First Commercial Sale shall be determined on a country by country basis.

8

Force Majeure means any occurrence beyond the reasonable control of a Party that prevents or substantially interferes with the performance by a Party of any of its obligations under this Agreement, including fires, floods, earthquakes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotion, acts of God or unforeseen acts, omissions or delays in acting by any governmental authority.  For clarity, any failure to perform by a sublicensee, Distributor or sub-contractor of a Party shall not be deemed a Force Majeure for such Party unless the reason for such failure is an occurrence beyond the reasonable control of such sublicensee, Distributor or sub-contractor (as appropriate) that prevents or substantially interferes with the performance of the tasks that have been delegated to such sublicensee, Distributor or sub-contractor by that Party pursuant to this Agreement.

HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, and the rules and regulations promulgated thereunder.

HSR Filing means any filing by UCB or ImClone with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice of a Notification and Report Form for Certain Mergers and Acquisitions (as that term is defined in the HSR Act) with respect to the matters set forth in this Agreement, together with all required documentary attachments thereto.

GAAP means United States generally accepted accounting principles consistently applied.

GCP or Good Clinical Practice means the then-current standards for clinical trials for pharmaceuticals as are required by the Regulatory Authorities in Europe, the United States and Japan and other organisations and governmental agencies in countries in which any Antibody Product is intended to be sold or tested, to the extent such standards are not less stringent than standards of good clinical practice in Europe, the United States and Japan, provided that a Party shall not be held to any standards of good clinical practice that are more onerous than those standards required by Applicable Law and the Regulatory Authorities in the countries in which it is the Territorial Lead and, to the extent not included in such countries, Europe, the United States and Japan, unless such standards have been specifically identified and approved for implementation by the JDT.

GLP means the then-current standards for laboratory activities for pharmaceuticals, as are required by the Regulatory Authorities of Europe, the United States and Japan, including 21 C.F.R. part 58 and EC Directives 87/18/EEC, 88/320/EEC and 1999/11/EC, in each case, as amended from time to time.

GMP or cGMP means the then-current standards for good Manufacturing practices as are required by the Regulatory Authorities in Europe, the United States and Japan and other organisations and governmental agencies in countries in which any Antibody Product is intended to be Manufactured or sold, to the extent such standards are not less stringent than standards of good Manufacturing practice in Europe, the United States and Japan.

ICH means the International Conference on Harmonisation.

9

ImClone Company Marks means the Trademarks Controlled by ImClone or its Affiliates, whether on the Effective Date or during the Term, that are designated by ImClone pursuant to Article 6.12(b) for use on or in connection with the Development and Commercialisation of an Antibody Product under the Agreement.

ImClone Core Patent Rights means those ImClone Patent Rights identified as such in Part 4 of Schedule 1.

ImClone In-Licences means the licences listed in Part 2 of Schedule 1, as may be amended from time to time, each one an ImClone In-Licence.

ImClone Know-How means any and all Information and Materials that are Controlled by ImClone or any of its Affiliates at any time [***]   [Confidential Treatment Required]; provided, however, that any Information and Materials acquired by ImClone or any of its Affiliates after the Effective Date, whether by licence, merger, acquisition or otherwise, [***]   [Confidential Treatment Required].  ImClone Know-How excludes (i) any Information and Materials included in the Joint Know-How; (ii) any Information and Materials expressly excluded from this definition pursuant to Article 10.8(b);  (iii) the ImClone Patent Rights; and (iv) Joint Patent Rights.

ImClone Patent Rights means any and all Patent Rights that are Controlled by ImClone or any of its Affiliates, in each case which if not licensed in this Agreement would be infringed by Developing, Commercialising, making, having made, using, selling, having sold, offering to sell or resell, importing, exporting, distributing or otherwise transferring physical possession of or otherwise transferring title in or to an Antibody Product in the Field, including any Patent Rights which claim ImClone Know-How; provided, however, that any Patent Rights that are acquired by ImClone or any of its Affiliates after the Effective Date, whether by licence, merger, acquisition or otherwise, [***]   [Confidential Treatment Required].  ImClone Patent Rights excludes the Joint Patent Rights and those Patent Rights expressly excluded from this definition pursuant to Article 10.8(b).  As of the Effective Date, ImClone Patent Rights include those Patent Rights set out in Part 4 of Schedule 1.

ImClone Territory means the United States, Canada and Mexico, and each of their respective territories and possessions.

IND means (a) (i) an Investigational New Drug Application (as defined in the FFDCA and the regulations promulgated thereunder, including 21 C.F.R. part 312) that is required to be filed with the FDA before beginning clinical testing of an Antibody Product in human subjects, or any successor application or procedure; and (ii) any counterpart of a U.S. Investigational New Drug Application in any other country in the Territory; and (b) all supplements and amendments that may be filed with respect to the foregoing.

Indication means a specific line of therapy (i.e. first, second, third or other) for the cancer sub-type(s) as set forth in a protocol of a particular Phase II Clinical Study, Phase III Clinical Study or Phase IV Clinical Study (or, where no cancer sub-type is referenced in such protocol, a specific line of therapy for the cancer type set forth in such protocol).

10

Information means tangible or intangible know-how, trade secrets, inventions (that are conceived and reduced to practice, constructively or actually), methods, knowledge, conclusions, skill, experience, test data and results (including chemical, biological, biochemical, pharmaceutical, pharmacological, toxicological and research, pre-clinical and other non-clinical data, clinical data, assay, control and manufacturing processes, test data and results), analytical and quality control methods and data, results or descriptions, software and algorithms or other information (in each case, whether or not patentable) regarding technology, techniques, practices, products, protocols, procedures, business information or objectives.

In-Licences means the ImClone In-Licences and the UCB In-Licences collectively.

Joint Commercialisation Team or JCT means the team formed pursuant to Article 6.3.

Joint Development Team or JDT means the team formed pursuant to Article 4.6.

Joint Know-How means all Information conceived, developed, discovered, generated or otherwise made and all Materials characterised, conceived, developed, derived, generated or otherwise made, in either case (a) jointly by employees or consultants of UCB or its Affiliates or, to the extent UCB or its Affiliates has rights thereto, their respective sublicensees and Distributors, on the one hand, and ImClone or its Affiliates, or, to the extent ImClone or its Affiliates has rights thereto, their respective sublicensees and Distributors, on the other hand (rather than independently by the employees or consultants of one or the other Party or its Affiliates, sublicensees or Distributors) in the course of Development, Commercialisation or Manufacturing of an Antibody Product under or in connection with, and during the Term of, this Agreement or (b) [***]   [Confidential Treatment Required].

Joint Manufacturing Team or JMT means the committee formed pursuant to Article 7.1.

Joint Patent Committee or JPC means the committee formed pursuant to Article 3.4.

Joint Patent Rights means Patent Rights in any country within the Territory which claim Joint Know-How.

KDR means kinase domain receptor, also known in the literature as VEGFR2 or kinase insert domain receptor.

Knowledge means, with respect to a Party, the good faith understanding of the facts and information in the possession of an officer of such Party or any of its Affiliates, or any in-house legal counsel of, or in-house patent agents employed by, such Party or any of its Affiliates, without any duty to conduct any additional investigation with respect to such facts and information by reason of the execution of this Agreement.  For purposes of this definition, an “officer” shall mean any person in the position of vice president, senior vice president, president or chief executive officer, or any person having similar responsibilities, of a Party or any of its Affiliates.

11

Manufacturing or Manufacture means all activities related to the production, manufacture, processing, filling, finishing, packaging, labelling, shipping, and storage of Antibody Products, including process development, process qualification and process validation, manufacturing scale-up, pre-clinical, clinical and commercial manufacture and analytical development, product characterisation, quality assurance and quality control.

Materials means biological and chemical materials, including Antibodies (other than Antibody Products), screens, animal models, cell lines, cells, vectors, nucleic acids, and reagents, and any progeny or derivatives thereof.

Non-Remaining Party means, on termination of this Agreement, the Party designated as the Non-Remaining Party under Article 12.2, 12.3(a), 12.4(d), 12.5(b) or 12.6 (as appropriate).

Party means UCB or ImClone; Parties means UCB and ImClone.

Patent Rights means, in any country, all: (a) existing issued, unexpired patents (with the term patent being deemed to encompass an inventor’s certificate, utility model, petty patent and design patent), including any reissue, re-examination, renewal or extension (including any supplementary protection certificate) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, in such country; (b) existing patent applications and patent applications filed after the date of this Agreement, including any request for continued examination (RCE), continuations, continuations-in-part, divisionals, provisionals, converted provisional, continued prosecution application, or any substitute applications, any patent issued with respect to any such patent applications, any reissue, re-examination, renewal or extension (including any supplementary protection certificate) of any such patent and any confirmation patent or registration patent or patent of addition based on any such patent in such country; and (c) all foreign counterparts of any of the foregoing.

Post-Approval Study means any human clinical study, or other test or study, other than a Clinical Study, with respect to an Antibody Product for an Agreed Indication or an Independent Indication that (a) is conducted solely in support of pricing or reimbursement for a product in a country or (b) is not required to obtain or maintain Regulatory Approval for such Antibody Product for such Agreed Indication or Independent Indication and is conducted (i) within the scope of the Product Labelling for such Antibody Product or (ii) outside the scope of such Product Labelling in support of a Compendia Listing (for clarity, any human clinical study that is intended to expand the Product Labelling for an Antibody Product (except as provided in paragraph (ii) above) shall be a Clinical Study and shall be governed by the procedures set forth in Article 4.9 with respect to new Indications).  Subject to the foregoing, Post-Approval Studies may include epidemiological studies, modeling and pharmacoeconomic studies, post-marketing surveillance studies, investigator sponsored studies, and health economics studies.

[***]   [Confidential Treatment Required]

Product Labelling means, with respect to an Antibody Product, for any country of the Territory (a) the Regulatory Authority-approved full prescribing information for

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such Antibody Product for that country, including any required patient information; and (b) all labels and other written, printed or graphic matter upon a container, wrapper or any package insert utilised with or for such Antibody Product.

Product Trademark means any Trademark that is identified by the Parties and approved by the Collaboration Committee pursuant to Article 3.2(d) for use in Commercialising the Antibody Products in the Territory, but not including any Corporate Marks.

Promote, Promotion, Promoting or Promotional means, with respect to an Antibody Product, those activities and obligations other than Detailing undertaken by a Party, its Affiliates, sublicensees or Distributors to encourage sales of such Antibody Product, including journal advertising, direct mail programmes, direct-to-consumer advertising, Internet advertising, broadcast advertising, distributing sales reminders (e.g., scratch pads, pens and other such items), convention exhibits, and other forms of advertising and promotion.

Promotional Materials means all sales representative training materials with respect to an Antibody Product and all written, printed, graphic, electronic, audio or video matter, including journal advertisements, sales visual aids, direct mail, direct-to-consumer advertising, Internet postings, broadcast advertisements, and sales reminder aids (e.g., scratch pads, pens and other such items) intended for use or used by a Party, its Affiliates, sublicensees and Distributors in connection with any Promotion or Detailing of an Antibody Product, except Product Labelling.

Regulatory Approval means any and all approvals (including any applicable supplements, amendments, pre- and post-approvals, governmental price and reimbursement approvals and approvals of applications for regulatory exclusivity), licences, registrations, or authorisations of any federal, national, multinational, international, state, provincial or local regulatory agency, department, bureau, commission, council or other governmental entity necessary for the Manufacture, distribution or other transfer of possession, use, holding, storage, import, export, transport, Promotion, marketing or sale of an Antibody Product in a country or jurisdiction in the Territory.  For clarity, a Compendia Listing shall not be deemed to be a Regulatory Approval.

Regulatory Authority means any governmental or regulatory authority involved in granting Regulatory Approvals.

Remaining Party means, on termination of this Agreement, the Party designated as the Remaining Party under Article 12.1, 12.2, 12.3, 12.4(d), 12.5(b) or 12.6 (as appropriate).

Royalties means any or all of (i) the ImClone Royalties; (ii) the royalties payable by either Party pursuant to Article 8.2(b) on the sale of Antibody Products for Independent Indications; and (iii) [***]   [Confidential Treatment Required].

Royalty-Bearing Patent Rights means the ImClone Core Patent Rights identified as “Royalty-Bearing” in Part 4 of Schedule 1.

Term means the term of this Agreement as set out in Article 12.1.

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[***]   [Confidential Treatment Required]

Territorial Lead means ImClone in the ImClone Territory; and UCB in the UCB Territory.

Territory means all the countries of the world.

Third Party means any person, partnership, joint venture, corporation, trust, estate, unincorporated organisation, government or any department or agency of any of them, or any other entity other than a Party or any of its Affiliates.

Trademark means any corporate name, trade name, service mark, service name, house mark, trade dress, trade mark or logo, in each case whether or not registered, and all applications for, and registrations of, and all renewals, extensions or modifications to, and any goodwill associated with, any of them in the Territory.

UCB Core Patent Rights means those UCB Patent Rights identified as such in Part 3 of Schedule 1.

UCB Company Marks means the Trademarks Controlled by UCB or its Affiliates, whether on the Effective Date or during the Term, that are designated by UCB pursuant to Article 6.12(b) for use in connection with the Development and Commercialisation of an Antibody Product under the Agreement.

UCB In-Licences means the licences listed in Part 1 of Schedule 1, as may be amended from time to time, each one a UCB In-Licence.

UCB Know-How means any and all Information and Materials that are Controlled by UCB or any of its Affiliates at any time during the Term that [***]   [Confidential Treatment Required]; provided, however, that any Information and Materials acquired by UCB or any of its Affiliates after the Effective Date, whether by licence, merger, acquisition or otherwise, [***]   [Confidential Treatment Required].  UCB Know-How excludes (i) any Information and Materials included in the Joint Know-How; (ii) any Information and Materials expressly excluded from this definition pursuant to Article 10.8(b); (iii) the UCB Patent Rights; and (iv) Joint Patent Rights.

UCB Patent Rights means any and all Patent Rights that are Controlled by UCB or any of its Affiliates, in each case which if not licensed in this Agreement would be infringed by Developing, Commercialising, making, having made, using, selling, having sold, offering to sell or resell, importing, exporting, distributing or otherwise transferring physical possession of or otherwise transferring title in or to an Antibody Product in the Field, including any Patent Rights which claim UCB Know-How; provided, however, that any Patent Rights that are acquired by UCB or any of its Affiliates after the Effective Date, whether by licence, merger, acquisition or otherwise, [***]   [Confidential Treatment Required].  UCB Patent Rights excludes the Joint Patent Rights and those Patent Rights expressly excluded from this definition pursuant to Article 10.8(b).  As of the Effective Date, UCB Patent Rights include those Patent Rights set out in Part 3 of Schedule 1.

UCB Territory means the Territory excluding the ImClone Territory.

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Valid Claim means, with respect to a particular country, any claim of a [***]   [Confidential Treatment Required] Patent Right in such country that (i) has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, which decision is unappealable or unappealed within the time allowed for appeal, and (ii) has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination, disclaimer or otherwise.

1.2Each of the following definitions is found in this Agreement as indicated.

Defined Terms	Page/Article/Schedule
Acquired Party	Article 17.14
Acquiring Party	Article 10.8(b)
Additional Manufacturing Amount	Article 7.13(b)
Agreement	Pg. 3, first paragraph
Antibody Product Specifications	Article 7.2(g)
Antibody Product Standards	Article 7.8(d)
BLA	Article 1.1, def. Drug Approval Application
CEDR	Article 15.4
CEO Period	Article 15.3
Challenging Party	Article 12.6
COGM	Schedule 2
Commercialisation Budget	Article 6.8(a)
Commercialisation Team Leader	Article 6.3(a)
Competing Activity	Article 12.3(a)
Continuing Indications	Article 12.8(a)(i)
Continuing Party	Article 8.1
Controlling Party	Article 10.4(c)
Conversion	Article 8.9(a)
Convert	Article 8.9(a)
Converted Agreed Indication	Article 8.9(f)

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Country Plan	Article 6.6(a)
CP Conversion	Article 16.5(a)
CP Conversion Notice	Article 16.5(a)
Cure Period	Article 12.4(a)
Default	Article 12.4(a)
Default Conversion	Article 8.9(a)(ii)
Defaulting Party	Article 12.4(a)
Development Budget	Article 4.5(a)
Development Costs	Schedule 2
Development Team Leader	Article 4.6(a)
Dispute	Article 15.1
Distribution Costs	Schedule 2
Effective Date	Pg. 3, first paragraph
Excluded Party	Article 12.3(a)
Filing Party	Article 5.1(b)
First Contract Year	Article 1.1, def. Contract Year
FTE	Schedule 2
FTE Cost	Schedule 2
Gross Receipts	Schedule 2
ImClone	Pg. 3, paragraph (2)
ImClone Royalties	Article 6.15(b)
Indemnitees	Article 14.1(a)
Independent Indication	Article 8.1
Information Request	Article 8.9(a)(i)
Initial Payment Period	Article 8.2(a)
Insolvency Event	Article 12.5(b)(iii)
Joint Activities	Article 6.4(a)(ii)

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LCIA	Article 15.3
Losses	Article 14.1(a)
Managing Party	Article 10.5(e)
Manufacturer	Article 7.2(c)
Manufacturing Agreement	Article 7.2(d)
Manufacturing Coordinator	Article 7.2(b)
Manufacturing Know How	Article 7.8(b)
Manufacturing Patents	Article 7.8(b)
Manufacturing Plan	Article 7.2(a)
Manufacturing Team Leader	Article 7.1
Marketing Costs	Schedule 2
Markings	Article 6.12(b)
Merging Party	Articles 16.4
Net Receipts	Schedule 2
Net Sales	Schedule 2
Non-Acquired Party	Article 17.14
Non-Challenging Party	Article 12.6
Non-Continuing Party	Article 8.1
Non-Defaulting Party	Article 12.4(a)
Non-Remaining Party Indemnitees	Article 14.1(b)
Notice of Default	Article 12.4(a)
Operating Profits and Losses	Schedule 2
Operating Statement	Schedule 2
Option Exercise Notice	Article 8.9(a)
Opt-Out Date	Article 16.2
Other Out of Pocket Costs	Schedule 2
Patent Costs	Schedule 2

17

Phase I Clinical Study	Article 1.1, def. Clinical Study
Phase II Clinical Study	Article 1.1, def. Clinical Study
Phase III Clinical Study	Article 1.1, def. Clinical Study
Phase IV Clinical Study	Article 1.1, def. Clinical Study
Post-Approval Study Expenses	Schedule 2
Pre-Marketing Costs	Schedule 2
Product Trademark Owner	Article 10.1(b)
Recall	Article 5.5(a)
Reimbursable Costs	Article 8.9(b)
Reimbursable Commercial Costs	Schedule 2
Reimbursement Amount	Article 8.9(c)
Relevant Net Sales	Article 8.2(b)
Relevant Supply	Article 7.13(a)
Representatives	Article 14.1(b)(i)
Responsible Party	Article 10.7(b)(v)
Royalty Term	Article 6.15(c)
Sales Costs	Schedule 2
Sales Returns and Allowances	Schedule 2
SOPs	Article 5.5(a)
Terminating Party	Article 12.2
[***]   [Confidential Treatment Required]	[***]   [Confidential Treatment Required]
Third Party Claims	Article 14.1(a)
Third Party Licence Fees	Schedule 2
Transfer Price	Schedule 2
Transition Period	Article 12.8(a)(i)
Transition Plan	Article 12.8(a)(i)
UCB	Pg. 3, paragraph (1)

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2.SCOPE OF COLLABORATION

2.1Collaboration Goals

(a)Pursuant and subject to the terms of this Agreement:

(i)each Party shall use [***]   [Confidential Treatment Required] to carry out the Development activities assigned to it pursuant to, and in accordance with, the Development Plan, as amended from time to time;

(ii)ImClone shall use [***]   [Confidential Treatment Required] to obtain all necessary Regulatory Approvals as soon as reasonably practicable in [***]   [Confidential Treatment Required] for each Antibody Product for each Agreed Indication;

(iii)UCB shall use [***]   [Confidential Treatment Required] to obtain all necessary Regulatory Approvals as soon as reasonably practicable in [***]   [Confidential Treatment Required], for each Antibody Product for each Agreed Indication;

(iv)each Party shall use [***]   [Confidential Treatment Required] to Commercialise each Antibody Product for each Agreed Indication for which Regulatory Approval has been obtained; and

(v)the Parties shall share Operating Profits and Losses of Antibody Products in the manner set forth in Articles 2.3(b), 8.9, 12.10 and 16.5(c) and UCB shall pay ImClone the ImClone Royalties as set forth in Article 6.15.

(b)Subject to Article 4.7(f), the Parties acknowledge that the sole initial focus of the Development shall be of CDP-791 in the Field as set forth in the outline for the Development Plan set forth in Schedule 3.  Either Party may, from time to time, notify the other Party in writing that it wishes to extend the focus of the Development to include other Antibodies in the Field, provided that there shall be no amendment to the focus of the Development unless and until the other Party, in its sole discretion, consents in writing to such extension of the focus.

(c)Each Party shall co-operate with and provide reasonable support to the other Party in performing its activities with respect to the Development and Commercialisation work contemplated under this Agreement.

(d)Notwithstanding anything in this Agreement to the contrary, but without expanding each Party’s diligence obligation under Article 2.1(a), neither Party (or any of its Affiliates) shall take any action or, with respect to the implementation of the responsibilities assigned to it under the Development Plan, Commercialisation Plan, Manufacturing Plan or otherwise under this Agreement, fail to take any action with respect to the Development,

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Manufacturing or Commercialisation of an Antibody Product, whether for an Agreed Indication or an Independent Indication, that it knows, or should know, is reasonably likely to have a material adverse affect on the Development, Manufacture or Commercialisation of an Antibody Product in [***]   [Confidential Treatment Required], unless it has first consulted with, and obtained prior written consent to take or refrain from taking such action from, the JDT (where the adverse affect would be on Development), the JMT (where the adverse effect would be on Manufacturing), and/or the JCT (where the adverse affect would be on Commercialisation) [***]   [Confidential Treatment Required], provided that any Dispute as to any proposed act or omission shall be resolved in accordance with Article 15 [***]   [Confidential Treatment Required].

2.2Exclusive Collaboration

Except as provided in Article 16.4, the Parties agree that for the duration of this Agreement [***]   [Confidential Treatment Required] they and their Affiliates will Develop, Commercialise and Manufacture Antibody Products in the Field in the Territory exclusively within the scope of this collaboration and subject to the terms of this Agreement and, other than as explicitly permitted under this Agreement (including with respect to permitted sublicensees or Distributors), will not undertake or enable any Third Party to Develop, Commercialise or Manufacture any Antibody Products in the Field without the other Party’s prior written consent.

2.3Financials and Audit Rights

(a)UCB shall pay ImClone the royalties as described in Article 6.15.

(b)Subject to Articles 8.9, 12.10 and 16.5, during the Term the Parties shall share Operating Profits and Losses as follows:

(i)except as provided in Article 2.3(b)(ii), for each Antibody Product, each Party is entitled to and responsible for fifty per cent. (50%) of Operating Profits and Losses; and

(ii)for an Antibody Product for an Independent Indication (A) if ImClone is the Continuing Party for such Independent Indication, then, except as otherwise expressly provided in this Agreement, [***]   [Confidential Treatment Required] entitled to and responsible for [***]   [Confidential Treatment Required] of Operating Profits and Losses for such Antibody Product for such Independent Indication in the [***]   [Confidential Treatment Required], and in accordance with Articles 4.7(d), 8.1 and 8.2, [***]   [Confidential Treatment Required] for such Antibody Product for such Independent Indication in the [***]   [Confidential Treatment Required], and (B) if UCB is the Continuing Party for such Independent Indication, then, except as otherwise expressly provided in this Agreement, [***]   [Confidential Treatment Required] is entitled to and responsible for [***]   [Confidential Treatment Required] of Operating Profits and Losses for such Antibody Product for such Independent Indication in the [***]   [Confidential Treatment Required], and in accordance with

20

Articles 4.7(d), 8.1 and 8.2, [***]   [Confidential Treatment Required] for such Antibody Product for such Independent Indication in the [***]   [Confidential Treatment Required].

(c)Within [***]   [Confidential Treatment Required] from the end of each calendar month, each Party shall submit to the other Party a written report setting out, on an activity-by-activity basis, the Development Costs it has incurred in that calendar month (or, where such information is not available, a reasonable estimate of such Development Costs) as against the amount budgeted for that activity in the Development Budget.

(d)From the date of the First Commercial Sale of an Antibody Product each Party during the Term and thereafter the Remaining Party shall within [***]   [Confidential Treatment Required] after the end of each Calendar Quarter deliver to the other Party a detailed report showing:

(i)the Net Sales and the units of each Antibody Product sold by such first Party or the Remaining Party, its Affiliates and their respective Distributors and sublicensees in the countries for which such Party is the Territorial Lead during the applicable Calendar Quarter on a country by country basis;

(ii)during the Term if such first Party is a Continuing Party, the Net Sales and units of each Antibody Product sold by such first Party, its Affiliates and their respective Distributors and sublicensees in a country for which such Party is the Territorial Lead for use in an Independent Indication for which such Party is the Continuing Party during the applicable Calendar Quarter on a country by country basis using the allocation methodology agreed to by the Parties pursuant to Article 8.3 together with such support for such sales as the other Party may reasonably request; and

(iii)the amount of Royalties payable and if applicable the breakdown of the calculation of the Net Sales under paragraphs (i) and (ii) above during the applicable Calendar Quarter.

(e)On receipt of each report for a Calendar Quarter delivered by one Party pursuant to Article 2.3(d), the other Party will issue an invoice for the Royalties payable as specified in Article 2.3(d)(iii).  Royalties shall be payable, with respect to each Calendar Quarter, within [***]   [Confidential Treatment Required] after receipt of such invoice.  Royalties shall be calculated in accordance with GAAP and with the terms of this Article 2.3 and as applicable Article 6.15, Article 8.2 and Article 12.9(a) or Article 0.

(f)Except as otherwise provided in this Agreement, other payment, accounting and financial rights and obligations of the Parties are set forth in Schedule 2.  Subject to Article 2.3(l), all Disputes related to payment, accounting and financial rights and obligations of the Parties shall be referred to the Collaboration Committee, and if the Collaboration Committee is unable to resolve such Dispute, the Dispute shall be decided under the provisions of Article 15 [***]   [Confidential Treatment Required].

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(g)All amounts due from one Party to the other Party under this Agreement shall be paid in Dollars by wire transfer in immediately available funds to an account designated by the receiving Party.  Any payments or portions due hereunder that are not paid on the date such payments are due under this Agreement shall bear interest at a rate equal to the lesser of LIBOR [***]   [Confidential Treatment Required], and the maximum rate permitted by law, calculated on the number of days such payment is delinquent, compounded monthly.  For the purpose of this Article 2.3(g) LIBOR means the British Bankers’ Association Interest Settlement Rate for the relevant currency and period as displayed on the appropriate page of the Telerate screen.  If the Telerate screen is replaced or the service ceases to be available, the Parties shall agree a reasonable alternative page or service displaying the appropriate rate.

(h)If any currency conversion shall be required in connection with any payment due under this Agreement, such conversion shall be made by using the exchange rate for the purchase of Dollars as published in The Wall Street Journal, Eastern Edition, on the last Business Day of the Calendar Quarter or the calendar month (as the case may be) to which such payments relate.

(i)The Parties shall maintain (and shall ensure that their Affiliates and respective sublicensees and Distributors maintain) complete and accurate books, records, accounts and supporting data that fairly and accurately reflect their respective Net Sales, Gross Receipts, Sales Returns and Allowances, the Transfer Price, Distribution Costs, Development Costs, Patent Costs, Pre-Marketing Expenses, Marketing Costs, Sales Costs, Post-Approval Study Expenses and Other Out of Pocket Costs and COGM in sufficient detail to confirm the accuracy of any payments required under this Agreement and in accordance with GAAP, which books, records, accounts and supporting data shall be retained by such Party until the later of (i) [***]   [Confidential Treatment Required] after the end of the period to which such books, records, accounts and supporting data pertain; and (ii) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law.

(j)Each Party shall have the right for a period of [***]   [Confidential Treatment Required] after receiving or making any payment under this Agreement from or to the other Party to have an independent certified public accounting firm of internationally recognised standing, reasonably acceptable to such other Party, have access during normal business hours, and upon reasonable prior written notice, to such of the books, records, accounts and supporting data of such other Party (and its Affiliates and their respective sublicensees and Distributors) as may be reasonably necessary to verify the accuracy of that payment.  The auditing Party shall not have the right to conduct more than [***]   [Confidential Treatment Required] such audit in any [***]   [Confidential Treatment Required] period during the Term, unless an earlier audit in such period revealed a material inaccuracy in the payment or such audit is required by Applicable Law.  The accounting firm shall disclose in writing to each Party whether such payments are correct or incorrect and the specific details concerning any discrepancies.  The auditing Party shall bear

22

the cost of such audit unless the audit reveals a variance in the amount that should have been paid of more than [***] [Confidential Treatment Required] for the period from the Effective Date or the date of the previous audit (whichever is later) until the date of the audit, in which case the audited Party shall bear the cost of the audit.  The results of such audit shall be final, absent manifest error.  If, based on the results of any such audit, additional payments or refunds are owed by a Party under this Agreement, that Party shall make such additional payments or refunds, with interest from the date originally due, as applicable, [***] [Confidential Treatment Required] after the date on which such accounting firm’s written report is delivered to the Parties.

(k)No Royalties shall be taken into account in the calculation of Operating Profits or Losses.

(l)Any Dispute pertaining to whether any Royalties, other than the [***] [Confidential Treatment Required], are payable in respect of any sale of an Antibody Product shall be determined by the JCT.  If the JCT cannot resolve any such Dispute it shall be referred to the Collaboration Committee for resolution and if the Collaboration Committee is unable to resolve such Dispute, the Dispute shall be decided under the provisions of Article 15 [***] [Confidential Treatment Required].

2.4Employee Obligations

Prior to beginning work relating to any aspect of the subject matter of this Agreement or being given access to UCB Know-How or ImClone Know-How, each employee, consultant or agent of ImClone and UCB, respectively, and their respective Affiliates, sublicensees and Distributors, shall be bound by an agreement pursuant to which:

(a)each such person (other than administrative or non-technical personnel) shall (but in the case of a Party’s own Information and Materials, only to the extent such Party’s employees, consultants or agents are conducting activities pursuant to this Agreement) be obliged to:

(i)follow such Party’s policies and procedures regarding reporting any invention, discovery, process, software program, Information or Material characterised, conceived, developed, derived, discovered, generated, identified or otherwise made by such person in the course of his or her employment or retainer with such Party, including any intellectual property or proprietary right thereto, that falls within Joint Know-How, UCB Know-How or ImClone Know-How;

(ii)assign to such Party all of his or her right, title and interest in and to any such invention, discovery, process, software program, Information or Material characterised, conceived, developed, derived, discovered, generated, identified or otherwise made by such person in the course of his or her employment or retainer with such Party, including any intellectual property or proprietary right thereto;

(iii)co-operate in the preparation, filing, prosecution, maintenance, defence and enforcement of any Patent Rights claiming the same; and

23

(iv)perform all acts and sign, execute, acknowledge and deliver any and all papers, documents and instruments required for effecting the obligations and purposes of that agreement; and

(b)each person shall be bound by obligations of confidentiality and non-use consistent with the terms of this Agreement.  It is understood and agreed that any such agreement need not be specific to this Agreement.

2.51121B

Each Party acknowledges and agrees that any activities conducted by or on behalf of ImClone or its Affiliates with respect to 1121B prior to (and including) the date (if any) ImClone provides UCB with its written confirmation and undertaking pursuant to Article 16.3, do not constitute activities conducted under or in connection with this Agreement.  Notwithstanding any other provision in this Agreement, ImClone has no obligation to transfer any Materials relating to 1121B prior to that date and thereafter any transfer of such Materials shall be subject to Article 4.10.

3.COLLABORATION MANAGEMENT

3.1Establishment of the Collaboration Committee

Within [***] [Confidential Treatment Required] after the Effective Date, the Parties shall form a Collaboration Committee.  The Collaboration Committee shall be composed of an equal number of representatives of each Party (up to a maximum of [***] [Confidential Treatment Required] representatives per Party) appointed (and may be replaced at any time) by such Party on written notice to the other Party.  At least [***] [Confidential Treatment Required] such representative from each of UCB and ImClone, respectively, shall, prior to establishment of the JCT, be a Vice President and, after establishment of the JCT, be a Senior or Executive Vice President or equivalent of their respective company, and all such representatives shall be individuals of suitable authority and seniority with significant experience or expertise in biopharmaceutical drug development, commercialisation or marketing.  Any member of the Collaboration Committee may designate a substitute of equal experience and seniority to attend and perform the functions of that member at any meeting of the Collaboration Committee.  Each Party may invite (at its discretion and with the consent of the other Party) additional employees, or consultants to attend Collaboration Committee meetings.

3.2Collaboration Committee Responsibilities

The Collaboration Committee shall have the general responsibility of overseeing the Development of Antibody Products for Agreed Indications according to the Development Plan, overseeing the Commercialisation of Antibody Products in the Field in the Territory according to the Commercialisation Plan, establishing and managing the annual Development Budget and Commercialisation Budget, overseeing the Manufacturing of the Antibody Products in accordance with the Manufacturing Plan, coordinating a regular flow of information between the Parties, managing the relationship between the Parties, and more generally, making all necessary strategic decisions relating to the collaboration under this Agreement.  In addition, the Collaboration Committee shall, subject to the terms of this Agreement:

24

(a)approve the initial Development Plan, Development Budget, Commercialisation Plan, Commercialisation Budget and Manufacturing Plan and approve any updates and amendments thereto;

(b)determine from time to time whether or not the Parties should continue Development, Manufacturing and Commercialisation of an Antibody Product for an Agreed Indication;

(c)serve as the first forum for attempted settlement of disputes or disagreements arising in other Committees or any other Disputes as set forth in Article 15.1;

(d)approve all Product Trademarks and generic names proposed by the JCT for use with respect to an Antibody Product in consultation with the JPC;

(e)approve all protocols, and changes to protocols, for Clinical Studies for all Antibody Products for Agreed Indications proposed by the JDT;

(f)review all protocols, and changes to protocols, for Clinical Studies for all Antibody Products for Independent Indications referred by the JDT;

(g)review all protocols for Post-Approval Studies in support of Compendia Listings referred by the JDT;

(h)approve all recommendations of the JCT with respect to the product positioning, pricing and reimbursement issues for all Antibody Products;

(i)approve all recommendations of the JDT with respect to the packaging, labelling and language to be included in the Product Labelling of all Antibody Products; and

(j)perform such other functions as are allocated to it under the other provisions of this Agreement or as appropriate to further the purposes of this Agreement as determined by the Parties.

3.3Decision Making; Administrative Matters

(a)Collaboration Committee Decision-Making

All decisions of the Collaboration Committee shall be made by the [***] [Confidential Treatment Required], with the representatives of each Party who are members of the Collaboration Committee[***] [Confidential Treatment Required] in any matter requiring the approval of the Collaboration Committee.  The Parties agree that all decisions by the Collaboration Committee regarding the Development, Commercialisation or Manufacture of an Antibody Product shall be made in the interests of maximising the long-term value of the Antibody Product on a global basis.  If the Collaboration Committee is unable to resolve a dispute regarding any issue, the matter shall be resolved pursuant to the dispute resolution process set forth in Article 15.

25

(b)Procedural Rules

The Collaboration Committee shall establish its own procedural rules for its operation consistent with the terms of this Article 3.  A chairperson for the Collaboration Committee shall be appointed from among its members.  The chairperson shall be appointed on an annual basis and shall alternate each Contract Year between a UCB representative and an ImClone representative, UCB being responsible for designating the chairperson for the first Contract Year.  The chairperson shall be responsible for calling meetings of the Collaboration Committee in accordance with Article 3.3(c) and for leading the meetings.  One member representing the Party that did not appoint the chairperson shall serve as secretary of that meeting.  The secretary of the meeting shall prepare and distribute ([***] [Confidential Treatment Required] following each meeting) to all members of the Collaboration Committee the minutes of the meeting.  Such minutes shall provide a description in reasonable detail of the discussions held at the meeting and a list of any actions, decisions or determinations approved by the Collaboration Committee at such meeting.  The minutes of each Collaboration Committee meeting shall be approved or disapproved by each Party’s Collaboration Committee representatives, and revised as necessary, at the next meeting of the Collaboration Committee.  Final minutes of each meeting shall be distributed promptly thereafter to the members of the Collaboration Committee by the chairperson.

(c)Meetings

The Collaboration Committee shall meet at least every [***] [Confidential Treatment Required] and in addition within [***] [Confidential Treatment Required] of a request by any Collaboration Committee member to have such a meeting.  Such meetings shall be held at such times as are mutually agreed upon by the Collaboration Committee.  Meetings may take place by video conference or telephone conference or such other means as the Collaboration Committee shall decide, provided, however, that all members of the Collaboration Committee shall meet in person at least once per Contract Year, unless otherwise agreed by the Parties.  Meetings held in person shall alternate between ImClone and UCB designated locations.  The first meeting shall be held at UCB’s facilities.

(d)Appointment of Sub-Teams and Subcommittees

The Collaboration Committee is empowered to create such sub-teams or subcommittees of itself as it may deem appropriate or necessary.  Each such sub-team or subcommittee shall report to the Collaboration Committee, who shall have authority to approve or reject recommendations or actions proposed subject to the terms of this Agreement.  No sub-team or subcommittee shall have authority to make any decision binding upon the Collaboration Committee or the Parties.  For the avoidance of doubt, a Party may appoint an individual as its representative on more than one Committee.

3.4Establishment of the Joint Patent Committee or JPC

[***] [Confidential Treatment Required] after the Effective Date, the Parties shall establish a JPC.  The JPC shall be comprised of one (1) senior patent attorney from each Party as appointed by such Party.  A Party may replace its representative from time to time upon written notice to the other Party.  The JPC shall exist until the expiration or termination of this Agreement.  All decisions of the JPC shall be

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unanimous.  In the event that a decision cannot be reached by the JPC, the dispute shall be resolved pursuant to the dispute resolution process set forth in Article 15.  Unless the Parties otherwise agree, the JPC shall continue after termination of this Agreement for the purpose of co-ordinating the Parties activities in relation to Joint Patent Rights but for no other purpose.

3.5Joint Patent Committee Responsibilities

The JPC shall be responsible for:

(a)reviewing and, so far as permitted in Article 10, approving patent, trademark and other intellectual property strategy and, to the extent applicable, patent, trademark and other intellectual property litigation strategy;

(b)coordinating patent, trademark and other intellectual property related activities as allocated to it pursuant to this Agreement;

(c)consulting with the Collaboration Committee with regard to proposals by the JCT for Product Trademarks and generic names for use with respect to an Antibody Product;

(d)following approval of Product Trademarks for Antibody Products by the Collaboration Committee, obtaining and maintaining the Product Trademarks and domain names incorporating any of the same or otherwise referencing Antibody Products;

(e)periodically reporting to the Collaboration Committee on the status of intellectual property matters affecting the Development, Commercialisation and Manufacture of Antibody Products as requested by the Collaboration Committee; and

(f)in accordance with Article 10.1(e) and subject to Articles 15.1 and 15.6, making decisions relating to the characterisation of any Information, Materials or Patent Rights as ImClone Core Patent Rights, UCB Core Patent Rights, Joint Know-How and Joint Patent Rights, including during any transfer plan or Transition Plan established under Articles 8.6 and 12.8.

3.6Limitations on the Authority of Committees and Teams

Notwithstanding the Committee structure established pursuant to this Agreement, each Party shall retain the rights, powers and discretion granted to it under this Agreement, and no such rights, powers, or discretion shall be delegated to or vested in a Committee unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing.  For clarity, amendments to this Agreement may only be made in accordance with Article 17.1.

3.7Operational and Day-to-Day Decisions

Subject to Article 2.1(d), all operational and day-to-day decisions with respect to matters and functions allocated or delegated to a Party in the Development Plan, the Manufacturing Plan or the Commercialisation Plan, or, with respect to Independent Indications, assigned to the Continuing Party under this Agreement, unless

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specifically reserved for approval by a Committee hereunder, shall be deemed to be within the decision-making authority of such Party; provided that all such decisions shall be consistent with the Development Plan, Commercialisation Plan and Manufacturing Plan, as applicable, the scope of such allocation or delegation and the terms and conditions of this Agreement.

4.DEVELOPMENT OF ANTIBODY PRODUCTS

4.1Activities

Without limiting the obligations under Article 2.1 or the Development Plan, each Party shall undertake the following activities:

(a)subject to Article 4.10 in relation to Materials, from time to time transfer to the other Party ImClone Know-How and UCB Know-How in such Party’s Control [***] [Confidential Treatment Required] to conduct its Development activities under the Development Plan in respect of Antibody Products for Agreed Indications or to conduct its Development activities in respect of Antibody Products for Independent Indications for which the other Party is the Continuing Party;

(b)conduct, or, as applicable, assist the other Party in conducting, all relevant studies, including Clinical Studies, for Antibody Products for Agreed Indications and, [***] [Confidential Treatment Required], assist such other Party in conducting such studies for Antibody Products for Independent Indications for which such other Party is the Continuing Party; and

(c)in a manner consistent with Article 5 and the other terms of this Agreement, make, or, as applicable, assist the other Party in making, all filings with and supporting all communications with the relevant Regulatory Authorities or other governmental or regulatory entities necessary to conduct such studies or to seek Regulatory Approvals for Antibody Products for Agreed Indications and, if applicable, Independent Indications for which the other Party is the Continuing Party.

4.2Collaboration Development

Each Antibody Product shall be Developed by the Parties for each Agreed Indication for such Antibody Product in accordance with the Development Plan unless and until such Agreed Indication becomes an Independent Indication pursuant to Article 8.

4.3Costs

Subject to Articles 4.5, 8.9 and the other terms of this Agreement, ImClone and UCB shall bear Development Costs as follows:

(a)Development Costs in Agreed Indications

The Parties shall share equally in all Development Costs related to the Development of an Antibody Product for Agreed Indications incurred in the conduct of the Development Plan and, subject to Article 4.5, in accordance

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with the Development Budget, regardless of whether such expenses are incurred before, on or after the Effective Date.

(b)Development Costs in Independent Indications

The Development Costs related to the Development of an Antibody Product for an Independent Indication shall be borne solely by the Continuing Party [***] [Confidential Treatment Required].

4.4Quarterly Reconciliation of Development Costs

The Parties shall use the procedure set out in Schedule 2 for any applicable reconciliation of Development Costs.

4.5Development Budget

(a)Each Party shall prepare and submit to the other Party (via the JDT) for each Contract Year a proposed budget for its activities for such Contract Year, in accordance with the Development Plan, in support of the Development of Antibody Products for Agreed Indications in a format to be agreed by the Parties, but which budget must include (i) line item estimates of Development Costs for each Agreed Indication by function for that Contract Year; and (ii) in respect of any Development activities which will not be completed within that Contract Year line item estimates of the total Development Costs required to complete such Development activities on an activity-by-activity basis (regardless of whether such Development Costs will be incurred in that Contract Year or subsequent Contract Years).  Unless otherwise agreed by the Parties, for the first Contract Year these budgets shall be submitted within [***] [Confidential Treatment Required] after the date on which the Collaboration Committee approves the initial Development Plan pursuant to Article 4.7(a) and, thereafter, no later than [***] [Confidential Treatment Required] prior to the start of each subsequent Contract Year.  Unless otherwise agreed by the Parties, the Collaboration Committee shall review, revise and approve these budgets within [***] [Confidential Treatment Required] after the date on which the Collaboration Committee approves the initial Development Plan pursuant to Article 4.7(a) and, thereafter, no later than [***] [Confidential Treatment Required] prior to the commencement of each Contract Year (each such approved budget, a Development Budget).  Once approved, the Collaboration Committee shall modify the Development Budget from time to time based upon the results of Clinical Studies and other unanticipated events, provided that save as set out in Article 4.5(b), in no event shall the Development Budget for a Contract Year, or, any line item estimate within the Development Budget for the total Development Costs required to complete any Development activity which will not be completed within that Contract Year, be varied by more than [***] [Confidential Treatment Required], without the consent of the JDT (or the Collaboration Committee if the JDT cannot agree), [***] [Confidential Treatment Required].  If the Development Plan is updated or amended by the Collaboration Committee pursuant to Article 4.7 or Article 8.6 with respect to the then-current Contract Year, the Parties shall prepare and submit proposals for any

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necessary amendments to the Development Budget for such Contract Year within [***] [Confidential Treatment Required] after such update or amendment to the Development Plan and the Collaboration Committee shall review, revise and approve any necessary amendments to the Development Budget for such Contract Year [***] [Confidential Treatment Required] after such update or amendment of the Development Plan.

(b)In any Contract Year, each Party shall promptly inform the other Party upon such Party determining that it is likely to overspend or underspend by more than [***] [Confidential Treatment Required] its respective total Development Costs for an activity set forth in the Development Budget for that Contract Year.  If in any such Contract Year a Party exceeds its budgeted costs and expenses by more than [***] [Confidential Treatment Required] for an activity, the Party that has so exceeded its budget shall provide to the JDT and to the Collaboration Committee (if the matter is escalated to the Collaboration Committee because it cannot be resolved by the JDT) a full explanation for exceeding the Development Budget for such activity.  [***] [Confidential Treatment Required], the JDT or Collaboration Committee (as applicable) may, by unanimous agreement and not subject to a [***] [Confidential Treatment Required], allow some or all of any other overspend to be included in the Development Costs as it considers equitable under the circumstances.  Where any Development Budget sets out a line item estimate for the total Development Costs required to complete any activity which will not be completed within that Contract Year:  [***] [Confidential Treatment Required].  To the extent that any overspend is not included in Development Costs as provided in this Article 4.5, the Party who has exceeded its budget by more than [***] [Confidential Treatment Required] will be solely responsible for the overspend.

4.6Establishment of Joint Development Team

Within [***] [Confidential Treatment Required] after the Effective Date, the Parties shall form a Joint Development Team (JDT).

(a)The JDT shall consist of up to [***] [Confidential Treatment Required] representatives of each Party.  Each member of the JDT shall have appropriate experience in the development of Antibody products.  One such representative from each Party shall be designated as that Party’s Development Team Leader to act as the primary JDT contact for that Party.  Together, the Development Team Leaders will be jointly responsible for managing the JDT.  Each Party’s Development Team Leader shall be responsible for ensuring that his/her Party carries out the activities assigned to such Party under the Development Plan.  Either Party may replace any or all of its representatives on the JDT at any time upon written notice to the other Party.  Any member of the JDT may designate a substitute to attend and perform the functions of that member at any meeting of the JDT.  Each Party may invite [***] [Confidential Treatment Required] additional employees or consultants to attend the JDT meetings.  The JDT shall be empowered to create such sub-teams or subcommittees as it may deem appropriate or necessary.  Each such sub-team or subcommittee shall report to the JDT, which shall have authority to approve or reject recommendations or actions proposed, subject to the terms of this

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Agreement.  No sub-team or subcommittee shall have authority to make any decision binding upon the JDT or the Parties.  The JDT shall meet, at least once each Calendar Quarter, or more frequently as agreed by the JDT.  To the extent that meetings are held in person, the location of regularly scheduled JDT meetings shall alternate between the offices of the Parties unless otherwise agreed.  Meetings may be held by videoconference or telephonically.  Meetings shall be chaired by a single JDT representative of one of the Parties, with the Party responsible for designating the chairperson alternating each Contract Year and with ImClone being responsible for designating the chairperson for the first Contract Year.  The Party that does not provide the chairperson shall designate a member of the JDT to record, in sufficient detail, minutes of the discussions and decisions of the JDT.  Such minutes shall be circulated to the Parties promptly following the meeting for review, comment and, after approval from [***] [Confidential Treatment Required], distribution.  The Parties shall endeavour to manage the business and meetings of the JDT in the most cost-effective way possible.

(b)JDT Responsibilities

With respect to the Development of Antibody Products, the JDT shall have the responsibility, except as otherwise set forth in this Agreement, of:

(i)overseeing and coordinating the day-to-day implementation of the Development Plan by the Parties;

(ii)reviewing the outline for the Development Plan and making recommendations to the Collaboration Committee with respect to the conversion of the outline for the Development Plan into the initial Development Plan in accordance with Article 4.7 and, following approval of the initial Development Plan by the Collaboration Committee, recommending updates and amendments to the Development Plan to the Collaboration Committee in accordance with Article 4.7;

(iii)allocating to the Parties responsibilities for Development activities that are not otherwise assigned to a Party in the Development Plan, provided that no such allocation shall be made (other than as provided in the Development Plan agreed by the Parties) to a Party without such Party’s consent[***] [Confidential Treatment Required];

(iv)making decisions regarding the design and strategic implementation of all Development programmes for Agreed Indications and selecting and appointing contract research organisations;

(v)selecting and designing Clinical Studies for Agreed Indications, and prior to the commencement of each Clinical Study for Agreed Indications, specifying when that Clinical Study will be deemed to be complete for the purposes of this Agreement;

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(vi)proposing protocols, and changes to protocols, for Clinical Studies for all Antibody Products for Agreed Indications to the Collaboration Committee for approval;

(vii)reviewing all designs and protocols for Clinical Studies for all Antibody Products for Independent Indications that have been submitted by the Continuing Party pursuant to Article 8.3 and referring such protocols to the Collaboration Committee;

(viii)identifying Manufacturing needs and requirements of Clinical Supplies of Antibody Products, placebos and comparators and implementing an appropriate forecasting mechanism to provide the Manufacturing Coordinator with sufficient lead-time to Manufacture or have Manufactured and supply the Parties’ requirements of Clinical Supplies of Antibody Products, placebos and comparators;

(ix)devising the content of and filing strategy for Drug Approval Applications for Agreed Indications;

(x)reviewing and approving any documents or reports to be filed by a Filing Party with the FDA or any other Regulatory Authority with respect to Agreed Indications;

(xi)through the representatives on the JDT with regulatory expertise and in consultation with the JCT, coordinating interactions with Regulatory Authorities and developing and implementing standard operating procedures for adverse event reporting between the Parties and compliance with other regulatory requirements in the Territory consistent with and subject to Article 5;

(xii)consulting with the Continuing Party for an Antibody Product for an Independent Indication with respect to the Development of such Antibody Product for such Independent Indication;

(xiii)consulting with the JCT as to the design and conduct of Post-Approval Studies;

(xiv)in consultation with the JCT, making recommendations to the Collaboration Committee with respect to the packaging, labelling and language to be included in the Product Labelling of all Antibody Products;

(xv)reviewing all designs and protocols for Post-Approval Studies in support of Compendia Listings that have been submitted by either Party pursuant to Article 4.7(e) and referring such protocols to the Collaboration Committee;

(xvi)exchanging information and facilitating cooperation and coordination between the Parties as they exercise their respective rights and meet their respective obligations with respect to Development under this Agreement; and

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(xvii)resolving any complaint by a Party that the Development, Commercialisation or Manufacturing activities of the other Party are adversely affecting, or may adversely affect, the Development of Antibody Products in the Territory of the Party making the complaint.

The JDT will be responsible for all other activities assigned to it by the Collaboration Committee with respect to Agreed Indications and shall provide the Collaboration Committee with Quarterly reports of its activities.

(c)JDT Decision-Making

Decisions of the JDT shall be made by [***] [Confidential Treatment Required].  If the JDT is unable to resolve a dispute regarding any issue, the matter shall be resolved pursuant to the dispute resolution process set forth in Article 15.

(d)Ceasing of JDT Operations

The JDT will cease operations and have no further function under this Agreement on the date on which the Parties are no longer engaging in Development of any Antibody Product for an Agreed Indication, provided that the JDT shall recommence operations if the Parties recommence Development of an Antibody Product for an Agreed Indication Converted pursuant to Article 8.9.

(e)Annual Development Reports

The JDT shall submit annual reports with respect to the Development of Antibody Products for Agreed Indications to the Collaboration Committee as part of each annual recommended update to the Development Plan with respect to Agreed Indications.  The Continuing Party with respect to an Independent Indication shall submit annual reports with respect to the Development of Antibody Products for such Independent Indication to the Collaboration Committee.  Each such report shall include non-binding forecasts of the Parties’ requirements of Clinical Supplies of Antibody Products, placebo and comparators for Agreed Indications and Independent Indications (which forecasts shall be provided by the applicable Continuing Party) for the Territory for the then current year and the following [***] [Confidential Treatment Required] and any other related information that the JDT determines, or is requested by the Collaboration Committee, to include.

4.7Development Plans and Additional Indications

(a)The JDT shall review the outline for the Development Plan, attached hereto as Schedule 3, and shall make recommendations to the Collaboration Committee with respect to the conversion of the outline for the Development Plan into the initial Development Plan within [***] [Confidential Treatment Required] after the Effective Date.  The Collaboration Committee shall use all [***] [Confidential Treatment Required] to approve the initial Development Plan as soon as reasonably practicable following receipt of such recommendations from the JDT and in any event (unless otherwise agreed by the Parties) no

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later than [***] [Confidential Treatment Required] after the Effective Date.  Following agreement of the Development Plan by the Collaboration Committee, the JDT shall review the Development Plan at least Quarterly, and shall make recommendations to the Collaboration Committee with respect to the initial Development Plan and subsequently any updates or amendments thereto with respect to any existing Agreed Indications or any proposed new Indications for an Antibody Product, including for an earlier line of therapy for an existing Agreed Indication.  Any such recommendations shall include a good faith estimate of the budget for any such update or amendment, including any changes in the existing Development Budget.  Each Party shall cooperate with the JDT in preparing such estimated budget.

(b)Neither the initial Development Plan nor any update or amendment to the Development Plan shall become effective until it is approved by the Collaboration Committee or, if the Collaboration Committee cannot reach agreement on an update or amendment, until such time as may be agreed in accordance with the dispute resolution process set forth in Article 15.1(b).  Except as provided in Article 8, any update or amendment shall provide for the joint Development by the Parties of Antibody Products for the Agreed Indications and shall, subject to the proviso in Article 4.6(b)(iii), assign responsibility for Development activities between the Parties considering:  (i) the allocation of responsibility set out in the initial Development Plan, (ii) the respective Territorial Lead, (iii) expertise and available resources, and (iv) the ability to use the Parties’ respective existing facilities and infrastructure.

(c)With respect to additional Indications for an Antibody Product proposed by the JDT or one or both of the Parties pursuant to Article 4.7(a), the Collaboration Committee shall have the right with the mutual agreement of the Parties, in their sole and absolute discretion, to designate such Indication as an Agreed Indication, in which case the Collaboration Committee shall (i) approve any updates or amendments to the Development Plan and Development Budget with respect thereto, with any Disputes with respect to such updates and amendments to be resolved pursuant to Article 15, but, for clarity, not the [***] [Confidential Treatment Required] process in Article 15.2, and (ii) Develop and Commercialise such Antibody Product for such Agreed Indication as provided in this Agreement.  [***] [Confidential Treatment Required].

(d)If the Parties do not agree to designate an Indication as an Agreed Indication for an Antibody Product and the Development and Commercialisation of such Antibody Product for such Indication is not, at that time, reasonably likely to have an adverse effect on the Development and Commercialisation of the Antibody Product for Agreed Indications in the Territory, then the Party that did not object to such designation shall have the right, on written notice to the other Party provided within [***] [Confidential Treatment Required] after the meeting of the Collaboration Committee in which the Indication was rejected pursuant to Article 4.7(c), to Develop and conduct Post-Approval Studies for such Antibody Product for such Indication in the Territory and to seek, obtain and maintain Regulatory Approval for and Commercialise such Antibody Product for such Indication in any country in which such Party is the

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Territorial Lead, in each case as an Independent Indication pursuant to Article 8 and the other Party shall have no right to Develop or to seek, obtain or maintain Regulatory Approval for such Indication in the countries for which such other Party is Territorial Lead except as permitted in Article 8.9.  Any Dispute as to whether the Development or Commercialisation of a new Indication for an Antibody Product is reasonably likely to have an adverse effect on the Development and Commercialisation of an Antibody Product for Agreed Indications in the Territory shall be subject to the dispute resolution provisions of Article 15[***] [Confidential Treatment Required].

(e)Notwithstanding anything in this Agreement to the contrary, neither Party shall have the right to Develop an Antibody Product for an Indication other than an Agreed Indication or an Independent Indication, including for another line of therapy for an existing Agreed Indication or Independent Indication, inside or outside of the scope of this Agreement without the consent of the other Party.  For clarity, each Party shall have the right to conduct Post-Approval Studies in support of Compendia Listings for Antibody Products for new Indications in accordance with the applicable Commercialisation Plan and Applicable Law, provided that all designs and protocols for such Post-Approval Studies in support of Compendia Listings have been submitted to the JDT for review and, in the case of the protocols, reviewed by the Collaboration Committee, prior to commencement of that Post-Approval Study.

(f)[***] [Confidential Treatment Required]

4.8Compliance with Applicable Law

In performing Development activities, each Party shall comply with all Applicable Law.

4.9Clinical Studies

(a)Agreed Indications

The Parties shall conduct Clinical Studies for Antibody Products for Agreed Indications in accordance with the Development Plan.  All clinical data and reports related to Clinical Studies for Antibody Products for Agreed Indications shall be [***] [Confidential Treatment Required].  Each Party shall have full use, for any purpose consistent with this Agreement, of all such data and reports related to Clinical Studies in Agreed Indications for an Antibody Product.  Once finalised, all data, database information and reports from all Clinical Studies for Antibody Products for Agreed Indications shall be centralised and held at a location to be chosen by the Collaboration Committee, with a duplicate set available to each Party for deposit at a site of its own selection.

(b)Independent Indications

All clinical data and reports related to Clinical Studies for Independent Indications for an Antibody Product shall [***] [Confidential Treatment

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Required] and that Continuing Party shall have the right to control all such data, database information and reports from Clinical Studies for such Independent Indication, including maintaining the foregoing at a separate location.  The Non-Continuing Party with respect to an Independent Indication for an Antibody Product shall not have the right to use, access or reference such data, information or reports, provided that, subject to the restrictions on Development and marketing set forth in Article 8.1, the Non-Continuing Party shall have the right to reference such data and reports with respect to such Independent Indication as are necessary to obtain and maintain Regulatory Approvals for Agreed Indications for such Antibody Product or for other Independent Indications for which such Non-Continuing Party is the Continuing Party, in each case, in the countries in which the Non-Continuing Party is the Territorial Lead.

4.10Development Materials

The Parties agree that (i) to the extent that a Party would otherwise be required to transfer to the other Party Materials that are [***] [Confidential Treatment Required]for the other Party to conduct its Development activities under this Agreement, the transfer of such Materials shall be at the discretion of the transferring Party; (ii) any Materials provided by one Party to the other Party pursuant to this Agreement and any Material produced against or with, or otherwise derived from, such Materials shall be used solely for the Development activities as provided in the Development Plan or the plan for Independent Indications referred to in Article 8.3(a), and in material compliance with all Applicable Law and, except as agreed by the Parties, Materials provided to one Party by the other shall not be made available to any Third Party by the receiving Party without the prior written consent of the providing Party [***] [Confidential Treatment Required]; (iii) any Materials provided by one Party to the other Party pursuant to this Agreement are provided without any warranties, express or implied; and (iv) all right, title and interest in and to any Materials provided by one Party to the other Party pursuant to this Agreement, including any replication, copy or progeny thereof, shall be, and remain, vested in such providing Party.  Any Dispute in relation to this Article 4.10 shall be resolved by the Collaboration Committee and if the Collaboration Committee is unable to resolve such Dispute, the Dispute shall be decided under the provisions of Article 15 ([***] [Confidential Treatment Required]).

5.REGULATORY AFFAIRS

5.1Rights and Responsibilities with respect to Antibody Products

(a)The Parties shall consult and cooperate with each other on all matters relating to, and in communications with, Regulatory Authorities.  The Parties will coordinate all communications with Regulatory Authorities in [***] [Confidential Treatment Required] to ensure consistent and clear communication with those Regulatory Authorities.  In addition, each Party will discuss in advance with the other Party any planned communication with any Regulatory Authority in [***] [Confidential Treatment Required].

(b)Unless otherwise agreed by the Parties or otherwise provided in this Agreement, the Territorial Lead shall, as between the Parties, be responsible

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for filing and procuring the submission of the INDs and Drug Approval Applications and seeking, obtaining and maintaining Regulatory Approvals for Antibody Products for Agreed Indications in each country for which it is the Territorial Lead (the Party conducting such filing and procuring in a country, the Filing Party with respect to such country), provided that if a Party is a Manufacturer of an Antibody Product, then such party shall be the Filing Party with respect to submissions and communications governed by this Article 5 with respect to such Manufacture and in any event the Manufacturing Coordinator and the Manufacturer, as applicable, shall provide the other Party or Parties (as the case may be) all such chemistry, manufacturing and controls material and such other data (or a drug master file or equivalent outside the United States containing the same) and grant each Party such rights of reference as are in each case necessary to obtain and maintain such INDs, Drug Approval Applications and Regulatory Approvals as set forth in Article 7.5.  Notwithstanding the foregoing, each Party’s obligation to obtain Regulatory Approvals shall be limited as set out in Articles 2.1(a)(ii) and 2.1(a)(iii) (as applicable) unless otherwise agreed in writing by the Parties.  For clarity, as set forth in Article 8.2 and 8.4(a), the Continuing Party shall, except where the Manufacturer is the Filing Party as set out above, be the Filing Party with respect to an Antibody Product for an Independent Indication for which it is the Continuing Party (i) for an IND throughout the Territory, and (ii) for a Drug Approval Application in the Territory for which it is the Territorial Lead.

(c)The Filing Party shall comply with all Applicable Law relevant to its responsibilities pursuant to Articles 5.1(a) and (b).  The Filing Party shall use [***] [Confidential Treatment Required] to perform the activities contemplated under this Agreement, with the oversight of the JDT and in accordance with the Development Plan for the Agreed Indications.  Prior to submitting an IND, Drug Approval Application or other document in support of a Regulatory Approval for an Antibody Product for an Agreed Indication, the Parties, through the JDT, shall consult and cooperate in preparing such filings.  Each Party shall have the right to review and comment on all INDs, Drug Approval Applications and other documents in support of a Regulatory Approval for an Antibody Product for an Agreed Indication in accordance with specific timelines or other arrangements agreed upon by the JDT, and no such filing for an Antibody Product for an Agreed Indication shall be made unless the JDT has approved the form and content of such filing.  With respect to an Antibody Product for an Independent Indication, the Continuing Party for such Independent Indication shall, subject to Article 2.1(d), control the scope, content and timing of filing of INDs, Drug Approval Applications and other documents in support of Regulatory Approvals with respect to Antibody Products in such Independent Indication in accordance with Article 8. Unless otherwise required by relevant Regulatory Authorities, this Agreement or Applicable Law, all regulatory documents shall be held by the Filing Party at a site of its selection and the Filing Party shall provide the other Party with a duplicate set of such regulatory documents to be held by the other Party at a site of the other Party’s own selection.  Unless otherwise agreed by the JDT and subject to the terms of this Agreement, the Filing Party shall own all regulatory submissions, including all INDs, Drug Approval

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Applications, Regulatory Approvals and other government licences, approvals and certificates for Antibody Products in the applicable jurisdiction.  For an Antibody Product for an Independent Indication, where the Filing Party is operating in a country where it is not the Territorial Lead, the Territorial Lead shall provide all reasonable cooperation and assistance to the Filing Party with respect to such regulatory submissions.

(d)Except as otherwise expressly provided in this Agreement, without the prior written approval of the Collaboration Committee, the Filing Party shall not transfer title or otherwise dispose of or grant any rights or interests, including any rights of reference, in or to, any INDs, Drug Approval Applications, Regulatory Approvals or other government licences, approvals or certificates for an Antibody Product in the Territory, or otherwise impair the other Party’s rights in such INDs, Drug Approval Applications, Regulatory Approvals or other government licences, approvals or certificates.

(e)Within a reasonable time prior to filing, the Filing Party shall provide the other Party with a copy of all documents or reports to be filed with the FDA or any other Regulatory Authority under this Agreement (or, if not feasible, the Filing Party shall provide the other Party with on-site or electronic access to such documents or reports, with reasonable advance written notice of the availability of each such document or report), including with respect to any IND, Drug Approval Application, Regulatory Approval or other government licence, approval or certificate for an Antibody Product, and any data packages in support thereof.  The JDT for Agreed Indications, and the Continuing Party for an Independent Indication, shall approve the form and content of all such documents or reports prior to filing.  Other communications and interactions of either Party with Regulatory Authorities related to Antibody Products shall be subject to the terms of Article 5.4.

(f)The content and language of the proposed Product Labelling, and all changes to it, including all safety-related package insert changes for Antibody Products shall be prepared by the JDT for Agreed Indications and by the Continuing Party, in consultation with the JDT, for any Independent Indication, and shall be approved by the Collaboration Committee prior to submission to the applicable Regulatory Authority.

(g)Nothing in this Article 5.1 is intended or shall be construed to prevent or delay a Party or its Affiliates from making any filing with or submission to, or responding to requests from, or complying with any requirements of, the Regulatory Authorities in the Territory as required by Applicable Law, provided that such Party or its Affiliates used [***] [Confidential Treatment Required], as appropriate in such circumstances, to comply with the foregoing provisions of this Article 5.1.

(h)Notwithstanding anything to the contrary in this Agreement, and subject to the terms of Article 11, the Filing Party shall have the right to receive from the other Party (and the other Party shall provide to the Filing Party) any regulatory data or Information Controlled by the other Party related to an Antibody Product, which the Filing Party, as the holder of any IND, Drug Approval Application, Regulatory Approval or other government licences,

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approvals or certificates in the applicable jurisdiction, is required to have by Applicable Law, or to which a Regulatory Authority having jurisdiction wishes to have access, or which the Filing Party reasonably requires in order to carry out its responsibilities pursuant to this Agreement.

5.2Access to INDs and Drug Approval Applications

To the extent that it is reasonably possible to do so, each Filing Party shall (a) in relation to Agreed Indications, grant the other Party, and (b) in relation to Independent Indications, grant to the Continuing Party, a right of access and reference to (and if permitted, name it a party of record on) all INDs, Drug Approval Applications, Regulatory Approvals and other government licences, approvals or certificates and shall promptly notify Regulatory Authorities of (and as soon as is reasonably practicable after such notification take all actions reasonably necessary to effect or evidence) the other Party’s right of access and reference to (and if permitted, naming the other Party as a party of record on) such INDs, Drug Approval Applications, Regulatory Approvals and other government licences, approvals or certificates.

5.3Adverse Event Reporting; Customer Complaints

(a)Each Party shall maintain a record of, and where required by Applicable Law follow-up on, all non-medical and medical product-related complaints and reports of adverse events that it receives with respect to any Antibody Product.  Each Party shall promptly notify the other Party of any complaint or adverse event report received by it and shall provide the other Party with a copy of such complaint or adverse event report as soon as reasonably possible following initial receipt (and in any event no later than (i) within [***] [Confidential Treatment Required] of initial receipt for any complaint or adverse event report relating to death or life threatening illness, or (ii) within [***] [Confidential Treatment Required] of initial receipt for any other complaint or adverse event report, or, in each case, such shorter period as may be required to comply with Applicable Law).

(b)The Filing Party shall be responsible for reporting to Regulatory Authorities any adverse events and safety issues for such Antibody Product, in compliance with the requirements of Applicable Law, and shall simultaneously provide the other Party with a copy of such report.  If there is reasonably sufficient time available to do so, the Filing Party shall give the other Party an opportunity to review, and the Parties shall consult with each other, prior to submission of any such report.

(c)As soon as reasonably practicable, the Parties shall, through their pharmacovigilance departments, meet, determine and adopt detailed procedures for the collection, review, assessment, tracking and filing of Information related to complaints and adverse events associated with Antibody Products and shall meet periodically to update the procedures.

5.4Communications

(a)In addition to the responsibilities in Article 5.1, each Filing Party shall have primary and, except as may be required by Applicable Law or requested by

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any Regulatory Authority, exclusive responsibility for all correspondence and for any official communications with Regulatory Authorities in the jurisdictions and for the Indications for which it is the Filing Party.  Each Party shall reasonably cooperate with the other Party regarding any direct communications with the Regulatory Authorities.

(b)Each of the Parties shall have the right to (i) be present at all scheduled meetings with Regulatory Authorities having jurisdiction in any part of the Territory, and (ii) be present on all telephone calls with Regulatory Authorities having jurisdiction in any part of the Territory where any matter which may affect its activities or studies is to be discussed.

(c)Except as may be required by Applicable Law or requested by the Filing Party or any Regulatory Authority having jurisdiction with respect to a country or matter, the other Party shall not independently communicate regarding an Antibody Product with any Regulatory Authority having jurisdiction with respect to such country or matter.  The other Party shall keep the Filing Party informed of any such required communications.

(d)Regarding the Manufacture of an Antibody Product, each of the Parties shall have the right (and the Manufacturing Coordinator shall procure that the Manufacturer shall, at the request of the Filing Party, have the obligation), to be present at all meetings and on all telephone calls with, and at all inspections by, Regulatory Authorities where issues regarding the Manufacturing of such Antibody Product are to be discussed or where required by Applicable Law.

(e)Each Party shall promptly notify and provide the other Party with a copy of any correspondence or other reports or complaints submitted to or received by the first Party from any Regulatory Authority, other governmental authority, industry association or other Third Party (i) claiming that any Promotional Materials or Promotional or Detailing activities are inconsistent with the Product Labelling or are otherwise in violation of any Applicable Law, or (ii) making any other claim or assertion with regard to an Antibody Product that could be reasonably expected to have an adverse effect on the Development, Commercialisation or Manufacture of such Antibody Product in the Territory, including any communication with respect to safety.

5.5Recalls

(a)The Parties shall exchange their internal standard operating procedures as to product recalls and market withdrawals (SOPs) reasonably promptly after the first filing of a Drug Approval Application for an Antibody Product and thereafter reasonably promptly after any time such SOPs are approved or modified.  In the event that, in a country, a Party determines that an event, incident or circumstance has occurred which may result in the need for a recall or market withdrawal or stock recovery (collectively referred to as a Recall), of Antibody Product or any lot(s) of Antibody Product, such Party shall promptly notify the other Party in writing.

(b)The Territorial Lead in a country shall have the right to determine whether and upon what terms and conditions to Recall an Antibody Product in such

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country.  Prior to making any Recall decision, each Party shall consult with the other Party.  The Filing Party shall be responsible for discussions with Regulatory Authorities within the applicable country regarding all aspects of the Recall decision and the execution of any Recall.  Any costs or expenses of any Recall shall be a Commercialisation Expense for the applicable country for an Agreed Indication and shall be borne by the Continuing Party with respect to an Independent Indication, provided that, to the extent that such Recall with respect to an Agreed Indication or an Independent Indication is caused by or results from the negligence or wilful misconduct of a Party, its Affiliates or permitted sublicensees or Distributors, or their respective directors, officers, employees or agents, [***] [Confidential Treatment Required].  UCB and ImClone shall each maintain complete and accurate records of any Recall it has the right to control pursuant to this Article 5.5 for such periods as may be required by legal requirements, but in any event for no less than [***] [Confidential Treatment Required].

5.6Applications for Regulatory Exclusivity

The Parties recognise that exclusivity rights granted or provided for under Applicable Law may be commercially significant to Antibody Products.  To the extent permitted by such Applicable Law, as between the Parties, the Territorial Lead for a country with respect to Agreed Indications and the Continuing Party for an Independent Indication shall have the exclusive right to file for, request and maintain any regulatory exclusivity rights for Antibody Product in such country (including data and marketing exclusivity rights, regulatory exclusivity rights based upon an orphan drug designation of an Antibody Product for an Agreed Indication or Independent Indication and exclusivity following submission of pediatric study data) and to conduct and prosecute any proceedings or actions to enforce such regulatory exclusivity rights in countries for which it is the Territorial Lead.  For the avoidance of doubt, any costs incurred by the Parties in obtaining, maintaining or enforcing such exclusivity rights shall be treated as Development Costs, except to the extent that such costs relate solely to an Independent Indication (with respect to Development or Post-Approval Studies, in the Territory and with respect to Commercialisation (except Post-Approval Studies), in the countries for which the Continuing Party is the Territorial Lead) [***] [Confidential Treatment Required].

6.COMMERCIALISATION OF ANTIBODY PRODUCTS

6.1Territorial Lead

(a)The Territorial Lead shall use [***] [Confidential Treatment Required]to maximise the Operating Profit of each Antibody Product for Agreed Indications in the countries for which it is the Territorial Lead.

(b)The Territorial Lead shall be responsible for the selection, appointment and management of the sublicensees and Distributors in the countries for which it is the Territorial Lead in accordance with the provisions of Article 6.2.

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6.2Distributors and Co-Promotion

(a)Subject to Articles 6.2(b) and Article 9.5, a Territorial Lead may appoint Distributors or Co-Promotion partners in any country for which it is the Territorial Lead, subject to first obtaining the agreement of the other Party, [***] [Confidential Treatment Required]

(b)Prior to appointing any Third Party as a Distributor or to Co-Promote an Antibody Product in any country for which it is the Territorial Lead, the Territorial Lead shall give the other Party written notice of its intention to do so (such notice to include a description, in reasonable detail, of the nature and scope of the relevant Distributor or Co-Promotion activity) and shall give the other Party the right of first refusal to undertake that Distributor or Co-Promotion activity itself.  Within [***] [Confidential Treatment Required] of receipt of such notice, the other Party shall, by notice in writing to the Territorial Lead, either:  (i) elect not to undertake that Distributor or Co-Promotion activity, in which case the Territorial Lead may proceed with the appointment of the Third Party to undertake that Distributor or Co-Promotion activity pursuant to Article 6.2(a), provided that the Territorial Lead shall not permit the appointed Third Party to undertake any Distributor or Co-Promotion activity that falls outside the description of the nature and scope of the Distributor or Co-Promotion activity that was included with such notice; or (ii) elect to undertake that Distributor or Co-Promotion activity, in which case the other Party shall be entitled to undertake that Distributor or Co-Promotion activity under the direction of the Territorial Lead and in accordance with the terms of this Agreement, with all [***] [Confidential Treatment Required] costs and expenses incurred by the other Party in undertaking that Distributor or Co-Promotion activity being treated as [***] [Confidential Treatment Required] and Loss except to the extent that such costs and expenses relate solely to an Independent Indication in which case such costs shall be borne by the applicable Continuing Party unless and until such Independent Indication is converted into a Converted Agreed Indication, whereupon the Non-Continuing Party shall reimburse the Continuing Party for such costs as provided in Article 8.9.  If the other Party fails to respond to any written notice of the Territorial Lead’s intention to appoint a Third Party to undertake any Distributor or Co-Promotion arrangement within the required [***] [Confidential Treatment Required] period, the other Party will be deemed to have elected not to undertake that Distributor or Co-Promotion activity.

6.3Establishment of Joint Commercialisation Team

No later than [***] [Confidential Treatment Required] before the anticipated date of the first Regulatory Approval, or earlier if agreed by the Collaboration Committee, the Parties shall establish a Joint Commercialisation Team (JCT) to facilitate the Commercialisation of Antibody Products on a global basis.

(a)JCT Members

The JCT shall consist of up to [***] [Confidential Treatment Required] representatives of each Party.  Each member of the JCT shall be an individual with operational experience in the Commercialisation and marketing of

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pharmaceutical products.  The Development Team Leader for each Party may also be one of the representatives for such Party on the JCT.  One representative from each Party on the JCT shall be designated as that Party’s Commercialisation Team Leader to act as the primary JCT contact for that Party.  Together, the Commercialisation Team Leaders will be jointly responsible for managing the JCT.  Each Party’s Commercialisation Team Leader shall be responsible for ensuring that his/her Party carries out the activities assigned to such Party under the Commercialisation Plan.  Either Party may replace any or all of its representatives on the JCT at any time upon written notice to the other Party.  Any member of the JCT may designate a substitute with suitable experience to attend and perform the functions of that member at any meeting of the JCT.  Each Party may invite (at its discretion and with the consent of the other Party, [***] [Confidential Treatment Required] additional employees or consultants to attend JCT meetings.  The JCT shall meet at least [***] [Confidential Treatment Required], or more frequently as agreed by the JCT.  The location of regularly scheduled JCT meetings shall alternate between the offices of the Parties unless otherwise agreed.  Meetings may be held by videoconference or telephonically.  Meetings shall be chaired by a single JCT representative of one of the Parties, with the Party responsible for designating the chairperson alternating each Contract Year.  The Collaboration Committee shall decide which Party will be responsible for designating the chairperson for the Contract Year in which the JCT is established.  The Party that does not provide the chairperson shall designate a member of the JCT to record, in sufficient detail, minutes of the discussions and decisions of the JCT.  Such minutes shall be circulated to the Parties promptly following the meeting for review, comment and, after approval from [***] [Confidential Treatment Required], distribution.  The Parties shall endeavour to manage the business and meetings of the JCT in the most cost-effective way possible.

(b)Responsibilities of the JCT

The JCT shall, during the Development of an Antibody Product, coordinate with the JDT and the JMT those activities deemed necessary for successful Commercialisation of Antibody Product for Agreed Indications in the Territory upon Regulatory Approval.  The JCT shall be responsible for preparing the Commercialisation Plan and the Commercialisation Budget (and recommending updates and amendments to the Commercialisation Plan and Commercialisation Budget as necessary) as further set forth in Articles 6.5 and 6.8, and for overseeing and implementing the activities contemplated under the Commercialisation Plan and under the other relevant portions of this Article 6. The JCT shall also coordinate with the JDT in developing and implementing standard operating procedures for adverse event reporting and compliance with regulatory requirements in the Territory, consistent with Article 5.  The JCT shall provide Quarterly reports to the Collaboration Committee of its activities.

(c)JCT Decision-Making

Decisions of the JCT shall be made by [***] [Confidential Treatment Required].  If the JCT is unable to resolve a dispute regarding any issue, the

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matter shall be resolved pursuant to the dispute resolution process set forth in Article 15.

(d)Annual Production Requirements

The JCT shall be responsible for preparing and submitting to the Collaboration Committee annual commercial production requirement reports with respect to each Antibody Product as part of each annual recommended update to the Commercialisation Plan.  Such report shall include a non-binding forecast of requirements for Commercial Supplies of Antibody Products for the Territory for the then current year and the following [***] [Confidential Treatment Required] and any other related information that the JCT determines to include.

6.4JCT and Territorial Lead Responsibilities

(a)Each Territorial Lead has the right and responsibility to Commercialise Antibody Products in the manner it deems appropriate, but subject always to its obligations under this Agreement including those set out in Articles 2.1 and 8 and this Article 6.  The Territorial Lead shall book all sales of Antibody Products in the countries for which it is the Territorial Lead.  If the JCT determines that any Commercialisation activities for Antibody Products should be conducted jointly or on a coordinated basis between the Parties, such activities shall be coordinated through the JCT.  The Parties now agree that, in addition to those matters set forth in Article 6.3(b), it is likely they will wish to coordinate the following matters, and that unless and until the Parties determine otherwise, and subject always to Articles 6.3(c) and 3.7, the JCT shall be responsible for:

(i)addressing strategic issues with relevance to Antibody Products for Agreed Indications throughout the Territory (e.g., branding, pricing, reimbursement issues, regulatory issues, product positioning) and consulting with the Continuing Party with respect to such issues for its Independent Indications, and making recommendations to the Collaboration Committee for approval with respect to product positioning, pricing and reimbursement issues for all Antibody Products;

(ii)deciding any activities that the Parties shall undertake jointly in order to Commercialise Antibody Products for Agreed Indications on a world-wide basis (e.g., pre-launch activities, market research, launch, post—launch marketing, Promotion, education, developing Promotional Materials, participation in congresses and publications) (collectively, the Joint Activities);

(iii)coordinating, reviewing and commenting on Post-Approval Studies for Antibody Products, provided that, subject to Article 4.7(e), each Party shall have the right to pursue Post-Approval Studies in the Territory in support of Compendia Listings in the countries for which it is the Territorial Lead;

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(iv)assisting the JDT with the preparation of recommendations to the Collaboration Committee with respect to the packaging, labelling and language to be included in the Product Labelling of all Antibody Products;

(v)coordinating commercial manufacturing production requirements of Antibody Products;

(vi)in consultation with the JPC, selecting, and recommending to the Collaboration Committee for approval, Product Trademarks and generic names for Antibody Products;

(vii)developing and updating a Commercialisation Plan for each Antibody Product pursuant to Article 6.5;

(viii)developing and approving a publication and scientific symposia strategy and a calendar of key scientific and clinical meetings at which the Parties will seek to present the results of Clinical Studies for the Antibody Product for Agreed Indications; and

(ix)resolving any complaint by a Party that the Development, Commercialisation or Manufacturing activities of the other Party are adversely affecting the Commercialisation of Antibody Products in the countries for which the Party making the complaint is the Territorial Lead.

(b)Subject to Articles 2.1, 3.7, 6.4(a), 6.7 and 8, the Territorial Lead shall be responsible for the Commercialisation of Antibody Products in the countries for which it is the Territorial Lead in a manner consistent with the Commercialisation Plan, including:

(i)tactical issues, for example, sales force allocation and disposition;

(ii)determining Promotional Materials suitable for each such country in accordance with Article 6.12;

(iii)preparing and implementing the Country Plan and monitoring the Commercialisation Budgets and forecasts for each such country; and

(iv)booking sales, taking orders, distributing, handling returns, and contracting and administering accounts.

6.5Commercialisation Plan

(a)The JCT shall develop, for approval by the Collaboration Committee, a Commercialisation Plan for Antibody Products, which Commercialisation Plan shall:

(i)outline the overall strategy for the Commercialisation of Antibody Products throughout the Territory, including the strategy for positioning of the Antibody Products;

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(ii)identify manufacturing needs and requirements of Commercial Supplies of Antibody Products and identify an appropriate forecasting mechanism to provide the Manufacturer with sufficient lead-time to Manufacture and to supply the Parties’ requirements of Commercial Supplies of Antibody Products;

(iii)identify Joint Activities; and

(iv)address any other issue where the Parties wish to adopt a coordinated approach throughout the Territory.

(b)A proposed initial Commercialisation Plan for Antibody Products shall be developed and forwarded by the JCT to the Collaboration Committee, and the Collaboration Committee shall approve an initial Commercialisation Plan for Antibody Products no later than [***] [Confidential Treatment Required] before a Party is expected to file the first Drug Approval Application for an Antibody Product.  Thereafter, the JCT shall review the Commercialisation Plan at least Quarterly, and shall make recommendations with respect to any updates or amendments thereto to the Collaboration Committee.  Either Party may at any time propose an amendment to the Commercialisation Plan.  Any such recommendations with respect to Agreed Indications shall include a good faith estimate of the budget for any such update or amendment, including any changes in the existing Commercialisation Budget.  Each Party shall cooperate with the JCT in preparing such estimated budget.  Subject to Article 6.7(b), all updates or amendments to the Commercialisation Plan must be approved by the Collaboration Committee or, if the Collaboration Committee cannot reach agreement on an update or amendment, the dispute resolution process set forth in Article 15.

6.6Country Plan

(a)From and after the date on which the first Commercialisation Plan is agreed, the Territorial Lead for each of the United States, Europe and Japan and any other countries in respect of which marketing approval for any Antibody Product is being sought, shall develop and submit to the JCT no less than [***] [Confidential Treatment Required] prior to the commencement of each Contract Year, a commercialisation plan and budget (Country Plan) for each Antibody Product in such country for the immediately following Contract Year.  Each Country Plan shall set out the work activities, including the number and position of Details for such Antibody Product to be carried out in such country in such Contract Year, in a manner consistent with the Commercialisation Plan and Commercialisation Budget, but taking into account the specific circumstances appropriate to the Commercialisation of Antibody Products in such country.  The Country Plan shall be developed to a standard and timing consistent with other products marketed by the Territorial Lead in that country.

(b)If the Commercialisation Plan is amended in accordance with Article 6.5(b) or the Commercialisation Budget is amended in accordance with Article 6.8(b), each Territorial Lead shall promptly amend the Country Plans relating to the countries for which it is Territorial Lead to conform with such amended

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Commercialisation Plan and/or Commercialisation Budget and resubmit any such amended Country Plans to the JCT.

(c)Each Territorial Lead may amend any such Country Plan at any time on no less than [***] [Confidential Treatment Required] advance written notice to the JCT, provided that such Country Plan, as amended, is consistent with the Commercialisation Plan and the Commercialisation Budget.

(d)Any Dispute regarding whether or not a Country Plan is consistent with the Commercialisation Plan or the Commercialisation Budget shall, at the request of either Party, be determined by the JCT and thereafter in accordance with Article 15.

6.7Implementation of Country Plan; Deviations

(a)The Territorial Lead shall Commercialise Antibody Products in each country for which it is the Territorial Lead, in accordance with the Country Plan for such country; provided, however, that neither Party shall undertake any activity that is inconsistent with the Commercialisation Plan (except as provided in Article 6.7(b)) or with its obligations under this Agreement including its obligation to use [***] [Confidential Treatment Required]to Commercialise Antibody Product for Agreed Indications in the countries for which it is the Territorial Lead.

(b)Where time does not permit amendment as provided in this Article 6, a Party may deviate from an agreed Commercialisation Plan or Country Plan with the prior written consent of the other Party’s Commercialisation Team Leader [***] [Confidential Treatment Required]. Where one Party consents to a deviation from an agreed Commercialisation Plan or Country Plan in accordance with this Article 6.7(b), the other Party shall promptly brief the JCT on the reasons for the deviation and on the course of action pursued.

6.8Commercialisation Budget

(a)In conjunction with the approval of the first Commercialisation Plan or, in any event, no later than [***] [Confidential Treatment Required] after the first Commercialisation Plan is agreed, and thereafter, no later than [***] [Confidential Treatment Required] prior to the start of each subsequent Contract Year, each Party shall prepare and submit to the other Party (via the JCT) a proposed budget for its activities for the ensuing Contract Year, as set forth in the Commercialisation Plan, in support of the Commercialisation of Antibody Products (other than for Independent Indications for which it is the Continuing Party) in a format to be agreed by the Parties, but which budget must include (i) line item estimates of expected Reimbursable Commercial Costs and forecasted Net Receipts (calculated as set out in Schedule 2) for the ensuing Contract Year for the countries for which that Party is Territorial Lead; and (ii) in respect of any Commercialisation activities which will not be completed in that Contract Year, line item estimates of the total Reimbursable Commercial Costs required to complete such Commercialisation activities in countries for which that Party is Territorial Lead on an activity-by-activity basis (regardless of whether such Reimbursable Commercial Costs will be

47

incurred in that Contract Year or subsequent Contract Years).  The Collaboration Committee shall review, revise and approve these budgets in relation to the first such budget within [***] [Confidential Treatment Required] after receipt thereof and thereafter no later than [***] [Confidential Treatment Required] prior to the commencement of each Contract Year (each such approved budget, a Commercialisation Budget).  Once approved, the Collaboration Committee, upon recommendation of the JCT, shall modify the Commercialisation Budget from time to time based upon changes in patent status, new product launches by competitors, adverse drug reactions, the results of clinical studies, changes in pricing and reimbursement regimes and other unanticipated events.  If the Commercialisation Plan is updated or amended by the Collaboration Committee pursuant to Article 6.5(b) with respect to the then-current Contract Year, the Parties shall prepare and submit proposals for any necessary amendments to the Commercialisation Budget for such Contract Year within [***] [Confidential Treatment Required] after such update or amendment to the Commercialisation Plan and the Collaboration Committee shall approve any necessary amendments to Commercialisation Budget for such Contract Year within [***] [Confidential Treatment Required] after such update or amendment of the Commercialisation Plan.

(b)The JCT shall review the Commercialisation Budget at least Quarterly, and shall make recommendations with respect to any updates or amendments thereto to the Collaboration Committee.  Either Party may at any time propose an amendment to the Commercialisation Budget.  No update or amendment to the Commercialisation Budget shall become effective unless it is approved by the Collaboration Committee or, if the Collaboration Committee cannot reach agreement on an update or amendment, the dispute resolution process set forth in Article 15.

(c)In any Contract Year, each Party shall promptly inform the other Party upon such Party determining that it is likely to overspend or underspend by more than [***] [Confidential Treatment Required] its respective total Reimbursable Commercial Costs for an activity set forth in the Commercialisation Budget for that Contract Year.  If in any such Contract Year a Party exceeds its budgeted costs and expenses by more than [***] [Confidential Treatment Required] for an activity, the Party that has so exceeded its budget shall provide to the JCT and to the Collaboration Committee (if the matter is escalated to the Collaboration Committee because it cannot be resolved by the JCT) a full explanation for exceeding the Commercialisation Budget for such activity.  If and to the extent that any such overspend was [***] [Confidential Treatment Required] of the applicable Party, then, provided the applicable Party has promptly notified the other Party of such overspend and used [***] [Confidential Treatment Required] to mitigate the size of such overspend, such overspend shall be included in Reimbursable Commercial Costs and used to calculate Operating Profits and Losses, which shall be shared by the Parties as provided in Article 2.3(b).  In addition, the JCT or Collaboration Committee (as applicable) may, by unanimous agreement and [***] [Confidential Treatment Required], allow some or all of any other overspend to be included in the Reimbursable Commercial Costs as it considers equitable under the circumstances.  Where

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any Commercialisation Budget sets out a line item estimate for the total Reimbursable Commercial Costs required to complete any activity which will not be completed in that Contract Year:  (i) the budgeted costs and expenses for that activity shall [***] [Confidential Treatment Required] and (ii) any [***] [Confidential Treatment Required] against such line item estimate shall be [***] [Confidential Treatment Required] to the Commercialisation Budgets for [***] [Confidential Treatment Required] in each case as necessary to reflect any reasonable acceleration or delay in such activity.  To the extent that the overspend is not included in Reimbursable Commercial Costs as provided in this Article 6.8, the Party who has exceeded its budget by more than [***] [Confidential Treatment Required] will be solely responsible for the overspend.

6.9Public Statements Regarding Antibody Product

Each Party shall be responsible for disseminating accurate information regarding Antibody Products to its sales representatives based on Product Labelling and Promotional Materials (and for causing its Affiliates, sublicensees and Distributors to so disseminate such accurate information).  In exercising their rights pursuant to this Article 6, UCB and ImClone shall seek to prevent claims or representations in respect of Antibody Products or the characteristics of Antibody Products (e.g., safety or efficacy) being made by or on behalf of it or its Affiliates, sublicensees or Distributors (by members of its or their sales force or otherwise) which do not represent an accurate or fairly balanced summary or explanation of the Product Labelling of the Antibody Products in the country in question.

6.10Medical and Other Inquiries

Each Party shall be responsible for responding to all medical questions or inquiries relating to Antibody Products sold in countries for which it is the Territorial Lead.  The Territorial Lead shall keep such records and make such reports as are reasonably necessary to document such communications in compliance with all Applicable Law.

6.11Compliance with Laws

(a)Each Party shall, and shall procure that its Affiliates shall, comply with all Applicable Law with respect to the Commercialisation of Antibody Products.  Each Party shall, and shall procure that its Affiliates shall, use [***] [Confidential Treatment Required] to, and shall use [***] [Confidential Treatment Required] to cause each of their respective employees, representatives, sublicensees, Distributors and agents to, do nothing which it knows or reasonably should know would jeopardise the goodwill or reputation of the other Party or any Antibody Product.

(b)Notwithstanding anything in this Agreement to the contrary, neither Party shall be required to undertake any activity relating to the Commercialisation of Antibody Products that it believes, in good faith, may violate Applicable Law.

(c)Each Party shall in all material respects conform its practices and procedures relating to educating the medical community in the countries for which it is the Territorial Lead with respect to Antibody Products to any applicable

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industry association regulations, policies and guidelines, as the same may be amended from time to time, and shall comply with Applicable Law with respect thereto.

6.12Promotional Materials and Activity

(a)Except with respect to Promotional Materials that are jointly developed by the Parties pursuant to Article 6.4(a)(ii), each Party shall be responsible for preparing all Promotional Materials used to support an Antibody Product for an Agreed Indication for use in its Territory in consultation with the JCT.  All such Promotional Materials shall be submitted to the JCT prior to use by either Party and prior to submission to any Regulatory Authority for regulatory approval (if such approval is required); provided that the content of Promotional Materials, once submitted, need not be submitted again prior to re-use unless the Product Labelling for such Antibody Product in such Agreed Indication applicable to such Promotional Materials has been changed since such prior submission date.  The Parties shall[***] [Confidential Treatment Required]Promotional Materials prepared for use to support an Antibody Product for an Agreed Indication and the Parties shall make such[***] [Confidential Treatment Required].  A Continuing Party with respect to an Antibody Product for an Independent Indication shall be responsible for preparing all Promotional Materials used to support such Antibody Product for such Independent Indication, in consultation with the JCT.  The development of all Promotional Materials shall be consistent with the Commercialisation Plan and Applicable Law, and with the approved Product Labelling.  Subject to Article 5, the Filing Party for an Antibody Product for an Indication in a country shall take the lead in obtaining any approvals from the Regulatory Authorities in such country required for the use of any Promotional Materials for such Indication in such country, and shall submit all applicable Promotional Materials for such Indication to the Regulatory Authorities in such country as required by Applicable Law.  For the avoidance of doubt, a Party shall not be required to re-submit any Promotional Materials to the JCT prior to use if the only changes made to such Promotional Materials since the original submission to the JCT are changes required by any Regulatory Authority.  The Continuing Party with respect to an Antibody Product for an Independent Indication shall [***] [Confidential Treatment Required] in any Promotional Materials prepared by it or on its behalf for use to support such Antibody Product for such Independent Indication.

(b)All Promotional Materials, packaging and Product Labelling used by either Party in connection with Antibody Products in any country of the Territory shall contain (i) the relevant Product Trademarks, (ii) a UCB Company Mark (or a Trademark of a UCB Affiliate if directed by UCB) designated by UCB in the UCB Territory or an ImClone Company Mark (or a Trademark of an ImClone Affiliate if directed by ImClone) designated by ImClone in the ImClone Territory, and (iii) if required by Applicable Law, the logo and corporate name of the Manufacturer ((i) to (iii) collectively, the Markings).  To the extent possible, and subject to any Applicable Law, the UCB Company Mark and the ImClone Company Mark (or any Trademark of their respective Affiliates, as applicable) shall have equivalent prominence on all Promotional

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Materials, packaging and Product Labelling used by either Party in connection with Antibody Products for Agreed Indications.  The manner in which the Markings are to be presented on Promotional Materials, packaging and Product Labelling for Antibody Products shall be subject to prior review and approval by (A) UCB with respect to a UCB Company Mark under paragraphs (ii) and, if applicable, (iii) above and ImClone with respect to an ImClone Company Mark under paragraphs (ii) and, if applicable, (iii) above, and (B) the JCT with respect to the Markings under paragraph (i) above.

(c)Prior to the use of any of them, each Territorial Lead shall provide to the other Party, through the JCT, a prototype of any Promotional Materials, packaging or Product Labelling for Antibody Products for the purposes of the other Party’s review of the manner in which its Corporate Mark and any Product Trademark is used on any of the same.  The reviewing Party shall notify the other Party within [***] [Confidential Treatment Required] after delivery of such prototype, whether the reviewing Party approves or disapproves of the manner of such use and, in the case of disapproval, the specific reasons for such disapproval and an acceptable alternative.  In the event the reviewing Party fails to so notify the other Party within such [***] [Confidential Treatment Required] period, the reviewing Party shall be deemed to have approved of the manner of such use.  In the event the reviewing Party disapproves of the manner of such use and the Parties are unable to reach agreement regarding the manner of such use, such dispute shall be resolved by the Parties in accordance with Article 15, provided [***] [Confidential Treatment Required].

(d)Each Party shall permit one or more authorised representatives of the other Party, on reasonable prior notice, at reasonable intervals, during normal business hours to inspect and examine from time to time Promotional Materials, packaging and Product Labelling for Antibody Products and the use of such Promotional Materials, packaging or Product Labelling.

(e)Each Party shall instruct its sales representatives to and shall use [***] [Confidential Treatment Required] to train and monitor its sales representatives for Antibody Products so that such sales representatives, (i) use only Promotional Materials (without any addition, deletion or other modification) approved for use under this Article 6.12 for the Promotion of such Antibody Products, (ii) limit claims of efficacy and safety for any such Antibody Products to those that are consistent with Applicable Law and with approved (by the appropriate Regulatory Authority) promotional claims in Product Labelling and such Promotional Materials, and not add, delete or otherwise modify claims of efficacy and safety in the Promotion of such Antibody Products in any respect from those claims of efficacy and safety that are contained in such approved Product Labelling and Promotional Materials, and (iii) Commercialise such Antibody Products in adherence with Applicable Law.

6.13Post-Regulatory Approval Activities

Subject to Articles 2.1, 3.7 and 6.11, each Party shall have the right to conduct Post-Approval Studies, including studies in support of Compendia Listings, for Antibody

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Products anywhere in the Territory.  The JCT shall coordinate all Post-Approval Studies for Antibody Products and shall have the opportunity to review and comment on any proposed Post-Approval Study for Antibody Products before its implementation.  In addition, before the implementation of the relevant Post-Approval Study, the JDT shall have the opportunity to review all designs and protocols for Post-Approval Studies in support of Compendia Listings for Antibody Products that have been submitted by either Party pursuant to Article 4.7(e) and shall refer such protocols to the Collaboration Committee (which shall also have the opportunity to review such protocols before the implementation of the relevant Post-Approval Study).

6.14Product Trademarks

Subject to Article 6.12, each Party shall Commercialise Antibody Products solely under the applicable Product Trademarks.

6.15ImClone Royalties

(a)In partial consideration of the licence rights granted by ImClone to UCB hereunder, UCB shall pay to ImClone royalties on the terms and conditions set forth in this Article 6.15 and Article 2.3, which payments shall not be used to calculate Operating Profits or Losses.

(b)Subject to Article 6.15(c), UCB shall pay to ImClone royalties on all Net Sales of Antibody Products (except sales of Antibody Product for an Independent Indication during the applicable Royalty Term by the Continuing Party or its Affiliates or their respective Distributors or sublicensees in those countries for which such Continuing Party is the Territorial Lead) sold by either Party, their Affiliates or their respective Distributors or sublicensees in the Territory at a royalty rate equal to [***] [Confidential Treatment Required] (the ImClone Royalties).

(c)ImClone’s right to receive ImClone Royalties under this Article 6.15 shall commence in each country in the Territory on the date of [***] [Confidential Treatment Required](the Royalty Term).

(d)Any ImClone Royalties payable by UCB under this Article 6.15, together with any prior ImClone Royalties deferred by operation of this sentence, that [***] [Confidential Treatment Required]  Nothing in this Article 6.15(d) is intended or shall be construed to relieve UCB of its obligations to pay ImClone Royalties under this Article 6.15.

(e)For clarity, any royalties payable under the ImClone In-Licences (including the [***] [Confidential Treatment Required]) shall [***] [Confidential Treatment Required]

7.MANUFACTURE AND SUPPLY

7.1Establishment of Joint Manufacturing Team

Within [***] [Confidential Treatment Required] after the Effective Date, the Parties shall form a Joint Manufacturing Team (JMT).  Each member of the JMT shall have operational experience in the Manufacture of Antibodies.  The JMT shall consist of up

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to [***] [Confidential Treatment Required] representatives of each Party.  One such representative from each Party shall be designated as that Party’s Manufacturing Team Leader to act as the primary JMT contact for that Party.  Together, the Manufacturing Team Leaders will be jointly responsible for managing the JMT.  Either Party may replace any or all of its representatives at any time upon written notice to the other Party.  Any member of the JMT may designate a substitute to attend and perform the functions of that member at any meeting of the JMT.  Each Party may invite (at its discretion with the consent of the other Party[***] [Confidential Treatment Required]) additional employees or consultants to attend the JMT meetings.  The JMT shall be empowered to create such sub-teams or subcommittees as it may deem appropriate or necessary.  Each such sub-team or subcommittee shall report to the JMT, which shall have authority to approve or reject recommendations or actions proposed, subject to the terms of this Agreement.  No sub-team or subcommittee shall have authority to make any decision binding upon the JMT or the Parties.  The JMT shall meet, at least once each Calendar Quarter, or more frequently, as agreed by the JMT.  To the extent that meetings are held in person, the location of JMT meetings shall alternate between the offices of the Parties unless otherwise agreed.  Meetings shall be chaired by a single JMT representative of one of the Parties, with the Party responsible for designating the chairperson alternating each Contract Year and with UCB responsible for designating the chairperson for the First Contract Year.  Meetings may be held by videoconference or telephonically.  The Party that does not provide the chairperson shall designate a member of the JMT to record, in sufficient detail, minutes of the discussions and decisions of the JMT.  Such minutes shall be circulated to the Parties promptly following the meeting for review, comment and, after approval from [***] [Confidential Treatment Required], distribution.  The Parties shall endeavour to manage the business and meetings of the JMT in the most cost-effective way possible.

7.2JMT Responsibilities

The JMT shall have the following responsibilities:

(a)for each Antibody Product, developing, for approval by the Collaboration Committee, a detailed plan and budget for the Manufacture and supply of that Antibody Product (the Manufacturing Plan), including targets for cost of goods, forecast mechanisms, scale-up strategies, Manufacturing technologies to be employed and strategies for supply chain continuity including, where applicable, back-up Manufacturing facilities;

(b)for each Antibody Product, selecting the Party that will coordinate the Manufacture and supply of that Antibody Product (the Manufacturing Coordinator);

(c)for each Antibody Product, selecting the Party(ies) or Third Party(ies) that will be responsible for Manufacturing and supplying such Antibody Product or any intermediate thereof (each Party or Third Party so selected being a Manufacturer, which term shall also include any Third Party supplier under the supply agreements listed in Schedule 4).  In choosing the Manufacturer(s), the JMT shall select the Party(ies) or Third Party(ies) that are likely to be best able to meet Clinical Supply and/or Commercial Supply requirements for Antibody

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Products and offer a competitive manufacturing solution based on the following criteria:

[***] [Confidential Treatment Required]

Unless otherwise agreed by the Parties, potential Manufacturers (including either of the Parties if they wish to be appointed Manufacturer) shall be required to prepare detailed submissions (either as part of a competitive tender or such other procedure as may be agreed by the JMT) addressing these requirements for review by the JMT.  Any member of the JMT may require any of the potential Manufacturers to answer additional due diligence questions.  Such submissions and due diligence shall be reviewed and discussed by the JMT before any decision as to the identity of any Manufacturer is taken by the JMT;

(d)[***] [Confidential Treatment Required], approving (i) the terms on which any Manufacturer (whether a Party or a Third Party) is appointed to provide Clinical Supplies and/or Commercial Supplies and (ii) any agreements with respect thereto (each a Manufacturing Agreement);

(e)approving any amendment or modification to, or waiver under (i) any Manufacturing Agreement or (ii) any of the supply agreements listed in Schedule 4 in existence on the Effective Date to the extent that such amendment, modification or waiver relates to Antibody Products;

(f)approving the use of any new Manufacturing Know-How that will be used in the Manufacture of Antibody Products;

(g)agreeing on the formulation of Antibody Products and the specifications for the Manufacture of Antibody Products including the processes for production, purification and testing (including quality control and assurance testing procedures) for such Antibody Products (collectively, the Antibody Product Specifications);

(h)consulting with the JCT and with the JDT, as applicable, to assist the JCT and JDT in identifying manufacturing needs and requirements of Clinical Supplies (including placebo and comparators) and Commercial Supplies of Antibody Products and, together with the JDT and JCT, developing and implementing an appropriate forecasting mechanism to provide any Manufacturer(s) with sufficient lead-time to Manufacture or have Manufactured the Parties’ requirements of Clinical Supplies (including placebo and comparators) and Commercial Supplies of Antibody Products;

(i)coordinating with the JDT and JCT to approve rationing plans for Antibody Product in the event of scarcity of supply in accordance with Article 7.10;

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(j)in consultation with the JCT and JDT, as applicable, periodically review and, as necessary, revise the forecasting and order mechanisms to ensure the continuity and adequacy of Clinical Supplies and Commercial Supplies of Antibody Products;

(k)determining whether or not the Parties, or if applicable the Manufacturing Coordinator, should take action to enforce their or its rights against a Third Party supplier of Antibody Products and if so, making all decisions relating to the conduct of such action;

(l)periodically, but, unless otherwise agreed by the Parties, no less frequently than every [***] [Confidential Treatment Required], reassessing using the process set forth in Article 7.2(c) above whether the existing Manufacturer(s) of Antibody Products continue to offer a competitive Manufacturing solution and, if not, selecting new or additional Manufacturers or amend the Manufacturing Agreement(s) with the existing Manufacturer(s) to include such competitive terms, as provided in Article 7.2(a) through (e) above; and

(m)agreeing whether any of theThird Party suppliers under the supply agreements listed in Schedule 4 shall be requested to Manufacture Antibody [***] [Confidential Treatment Required]

The JMT shall also be responsible for all other activities assigned to it by the Collaboration Committee and shall provide the Collaboration Committee with Quarterly reports of its activities.

7.3Joint Manufacturing Team Decision-Making

Decisions of the JMT shall be made by unanimous vote of the Manufacturing Team Leaders.  If the JMT is unable to resolve a dispute regarding any issue, the matter shall be resolved pursuant to the dispute resolution process set forth in Article 15, provided that if (i) any dispute relating to the selection of a Manufacturer or the terms of any Manufacturing Agreement has not been resolved following referral to the Parties’ respective Chief Executive Officers in accordance with the dispute resolution process, or (ii) there is a material issue with respect to the quality or sufficiency of supplies of Antibody Product pursuant to any Manufacturing Agreement and the Parties are unable to agree how to resolve such issue within [***] [Confidential Treatment Required] from the date one Party notifies the other that a material issue has arisen, notwithstanding any other provision in this Agreement to the contrary, each Party shall be immediately entitled to make its own arrangements for the relevant supply of Antibody Products for Phase III Clinical Studies or in respect of Commercialisation of Antibody Products in the countries for which it is the Territorial Lead in which event Article 7.12 shall apply.

7.4Role of the Manufacturing Coordinator

(a)The Manufacturing Coordinator shall:

(i)be responsible for the day to day implementation of the Manufacturing Plan and administration of Manufacturing-related activities;

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(ii)provide advice to the JDT and JCT on provisions in the Development Plan and Commercialisation Plan, respectively, that relate to the supply of Antibody Products to the Parties;

(iii)consult with the JCT and JDT, as applicable, and assist the JCT and JDT in identifying Manufacturing needs and requirements of Clinical Supplies (including placebo and comparators) and Commercial Supplies of Antibody Products;

(iv)provide assistance to the JMT in connection with the development and implementation of an appropriate forecasting mechanism to provide any Manufacturer(s) with sufficient lead-time to Manufacture or have Manufactured the Parties’ requirements of Clinical Supplies (including placebo and comparators) and Commercial Supplies of Antibody Products;

(v)based on the criteria set out in Article 7.2(c) and when and in the form requested by the JMT, provide the JMT with details of Third Parties capable of Manufacturing each Antibody Product and provide such additional assistance as the JMT may require in connection with verifying such capability and otherwise assessing proposals submitted by such Third Parties;

(vi)at the JMT’s request and in accordance with the JMT’s instructions, negotiate on behalf of the Parties the terms of a draft Manufacturing Agreement with such Third Party to be submitted and reviewed by the JMT, provided that the Party that is not the Manufacturing Coordinator shall have the right to participate and have an equal voice in any such negotiation, and provided, further, that if the JMT selects the Manufacturing Coordinator to act as Manufacturer for any Antibody Product the other Party shall negotiate the terms of such Manufacturing Agreement with the Manufacturing Coordinator;

(vii)use [***] [Confidential Treatment Required] to ensure that any draft Manufacturing Agreement submitted to the JMT for approval complies with Article 7.8 and draw to the JMT’s attention any aspect of any draft Manufacturing Agreement that does not comply with Article 7.8;

(viii)supervise the performance of any Third Party Manufacturer and report any breaches of the Manufacturing Agreement to the JMT;

(ix)provide any administrative assistance required by the JMT in connection with the performance of the Manufacturing Agreement, including compilation of forecasts and submission of orders;

(x)take such action as the JMT directs to enforce the Parties’ rights, for the benefit of both Parties, against Third Party Manufacturers.  Costs and recoveries of any such enforcement action by the Manufacturing Coordinator shall be treated in accordance with Article 7.9;

(xi)have the responsibilities set out in Article 7.5(b); and

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(xii)provide such other assistance as the JMT may reasonably request.

(b)The Manufacturing Coordinator shall ensure that the Manufacture of Antibody Products does not deviate from the agreed Manufacturing Plan in any material respect, unless it has obtained the JMT’s prior written consent to such material deviation [***] [Confidential Treatment Required]; provided, however that, where time does not permit, the Manufacturing Coordinator may deviate from the agreed Manufacturing Plan with the prior written consent of the other Party’s Manufacturing Team Leader [***] [Confidential Treatment Required]. Where the Party that is not the Manufacturing Coordinator’s Manufacturing Team Leader consents to a deviation from the agreed Manufacturing Plan in accordance with this Article 7.4(b), the Manufacturing Coordinator shall promptly brief the JMT on the reasons for the deviation and on the course of action pursued.

(c)The Manufacturing Coordinator shall have the responsibilities set out or referred to in this Article 7.4 but shall not be responsible for any other activities unless assigned to it by the JMT and shall provide the JMT with detailed reports of its activities monthly within [***] [Confidential Treatment Required] of the end of the relevant calendar month or at such intervals as the JMT may agree.

7.5Regulatory Approvals

(a)Without prejudice to Article 5, if a Party is the Manufacturer, such Party shall be responsible for obtaining all necessary Regulatory Approvals to perform its obligations under this Article 7 and the Manufacturing Agreement and shall (i) provide the other Party with all chemistry, manufacturing and controls data and such other data and information with respect to the manufacture, holding, shipment and testing of such Antibody Product (or a drug master file or equivalent outside the United States containing the same) as are required by cGMP and other Applicable Law or that are otherwise necessary for each Territorial Lead to obtain and maintain all INDs, Drug Approval Applications and Regulatory Approvals for the sale and use of such Antibody Product in each country in respect of which it is the Territorial Lead; and (ii) grant to the other Party a right of access and reference to all Regulatory Approvals or other government licences, approvals or certificates relating to the Manufacture of an Antibody Product and any drug master file relating to an Antibody Product.

(b)Without prejudice to Article 5, if a Third Party is the Manufacturer, the Manufacturing Coordinator shall be responsible for ensuring that the Manufacturer:

(i)obtains all necessary Regulatory Approvals to perform its obligations under the Manufacturing Agreement or any of the agreements listed in Schedule 4;

(ii)provides each Party with all chemistry, manufacturing and controls data and such other data and information with respect to the manufacture, holding, shipment and testing of such Antibody Product (or a drug master file or equivalent outside the United States containing the same) as are required by cGMP and other Applicable Law or are otherwise necessary

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for each Territorial Lead to obtain and maintain all INDs, Drug Approval Applications and Regulatory Approvals for the sale and use of such Antibody Product in each country in respect of which it is the Territorial Lead; and

(iii)grants to each Party a right of access and reference to all Regulatory Approvals or other government licences, approvals or certificates relating to the Manufacture of an Antibody Product and any drug master file relating to an Antibody Product.

7.6Transfer Price

The Transfer Price for Antibody Product shall be calculated as defined in Schedule 2.

7.7Manufacturing

(a)The Parties agree that Clinical Supplies of CDP-791 required for Development through [***] [Confidential Treatment Required].  If at any time UCB becomes aware that these[***] [Confidential Treatment Required] will not be sufficient to meet such Development supply needs, it shall promptly notify the JMT.  For the avoidance of doubt, the Parties expressly acknowledge that these [***] [Confidential Treatment Required].

(b)Unless otherwise agreed by the Parties, any Manufacturing Agreement (with a Party or a Third Party), shall include the terms set out in Article 7.8 and such other terms as the JMT considers necessary or appropriate in the circumstances.

(c)If the JMT selects a Third Party to be the Manufacturer of Antibody Product, that Third Party and both ImClone and UCB shall be parties to the Manufacturing Agreement unless that would be impracticable or UCB or ImClone, as the case may be, elects not to be a party.

(d)Each Party shall comply and operate in accordance with the terms of any Manufacturing Agreement and [***] [Confidential Treatment Required] to which it is a party if and to the extent that such agreements relate to the supply of Antibody Product up to and including [***] [Confidential Treatment Required]; provided, however, that nothing shall require either Party to take any action in violation of Applicable Law or refrain from taking any action if to do so would put it in violation of Applicable Law.

(e)Without prejudice to UCB’s obligations pursuant to Article 4.1(a), UCB shall as soon as practicable following the Effective Date and in any event within [***] [Confidential Treatment Required] following the Effective Date, transfer in aggregate [***] [Confidential Treatment Required] of master cell bank for CDP-791 to one or more escrow agent(s).  ImClone shall select the proposed escrow agent(s) and, subject to UCB’s prior approval of the escrow agent so selected [***] [Confidential Treatment Required] ImClone shall appoint the escrow agent(s).  Subject to Article 7.7(f), pending release of all the vials to UCB or ImClone as set out in this Article 7.7(e), UCB shall procure that there are in aggregate [***] [Confidential Treatment Required] of master cell bank for CDP-791 in escrow with the appointed escrow agent(s) at all times.  The costs

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incurred by the Parties in connection with the appointment and services of the first escrow agent and any replacement(s) to the first escrow agent agreed by the Parties shall be Other Out of Pocket Expenses.  If, at ImClone’s discretion, more than one escrow agent is appointed at any one time, the costs incurred in connection with the appointment and services of any such additional escrow agent(s) shall be borne by ImClone.  The escrow agent(s) shall hold such vials on terms requiring that such vials shall be released to ImClone (or as it may direct) at ImClone’s request provided that, subject to Article 7.7(f), ImClone may only request such release if:

(i)the Parties are entitled to make their own arrangements for Manufacture of Antibody Product in accordance with Article 7.3; or

(ii)this Agreement is terminated in accordance with Article 12 and ImClone is or will be the Remaining Party, such transfer to be effected promptly following notice of termination.

On termination of this Agreement in accordance with Article 12 where UCB is the Remaining Party, ImClone shall instruct all escrow agent(s) holding any vials of master cell bank for CDP-791 to return such vials to UCB.

(f)At any time during the Term while vials of master cell bank for CDP-791 are held in escrow, ImClone shall, at UCB’s request, instruct the escrow agent(s) to release up to an aggregate of [***] [Confidential Treatment Required] to UCB.  Following any such release, UCB shall transfer the same number of vials of master cell bank for CDP-791 back to the releasing escrow agent(s) as soon as reasonably practicable.

(g)At any time after release of the vials from escrow to ImClone in accordance with Article 7.7(e), UCB shall, at ImClone’s request, transfer to ImClone up to [***] [Confidential Treatment Required]of master cell bank for CDP-791.  Following any such transfer, ImClone shall transfer the same number of vials of master cell bank for CDP-791 back to UCB as soon as reasonably practicable.

7.8Manufacturing Terms

(a)The Manufacturing Agreement shall provide sufficient time for renewal or termination to enable the Parties to identify and qualify a suitable substitute Manufacturer that is able to meet the Parties’ Clinical Supply and Commercial Supply requirements, as applicable.  The Manufacturing Agreement shall provide for appropriate strategies to ensure the continuity of supply, including inventory management plans and, where [***] [Confidential Treatment Required], qualified back-up manufacturing facilities.  The Manufacturer shall (i) transfer all Information and Materials, including any proprietary know-how and any research and master cell banks, and provide such technical assistance, and (ii) provide any rights and licences, including any rights of reference to any Regulatory Approvals and licences to any Patent Rights controlled by the Manufacturer, in each case ((i) and (ii)) to any substitute and back-up Manufacturers designated by the JMT or, in the case of a breach of a Manufacturing Agreement by a Party Manufacturer, the other Party, as [***]

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[Confidential Treatment Required] for such substitute or back-up Manufacturer to Manufacture the applicable Antibody Products.

(b)Each Party shall have a licence and right to use and reference any Manufacturing-related Information, inventions or Materials characterised, conceived, developed, derived, discovered, generated, identified or otherwise made by any employee, consultant or agent of the Manufacturer in connection with any Manufacturing activities conducted under a Manufacturing Agreement or the existing supply agreements listed in Schedule 4 (Manufacturing Know How) and any Patent rights with respect thereto (Manufacturing Patents) to Develop, Commercialise, Manufacture, make, have made, use, sell, have sold, offer to sell or resell, import, export, distribute or otherwise transfer physical possession of or otherwise transfer title in or to Antibody Products.

(c)The Manufacturer shall be required to obtain and maintain all Regulatory Approvals relating to the Manufacture of Antibody Product and grant access and rights of reference to all such Regulatory Approvals and drug master files and other data as set forth in Article 7.5.

(d)The Manufacturer shall manufacture Antibody Products in facilities described in the applicable Regulatory Approvals in accordance with (i) the Antibody Product Specifications, (ii) GMP and all other Applicable Law, and (iii) the terms of the applicable Manufacturing Agreement ((i)-(iii) collectively, the Antibody Product Standards).

(e)The terms of the Manufacturing Agreement shall be consistent with and provide for the Manufacture of Antibody Products as required and anticipated by this Agreement.

(f)The Manufacturer shall not manufacture for, or sell, licence, or distribute Antibody Products to, any person or entity other than the Parties, their Affiliates or, if it has received the relevant Party’s consent, a Party’s permitted sublicensees or Distributors.

(g)The Manufacturing Agreement shall include a forecasting and order mechanism consistent with the procedures adopted by the JDT, JCT and JMT pursuant to Articles 4.6(b)(viii), 6.5(a)(ii) and 7.2(a) that is designed to ensure that the Manufacturer is able to meet the Parties’ clinical and commercial requirements on a timely basis, which shall provide adequate flexibility to meet unexpected demand, or the lack thereof, particularly around launch.

(h)Manufacturer shall guarantee, at the time of delivery, that Antibody Products supplied by it (i) have been manufactured, packaged, held and shipped in accordance with the Antibody Product Standards and all other Applicable Law; (ii) are not adulterated or misbranded under the FFDCA, or under any other Applicable Law; (iii) may be introduced into interstate commerce pursuant to the FFDCA; and (iv) that the processes, procedures and materials used in the manufacture of such Antibody Products do not and will not infringe the intellectual property or other proprietary rights of a Third Party.  Manufacturer shall also warrant and covenant that Manufacturer has not been debarred and is not subject to debarment and will not use in any capacity, in connection with the

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services to be performed under the Manufacturing Agreement, any person who has been debarred pursuant to section 306 of the FFDCA, 21 U.S.C. § 335a, or who is the subject of a conviction described in such section (or under any analogous provisions of Applicable Law outside the United States).

(i)Manufacturer shall defend, indemnify and hold the Parties, their Affiliates and their respective officers, directors, employees, agents and designees harmless from any and all losses, damages, liabilities, costs and expenses (including [***] [Confidential Treatment Required] attorneys fees and other costs of defence), in connection with any and all actions, suits, claims, demands or judgments that may be brought or instituted against any of them by any Third Party to the extent that any such losses, damages, liabilities, costs and expenses arise out of, or result from, any [***] [Confidential Treatment Required]

(j)The Parties shall have the right (upon reasonable notice and during reasonable business hours) to observe, audit and inspect the facility or the manufacturing process used in the Manufacture of each Antibody Product, and Manufacturer will allow a representative of the Parties (or, with respect to a Party Manufacturer, a representative of the other Party) reasonable access to all Manufacturing records for each such Antibody Product, so as to verify that Manufacturer is in compliance with the Antibody Product Standards and all other Applicable Law.  Manufacturer shall use [***] [Confidential Treatment Required] to correct any material non-compliance with the Antibody Product Standards or other Applicable Laws that is discovered and brought to its attention as a result of such inspections. If only one Party conducts such audit, the results shall be provided to the other Party.

(k)If a Party is the Manufacturer, the other Party shall have the right to audit Manufacturer’s records relating to the calculation of the COGM and the Transfer Price in accordance with Article 2.3(j).

7.9Costs

To the extent relating to Antibody Product, except relating to a Party in its capacity as Manufacturer (which shall be governed by Schedule 2 and the applicable Manufacturing Agreement), all [***] [Confidential Treatment Required] including: [***] [Confidential Treatment Required] shall be Development Costs if incurred for Development and Other Out of Pocket Costs if incurred for Commercialisation, and all amounts recovered from any Third Party supplier shall be deemed to be Gross Receipts, provided, however, that if the [***] [Confidential Treatment Required] and provided further that any such[***] [Confidential Treatment Required].

7.10Scarcity of Supply

If, at any time during the Term, there is an insufficient supply of Antibody Products to meet both Parties’ needs for Clinical Supplies and/or Commercial Supplies of that Antibody Product, the JMT shall, in coordination with the JDT and/or JCT (as appropriate), allocate the available Clinical Supplies and/or Commercial Supplies (as appropriate) of that Antibody Product to the Parties [***] [Confidential Treatment Required] and (ii) the goal of maximising the long term value of that Antibody Product for both Parties.

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7.11Shared Risk of Third Party Suppliers

Each Party acknowledges that, save with respect to any Third Party supplier with whom a Party has made its own arrangements for the supply of Antibody Products pursuant to Article 7.3, the risk of non performance by a Third Party supplier that Manufactures any Antibody Product is a risk equally shared by them and that neither Party is responsible or liable for any act or omission of any such Third Party supplier (other than an act or omission to the extent caused by [***] [Confidential Treatment Required].

7.12Independent Manufacture

If the Parties elect to make their own arrangements for the Manufacture of Antibody in accordance with Article 7.3:

(a)each Party shall provide [***] [Confidential Treatment Required] such assistance (including providing prompt access to all ImClone Know How (in the case of ImClone), UCB Know How (in the case of UCB) and Manufacturing Know How and rights of reference to any Regulatory Approvals) as may be reasonably required by the other Party to Manufacture or have Manufactured Antibody Product;

(b)the provisions of this Article 7 shall continue to apply in relation to Manufacturing activities relating to supplies of Antibody Product for Phase I Clinical Studies and Phase II Clinical Studies;

(c)subject to Article 7.12(b), the responsibilities of the JMT shall be restricted to those set out in Article 7.2(f) and (g) and unless the Parties otherwise agree there shall be no Manufacturing Coordinator;

(d)each Party shall use [***] [Confidential Treatment Required] to secure a competitive manufacturing solution based on the criteria set out in Article 7.2(c) and shall consider such criteria in good faith when deciding whether to Manufacture Antibody Product itself and when selecting any Third Party to Manufacture Antibody Product;

(e)each Party shall use [***] [Confidential Treatment Required] to ensure that Antibody Product is Manufactured in accordance with Article 7 as modified by this Article 7.12 and the terms of any agreement it enters into with a Third Party for the Manufacture of Antibody Product shall comply with Article 7.8 (to the extent applicable when only one Party is a party to any such agreement) and shall also use [***] [Confidential Treatment Required] to ensure that any such agreement allows the assignment of such agreement to the Remaining Party on termination of this Agreement;

(f)Article 7.5 shall continue to apply except that for the purposes of Article 7.5(b) each Party shall assume the responsibilities of the Manufacturing Coordinator with respect to any Third Party Manufacturer appointed by it;

(g)each Party shall be responsible for the Transfer Price of Antibody Product Manufactured by or on behalf of that Party pursuant to this Article 7.12 and

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such costs shall not be included in the calculation of Operating Profits and Losses; and

(h)subject to Article 7.12(b), Article 7.10 shall not apply.

7.13Manufacturing Cost Allocation

(a)If, as a result of any provision in any of the existing supply agreements listed in Schedule 4, UCB or any of its Affiliates is contractually obliged to use one of the Third Party suppliers pursuant to that supply agreement for the supply of Antibody Products for any Phase III Clinical Study or in respect of the Commercialisation of Antibody Products (the Relevant Supply), UCB agrees that, notwithstanding anything to the contrary in this Agreement, UCB shall be solely responsible for the Additional Manufacturing Amount and UCB shall reimburse ImClone with respect to the Additional Manufacturing Amount through adjustments to the Operating Statement.

(b)For the purposes of Article 7.13(a) and Schedule 2, Additional Manufacturing Amount shall mean the amount, if any, by which:

(i)[***] [Confidential Treatment Required]

(ii)[***] [Confidential Treatment Required]

8.INDEPENDENT INDICATIONS

8.1Designation of Independent Indications

Each Party shall have the right at any time, on written notice to the other Party, with respect to each Agreed Indication for an Antibody Product to terminate its rights and obligations to continue to Develop and Commercialise such Antibody Product for such Agreed Indication (which Indication shall become an Independent Indication, unless and until it is Converted pursuant to Article 8.9), whereupon, except as otherwise provided in this Article 8, such Party (which Party shall be referred to herein as the Non-Continuing Party, and the other Party, the Continuing Party, with respect to such Independent Indication for such Antibody Product):

(a)shall cease to have any right or, except as provided in Article 4.3(b), obligation to fund or participate in the Development of such Antibody Product for such Independent Indication in the Territory;

(b)shall not have the right to seek (including by filing a Drug Approval Application), obtain or maintain any Regulatory Approvals for such Antibody Product for such Independent Indication in the Territory; and

(c)shall have no right or obligation to share in any Operating Profits and Losses of the Continuing Party with respect to such Antibody Product for such Independent Indication in the countries for which the Continuing Party is the Territorial Lead except as provided in Article 8.2(b) and 8.9 and, if the Non-Continuing Party is the Manufacturer of such Antibody Product, pursuant to the applicable Manufacturing Agreement.

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If, at any time, both Parties have exercised their rights under this Article 8.1 with respect to an Agreed Indication, the Parties shall cease all Development activities with respect to that Agreed Indication as expeditiously and as cost effectively as possible with due regard for patient safety and the rights of any subjects that are participants in Clinical Studies or Post-Approval Studies and in compliance with Applicable Law.  All disputes regarding Independent Indications shall be resolved pursuant to Article 15.

8.2Continuing Party’s Rights and Obligations with respect to an Independent Indication

(a)Subject to Article 8.3, the Continuing Party with respect to an Antibody Product for an Independent Indication shall have the right to (i) conduct Development and Post-Approval Studies of such Antibody Product for such Independent Indication throughout the Territory, and the Non-Continuing Party shall assist the Continuing Party with respect thereto pursuant to Article 8.8, and (ii) prepare and file any Drug Approval Application, and obtain and maintain any Regulatory Approvals, for such Antibody Product for such Independent Indication in the countries for which it is the Territorial Lead and (iii) Commercialise such Antibody Product for such Independent Indication in the countries for which it is the Territorial Lead.  For clarity, the foregoing does not permit the Continuing Party with respect to an Antibody Product for an Independent Indication to Commercialise (other than to conduct Post-Approval Studies for) such Antibody Product for such Independent Indication in the countries for which the Non-Continuing Party is the Territorial Lead.

(b)The Continuing Party with respect to an Antibody Product for an Independent Indication shall pay to the Non-Continuing Party royalties on the Net Sales of such Antibody Product for such Independent Indication, sold by the Continuing Party, its Affiliates or their respective sublicensees or Distributors in the countries for which the Continuing Party is the Territorial Lead (the Relevant Net Sales) as follows:

[***] [Confidential Treatment Required]

(c)[***] [Confidential Treatment Required]

(d)Article 2.3 shall apply to all royalties due and owing under the provisions of this Article 8.2.

8.3Consultation with the JDT and Collaboration Committee

The Continuing Party, with respect to an Antibody Product for an Independent Indication, shall consult regularly with the JDT and consider in good faith the input of

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the JDT with respect to any decision or action related to the Development of such Antibody Product for such Independent Indication to the extent such decision or action could [***] [Confidential Treatment Required] affect the Development of an Antibody Product for an Agreed Indication or either Party’s ability to obtain and maintain Regulatory Approval for an Antibody Product for an Agreed Indication or could give rise to material safety concerns or other issues that might materially and adversely affect the Development or Commercialisation of an Antibody Product for an Agreed Indication.  In particular, the Continuing Party shall submit all designs and protocols for Clinical Studies for an Antibody Product for an Independent Indication to the JDT for review and the Continuing Party shall not, unless otherwise agreed by the Collaboration Committee, commence any such Clinical Study less than [***] [Confidential Treatment Required] after such submission.  Further, the Continuing Party with respect to an Antibody Product for an Independent Indication, shall provide to the Collaboration Committee, for its review and comment, but not approval:

(a)within [***] [Confidential Treatment Required]of any conversion of an Agreed Indication for an Antibody Product to an Independent Indication in accordance with Article 8.1 or adoption of a new Indication as an Independent Indication in accordance with Article 4.7(d) and thereafter at least [***] [Confidential Treatment Required] prior to the start of each subsequent Contract Year, a plan setting out in reasonable detail its proposed Development activities with respect to that Antibody Product for the remainder of the Contract Year in which the conversion or adoption occurs or the forthcoming Contract Year (as appropriate) such plan to be attached to, but not form part of, the Development Plan;

(b)upon the completion of a Clinical Study, a summary of the Clinical Study results and any resultant data analyses;

(c)the annual reports with respect to the Development of such Antibody Product for such Independent Indication required pursuant to Article 4.6(e);

(d)at least [***] [Confidential Treatment Required] in advance of the expected filing date of a Drug Approval Application for such Antibody Product for such Independent Indication, a copy of such Drug Approval Application; and

(e)promptly upon becoming aware of such information, any other information relating to such Independent Indication of which the Continuing Party is aware that is of material commercial significance and which would be reasonably required by the Non-Continuing Party in order to enable the Non-Continuing Party to make an informed decision as to whether to exercise its option to Convert such Independent Indication pursuant to Article 8.9.

In any case where any Antibody Product receives Regulatory Approval for an Independent Indication, the Parties shall adopt a mutually agreeable sales allocation methodology to distinguish sales of such Antibody Product for such Independent Indication.

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8.4Regulatory Matters

(a)Subject to Article 8.4(b), the Continuing Party with respect to an Antibody Product for an Independent Indication shall be the Filing Party with respect to such Antibody Product for such Independent Indication and shall be responsible for preparing and filing any Drug Approval Application, and obtaining and maintaining any Regulatory Approvals, for such Antibody Product for such Independent Indication in the countries for which it is the Territorial Lead.

(b)The Non-Continuing Party with respect to an Independent Indication for an Antibody Product shall use [***] [Confidential Treatment Required] to assign and transfer to the Continuing Party all interest in and to all INDs and Regulatory Approvals to such Antibody Product for such Independent Indication, and shall cooperate with the Continuing Party [***] [Confidential Treatment Required] to effect such assignments and transfers in an orderly fashion and shall provide to the Continuing Party any copies of relevant documents and rights of reference and access, including with respect to Agreed Indications, necessary to allow the Continuing Party to exercise its rights under this Article 8, provided that, if (i) having used such [***] [Confidential Treatment Required], the Non-Continuing Party is unable to effect such assignments or (ii) the Continuing Party is unable to assume, or it is impractical for the Continuing Party to assume, the responsibility of the Filing Party for that Antibody Product for an Independent Indication, the Non-Continuing Party shall continue to be the Filing Party in respect of that Antibody Product and the Continuing Party shall reimburse the Non-Continuing Party in respect of all [***] [Confidential Treatment Required] incurred by the Non-Continuing Party in acting as Filing Party.

8.5Information and Materials

With respect to an Independent Indication for an Antibody Product, the Non-Continuing Party shall promptly transfer to the Continuing Party relevant Information and Materials as provided in Article 4.1(a).

8.6Transition for an Independent Indication

With respect to an Antibody Product for an Independent Indication, the Non-Continuing Party shall [***] [Confidential Treatment Required] transfer to the Continuing Party all Development and Commercialisation and (to the extent applicable) Manufacturing activities in the Independent Indication and the Collaboration Committee shall promptly meet to devise a transfer plan providing for such transfer in a prompt, smooth, orderly and cost-effective manner and both Parties shall effect such transfer in accordance with such plan.  The Development Plan, Development Budget, Commercialisation Plan and Commercialisation Budget shall be amended to reflect any conversion of an Agreed Indication to an Independent Indication.

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8.7Supply of Antibody Product

In relation to any Antibody Product for an Independent Indication, the Continuing Party shall continue to be supplied with Clinical Supplies and Commercial Supplies of such Antibody Product and, if applicable, supplies of any comparator or placebo, [***] [Confidential Treatment Required] to Develop and Commercialise such Antibody Product for such Independent Indication under this Agreement as it would were such supplies for an Agreed Indication and if the Continuing Party is not the Manufacturing Coordinator, the Manufacturing Coordinator shall, subject to Article 7.10, continue to coordinate the supply of Clinical Supplies and Commercial Supplies of that Antibody Product to the Continuing Party as it would for an Antibody Product for an Agreed Indication pursuant to Article 7.

8.8Assistance from Non-Continuing Party

In addition to its obligations with respect to Independent Indications for which it is the Non-Continuing Party expressly set out elsewhere in this Agreement, and as necessary in order to comply with relevant Third Party obligations, including In-Licences and Manufacturing Agreements, the Continuing Party may request that the Non-Continuing Party takes such other actions in its own name in relation to the Development, Manufacture and Commercialisation of an Antibody Product for an Independent Indication and the Non-Continuing Party shall not [***] [Confidential Treatment Required] refuse to take any such action requested by the Continuing Party.  Save as expressly provided to the contrary elsewhere in this Agreement, the Non-Continuing Party shall be entitled to [***] [Confidential Treatment Required] in connection with providing assistance, taking actions or supplying Materials with respect to Antibody Products for Independent Indications (but only to the extent that (i) this Agreement obliges them to provide such assistance, take such actions or supply such Materials or (ii) the Continuing Party has requested the provision of such assistance, taking of such actions or supply of such Materials).

8.9Conversion of Independent Indication to Agreed Indication

(a)At any time during the Term until [***] [Confidential Treatment Required]after an Antibody Product for an Independent Indication has obtained Regulatory Approval for commercial sale in any of the [***] [Confidential Treatment Required], the Non-Continuing Party with respect to an Independent Indication for an Antibody Product shall have the right, on written notice to the Continuing Party (an Option Exercise Notice), to convert such Independent Indication for such Antibody Product into an Agreed Indication for such Antibody Product (such conversion from an Independent Indication to an Agreed Indication, a Conversion, with Convert being given a corresponding meaning).

(i)In connection with the potential exercise of any such Conversion, the Non-Continuing Party shall have the right, on written notice to the Continuing Party, to request additional information with respect to the applicable Independent Indication for the applicable Antibody Product (an Information Request), provided that except as provided in Article 8.9(a)(ii), the Non-Continuing Party shall only have the right to make such a request [***] [Confidential Treatment Required] with respect to

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each Independent Indication for an Antibody Product.  Within [***] [Confidential Treatment Required] of receipt of an Information Request with respect to a particular Independent Indication for an Antibody Product, the Continuing Party shall provide the Non-Continuing Party with (x) a statement of the Development Costs and Reimbursable Commercial Costs incurred by the Continuing Party and its Affiliates in, and that are specifically identifiable or [***] [Confidential Treatment Required] allocable to, the Development and Commercialisation of such Antibody Product for such Independent Indication from and after the date that such Indication first became an Independent Indication pursuant to Article 8.1 or Article 4.7(d) [***] [Confidential Treatment Required] and (y) a Data Package for such Antibody Product for such Independent Indication (to the extent such information is available or [***] [Confidential Treatment Required] by the Continuing Party), in each case to the end of the Calendar Quarter occurring immediately before the date of the Information Request.

(ii)The Non-Continuing Party shall have the right to make an Information Request or, if applicable, an additional Information Request, with respect to each Independent Indication for an Antibody Product, if the Continuing Party with respect to such Independent Indication fails, and upon written notice from the Non-Continuing Party continues to fail for a period of not less than [***] [Confidential Treatment Required], to use [***] [Confidential Treatment Required] to Develop or Commercialise, as applicable, such Antibody Product for such Independent Indication (with any Disputes with respect thereto resolved pursuant to the procedures set forth in Article 15, [***] [Confidential Treatment Required]) and thereafter the Non-Continuing Party shall have the right to Convert such Independent Indication for such Antibody Product into an Agreed Indication (such conversion, a Default Conversion) by delivering to the Continuing Party an Option Exercise Notice in accordance with Article 8.9(a) above (such Option Exercise Notice to specify that it is with respect to a Default Conversion). [***] [Confidential Treatment Required].

(iii)If at any time (regardless of whether any Information Request has been made by the Non-Continuing Party) the Non-Continuing Party delivers an Option Exercise Notice with respect to an Independent Indication for an Antibody Product pursuant to Article 8.9(a) the remaining provisions of this Article 8.9 shall apply.

(b)The Continuing Party shall within [***] [Confidential Treatment Required] of receipt of the Option Exercise Notice with respect to an Independent Indication for an Antibody Product, provide the Non-Continuing Party with an updated statement of all of the Development Costs and Reimbursable Commercial Costs incurred by the Continuing Party and its Affiliates in, and that are specifically identifiable or [***] [Confidential Treatment Required] allocable to, the Development and Commercialisation of such Antibody Product for such Independent Indication from and after the date that such Indication first became an Independent Indication pursuant to Article 4.7(d) or

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Article 8.1, as applicable, through the effective date of the Option Exercise Notice with respect thereto, [***] [Confidential Treatment Required], subject to audit in accordance with the Article 8.9(e) (the Reimbursable Costs).

(c)Subject to Article 8.9(e), following receipt of the updated statement described in Article 8.9(b) with respect to the Conversion of an Independent Indication for an Antibody Product, the Non-Continuing Party shall pay to the Continuing Party, in accordance with Article 8.9(d), an amount (the Reimbursement Amount) equal to:

[***] [Confidential Treatment Required]

(d)Subject to Article 8.9(e), within [***] [Confidential Treatment Required]of receipt of the updated statement described in Article 8.9(b) with respect to the Conversion of an Independent Indication for an Antibody Product (the Initial Payment Period), the Non-Continuing Party shall pay to the Continuing Party a minimum of [***] [Confidential Treatment Required]of the Reimbursement Amount.  If the Non-Continuing Party elects not to pay the full Reimbursement Amount within the Initial Payment Period, the remainder of the Reimbursement Amount shall be payable as follows:

[***] [Confidential Treatment Required]

Interest calculated in accordance with Article 2.3(g) shall accrue on any unpaid portion of the Reimbursement Amount from the [***] [Confidential Treatment Required] of the Initial Payment Period until payment of the Reimbursement Amount in full.  If the Non-Continuing Party elects not to pay such interest monthly it will compound in accordance with Article 2.3(g).

(e)The Non-Continuing Party shall have the right, on written notice to the Continuing Party (such notice to be provided within the [***] [Confidential Treatment Required] period referred to in Article 8.9(d)), to have the Reimbursable Costs audited in accordance with the procedures set forth in Article 2.3, and any adjusting payments shall be calculated and paid in accordance with that Article.  For clarity, the Non-Continuing Party may not serve notice to have the Reimbursable Costs audited after such [***] [Confidential Treatment Required] period.

(f)Upon payment by the Non-Continuing Party to the Continuing Party of at least [***] [Confidential Treatment Required] of the Reimbursement Amount in accordance with Article 8.9(d), such Independent Indication for such Antibody Product shall be deemed to be Converted to an Agreed Indication (a Converted Agreed Indication) for such Antibody Product for all purposes under this Agreement, including with respect to Development Costs and

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Operating Profits and Losses, from and after the effective date of the applicable Option Exercise Notice.

For clarity, the Non-Continuing Party shall not have any right or obligation (other than to pay the Reimbursement Amount) to share any Operating Profits and Losses attributable to a Converted Agreed Indication for an Antibody Product [***] [Confidential Treatment Required].

9.GRANT OF RIGHTS

9.1Patent and Know-How Licences

(a)Subject to Article 9.1(c), UCB (on behalf of itself and its Affiliates) grants to ImClone a licence and, subject in addition to Article 9.2, a sublicence (with respect to Third Party rights Controlled by UCB) under the UCB Patent Rights, UCB Know-How, Joint Patent Rights (to the extent Controlled by UCB), the Manufacturing Know-How (to the extent Controlled by UCB), the Manufacturing Patents (to the extent Controlled by UCB) and the Joint Know-How (to the extent Controlled by UCB) to: (i) Develop Antibody Products for Agreed Indications in the Field in the Territory; (ii) Commercialise, use, sell, have sold, offer to sell, resell, import, export, distribute or otherwise transfer physical possession of or otherwise transfer title in Antibody Products in the Field in the ImClone Territory, provided that ImClone and its permitted sublicensees shall have the right to conduct Post-Approval Studies throughout the Territory; (iii) Develop Antibody Products for Independent Indications for which ImClone is the Continuing Party in the Field in the Territory, provided that ImClone shall only have the right to file Drug Approval Applications for such Independent Indications in the ImClone Territory; (iv) subject to Article 16.5, [***] [Confidential Treatment Required]; and (v) Manufacture Antibody Products in the Territory as necessary or useful to: (A) exercise ImClone’s rights under Article 9.1(a)(i) through (iv), and (B) if ImClone is a Manufacturer, as necessary to satisfy ImClone’s obligations under this Agreement and any Manufacturing Agreement to which it is a party; in each case only in accordance with and subject to the terms of this Agreement.

(b)Subject to Article 9.1(d), ImClone (on behalf of itself and its Affiliates) grants to UCB a licence and, subject in addition to Article 9.2, a sublicence (with respect to Third Party rights Controlled by ImClone) under the ImClone Patent Rights, ImClone Know-How, Joint Patent Rights (to the extent Controlled by ImClone), the Manufacturing Know-How (to the extent Controlled by ImClone), the Manufacturing Patents (to the extent Controlled by ImClone) and the Joint Know-How (to the extent Controlled by ImClone) to: (i) Develop Antibody Products for Agreed Indications in the Field in the Territory; (ii) Commercialise, use, sell, have sold, offer to sell, resell, import, export, distribute or otherwise transfer physical possession of or otherwise transfer title in Antibody Products in the Field in the UCB Territory, provided that UCB and its permitted sublicensees shall have the right to conduct Post-Approval Studies throughout the Territory; (iii) Develop Antibody Products for Independent Indications for which UCB is the Continuing Party in the Field in the Territory, provided that UCB shall only have the right to file Drug Approval Applications for such Independent Indications in the UCB Territory;

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(iv) subject to Article 16.5, [***] [Confidential Treatment Required]; and (v) Manufacture Antibody Products in the Territory as necessary or useful to: (A) exercise UCB’s rights under Article 9.1(b)(i) through (iv), and (B) if UCB is a Manufacturer, as necessary to satisfy UCB’s obligations under this Agreement and any Manufacturing Agreement to which it is a party; in each case only in accordance with and subject to the terms of this Agreement.

(c)The licences and sublicences granted by UCB pursuant to Article 9.1(a) shall, to the extent possible:  (i) be [***] [Confidential Treatment Required] with respect to:  (A) Development activities relating to Antibody Products for Agreed Indications in the Field in the Territory; (B) Post-Approval Studies for Antibody Product in the Field in the Territory; and (C) Manufacturing activities relating to Antibody Products in the Field in the Territory; and (ii) be [***] [Confidential Treatment Required] to ImClone and its Affiliates with respect to:  (A) Development activities relating to Antibody Products for Independent Indications for which ImClone is the Continuing Party in the Field in the Territory and (B) Commercialisation activities (other than Post-Approval Studies) related to Antibody Products in the Field in the ImClone Territory.  In so far as UCB does not[***] [Confidential Treatment Required].

(d)The licences and sublicences granted by ImClone pursuant to Article 9.1(b) shall, to the extent possible: (i) be [***] [Confidential Treatment Required] with respect to:  (A) Development activities relating to Antibody Products for Agreed Indications in the Field in the Territory; (B) Post-Approval Studies for Antibody Product in the Field in the Territory; and (C) Manufacturing activities relating to Antibody Products in the Field in the Territory; and (ii) be [***] [Confidential Treatment Required] with respect to:  (A) Development activities relating to Antibody Products for Independent Indications for which UCB is the Continuing Party in the Field in the Territory and (B) Commercialisation activities (other than Post-Approval Studies) related to Antibody Products in the Field in the UCB Territory. In so far as ImClone does not [***] [Confidential Treatment Required]

(e)From and after the Effective Date during the Term neither Party shall, and each Party shall procure that its Affiliates and sublicensees shall, not use or exercise any rights granted to it pursuant to this Agreement save for the purposes of Development, Manufacturing and Commercialising Antibody Products in accordance with and subject to the terms of this Agreement.

(f)For purposes of this Article 9.1, co-exclusive shall mean that the Party granting the co-exclusive licence shall not have the right to grant further licences to Third Parties under its relevant intellectual property rights if and to the extent such further licences would be inconsistent with an exclusive grant of such rights to the other Party, except to the extent that it would be permitted to grant sublicences to such intellectual property rights under Article 9.5 were such intellectual property rights licensed to it by the other Party.

(g)Without limiting any other grant made pursuant to this Agreement, UCB (on behalf of itself and its Affiliates) grants to ImClone a [***] [Confidential Treatment Required].

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9.2Third Party Licences

Certain licence rights granted to a Party under this Article 9 may include a sublicence of Patent Rights, Information and/or Materials of Third Parties under In-Licences.  Notwithstanding anything to the contrary in this Agreement the sublicence rights granted pursuant to Article 9.1 shall not be interpreted to exceed the scope of rights granted under the In-Licences in relation to the rights covered by such In-Licences, in each case as disclosed to the sublicensee Party.  Each Party shall promptly provide to the other Party a copy of any notice of breach received by it in respect of any In-Licence, and shall use [***] [Confidential Treatment Required] to promptly cure any such breach.

9.3Obligation to Maintain In-Licences

Neither Party shall terminate or amend an In-Licence in any manner that affects [***] [Confidential Treatment Required].  Each Party shall promptly notify to the other Party any notice of termination received by it in respect of any In-Licence.

9.4Trademark Licences/Promotional Materials

(a)Each Party hereby grants to the other Party [***] [Confidential Treatment Required] with the right to grant sublicences, to use each Product Trademark for each Antibody Product in respect of which it is the Product Trademark Owner, in each case solely in furtherance of the other Party’s Development activities for such Antibody Products in the countries for which such first Party is the Product Trademark Owner pursuant to this Agreement.

(b)Each Party, on behalf of itself and its Affiliates, hereby grants to the other Party, a [***] [Confidential Treatment Required] with the right to grant sublicences, to use such granting Party’s Corporate Mark solely in connection with Promotional Materials, packaging and Product Labelling for Antibody Products, limited in scope to the uses specified in Article 6.12.

(c)Each Party grants to the other Party a [***] [Confidential Treatment Required], to reproduce, distribute copies of, prepare derivative works of, and publicly perform and display Promotional Materials or additional Antibody Product-specific materials solely in connection with Antibody Products in the Field in the ImClone Territory or UCB Territory (as appropriate) and in accordance with and subject to the terms of this Agreement.

9.5Sublicences

(a)Each Party shall have the right to grant sublicences to its Affiliates under the licences granted to it in Articles 9.1(a), 9.1(b), 9.1(g) and 9.4, as the case may be, [***] [Confidential Treatment Required], but subject to any approvals required therefor from any applicable Third Party licensor.

(b)ImClone and its Affiliates shall have the right to grant sublicences to Third Parties through multiple tiers under the licences granted to it in Articles 9.1(a) and 9.4, as the case may be:

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(i)with the consent of UCB, if and to the extent that the sublicence permits the sublicensee to use or exploit the relevant sublicensed rights [***] [Confidential Treatment Required]; and

(ii)with the consent of UCB [***] [Confidential Treatment Required], if and to the extent that the sublicence permits the sublicensee to use or exploit the relevant sublicensed rights [***] [Confidential Treatment Required],

but subject, in each case, to any approvals required therefor from any applicable Third Party licensor.

(c)UCB and its Affiliates shall have the right to grant sublicences to Third Parties through multiple tiers under the licences granted to it in Articles 9.1(b) and 9.4, as the case may be:

(i)with the consent of ImClone, if and to the extent that the sublicence permits the sublicensee to use or exploit the relevant sublicensed rights [***] [Confidential Treatment Required]

(ii)with the consent of ImClone [***] [Confidential Treatment Required], if and to the extent that the sublicence permits the sublicensee to use or exploit the relevant sublicensed rights [***] [Confidential Treatment Required]; and

(iii)without the consent of, but following reasonable consultation with, ImClone if and to the extent that the sublicence permits the sublicensee to use or exploit the relevant sublicensed rights [***] [Confidential Treatment Required],

but subject, in each case, to any approvals required therefor from any applicable Third Party licensor.

(d)Subject to Articles 9.5(a), (b) and (c), neither Party shall have the right to grant sublicences under the licences granted to it in Articles 9.1(a), 9.1(b) and/or 9.4, as the case may be, [***] [Confidential Treatment Required].

(e)Each Party hereby guarantees the performance of its Affiliates and permitted sublicensees that are sublicensed as permitted in this Article9.5 and the grant of any such sublicence shall not relieve the sublicensing Party of its obligations under this Agreement, except to the extent they are satisfactorily performed by such sublicensee.  Any such permitted sublicences shall be subordinate to, consistent with and subject to the terms and conditions of this Agreement and any applicable In-Licences.  A copy of any sublicence agreement executed by one Party shall be provided to the other Party within [***] [Confidential Treatment Required] after its execution; provided that the financial terms of any such sublicence agreement may be redacted to the extent not pertinent to an understanding of a Party’s obligations or benefits under this Agreement.  Any sublicence agreement with a Third Party undertaking Commercialisation activity with respect to an Antibody Product

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for an Agreed Indication shall be in writing and shall contain the following provisions:

(i)[***] [Confidential Treatment Required]

(ii)[***] [Confidential Treatment Required]

(iii)[***] [Confidential Treatment Required]

(f)Each Party shall use [***] [Confidential Treatment Required] to ensure that any sublicence agreement it enters into with a Third Party provides that on termination of the licences granted to the relevant Party pursuant to this Agreement (or those which are subject to the sublicence), the Remaining Party may elect to replace the Non-Remaining Party as licensor under such sublicence agreement.

(g)ImClone and its Affiliates shall have the right to grant sublicences to Third Parties through multiple tiers under the licences granted to it in Article 9.1(g) without the consent of UCB.

10.RIGHTS IN INTELLECTUAL PROPERTY

10.1Ownership

(a)Independent Ownership

Subject to the licence grants under Article 9 and except as otherwise provided in Article 4.10 and Article 9.1(c), as between the Parties, each Party shall own and retain all right, title and interest in and to any and all: (a) Information, Materials and inventions that are characterised, conceived, developed, derived, discovered, generated, identified or otherwise made, by or on behalf of such Party (or its Affiliates or its licensees or sublicensees (other than the other Party and its Affiliates)) as determined in accordance with Article 10.1(e) under or in connection with this Agreement, whether or not patented or patentable, and any and all Patent Rights, copyrights, trademark rights, trade secret rights and other intellectual property or other proprietary rights with respect thereto, except to the extent that any such Information, Materials or inventions, or any Patent Rights or such other intellectual property or other proprietary rights with respect thereto, are Joint Know-How or Joint Patents, and (b) other Information, Materials or inventions, and Patent Rights and such other intellectual property rights (including the Corporate Marks but excluding Joint Patent Rights and Joint Know-How) that are owned or otherwise Controlled by such Party, its Affiliates or its licensees or sublicensees (other than the other Party and its Affiliates).

(b)Product Trademark

As between the Parties, each Party shall own all right, title and interest in and to the Product Trademark [***] [Confidential Treatment Required] (each Party being the Product Trademark Owner [***] [Confidential Treatment Required]).

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(c)Manufacturing Patents and Know How

As between the Parties, ownership of Manufacturing Know-How and Manufacturing Patents generated by or on behalf of a Party as a result of its activities as a Manufacturer shall be governed by the terms of the applicable Manufacturing Agreement or existing supply agreement listed in Schedule 4.

(d)Joint Ownership

Each Party shall own an undivided one-half interest in and to the Joint Patent Rights and the Joint Know-How with full ownership rights in and to any field and each Party shall have the right, subject to the rights and licences granted under, and the other provisions of, this Agreement, to freely exploit, transfer, license or encumber its rights in any such jointly owned subject matter (together with all Patent Rights and other intellectual property and proprietary rights in that subject matter) without the consent of, or payment or accounting to, the other Party, and each Party waives any right it may have under any Applicable Law to require such payment, accounting or consent.  This Article shall survive termination of this Agreement howsoever caused.  During the Term, each Party shall promptly disclose to the other Party in writing, and shall cause its Affiliates and sublicensees to so disclose, the characterisation, conception, development, derivation, discovery, generation, identification or making of any Information, Materials or inventions (but, for clarification, excluding any Manufacturing Know-How) in the course of work conducted under or in connection with this Agreement.  Each Party shall, and does hereby, assign, and shall cause its Affiliates and sublicensees to so assign, to the other Party, without additional compensation, such right, title and interest in and to any Joint Patent Rights or Joint Know-How as well as any intellectual property or other proprietary rights with respect thereto, as is necessary to fully effect the joint ownership provided for in this Article 10.1(d).

(e)Inventorship Determination; Identification of Collaboration Inventions

The JPC shall, within a reasonable time after the Effective Date, establish and oversee a mutually agreeable procedure for identifying and determining inventorship of inventions made pursuant to the Development, Commercialisation and Manufacturing (but excluding Manufacturing Know-How) or other activities conducted under or in connection with this Agreement.  All such determinations and designations shall be documented to ensure that any applications for Patent Rights reflect appropriate inventorship and that inventions and Patent Rights are assigned to or held by the appropriate Party.  The determination of whether any Information, Material or invention is characterized, conceived, developed, derived, discovered, generated, identified or otherwise made by a Party or any of its Affiliates, sublicensees or Distributors shall be made in accordance with Applicable Law in the United States.

(f)No Obligation to Licence

Other than as expressly set out in this Agreement, neither Party shall have any right in and to intellectual property owned or Controlled by the other Party and neither Party shall have an obligation to grant the other Party any rights in or to any such intellectual property.

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(g)Reservation of Prosecution Right

Other than as expressly set out in this Article 10, neither Party shall have the right to prepare, file, apply for, register, prosecute, maintain, defend, litigate, settle and/or enforce Patent Rights or Trademarks Controlled by the other Party, such activity being the exclusive right (but not the obligation) of the Party Controlling the same.

10.2Covenants Related to Product Trademarks and Corporate Marks

(a)During the period commencing on the Effective Date and ending on the date (if any) on which the Product Trademark Owner assigns (or is obliged to assign) to the other Party pursuant to Article 12.8(c), the Product Trademark Owner’s right, title and interest in and to the Product Trademarks, such other Party acknowledges and agrees that (i) [***] [Confidential Treatment Required] and (ii) all use of such Product Trademarks in the countries for which the Product Trademark Owner is the Territorial Lead whether in combination with or apart from the Product Trademark Owner’s Corporate Marks, including any goodwill generated in connection therewith, inures to the benefit of the Product Trademark Owner, and the Product Trademark Owner may call for a confirmatory assignment thereof.  Each Party shall use [***] [Confidential Treatment Required] not to do any act which endangers, destroys or similarly affects, in any material respect, the value of the goodwill pertaining to the Product Trademarks.

(b)Each Party agrees that it shall not attack, dispute or contest the validity of or ownership of the other Party’s Corporate Mark, or any registration issued or issuing with respect thereto.  Each Party expressly acknowledges and agrees that no ownership rights are vested or created in the other Party’s Corporate Marks by the limited rights of use granted pursuant to Article 9.4(b), and that all use of such Corporate Marks in accordance therewith, including any goodwill generated in connection therewith, inures to the benefit of the owner of such Corporate Marks and the owner of such Corporate Marks may call for a confirmatory assignment thereof.  With respect to any Corporate Marks licensed to a Party under Article 9.4(b), such Party agrees to conform to the customary guidelines and quality standards of the granting Party with respect to manner of use (as provided in writing by the owner of the Corporate Marks).  Each Party shall use [***] [Confidential Treatment Required] not to do any act which endangers, destroys or otherwise adversely affects the value of the goodwill pertaining to the other Party’s Corporate Marks.  Neither Party shall use, or allow any of their Affiliates, sublicensees or Distributors to use, in connection with any Antibody Product any other Trademark that is similar to or substantially similar to or so nearly resembles any of the other Party’s Corporate Marks as to be likely to cause deception or confusion.

10.3Disclosure of Patentable Inventions and Patent Due Diligence

(a)Each Party shall promptly notify the other Party of any patentable invention made by it or its Affiliates or, to the extent it has rights thereto, sublicensees or Distributors pursuant to the Development, Commercialisation, Manufacturing or other activities performed by it or them under this Agreement (but excluding any patentable invention with respect to Manufacturing Know-How Controlled by a Third Party Manufacturer), and shall provide to the other

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Party any invention disclosure submitted in the normal course of its business which discloses any such invention.

(b)Each Party agrees to use [***] [Confidential Treatment Required] to bring to the attention of the Joint Patent Committee in a timely manner any Third Party patent or Third Party patent application it discovers, or has discovered, and which such Party reasonably believes relates to, the Development, Commercialisation or Manufacture of any Antibody Product.

10.4Patent and Trademark Filing, Prosecution and Maintenance

(a)ImClone Patent Rights and ImClone Company Marks

(i)ImClone Core Patent Rights

Decisions regarding the preparation, filing, prosecution and maintenance of ImClone Core Patent Rights shall be made by ImClone following reasonable consultation with the JPC.  Prior to implementing any decision regarding the preparation, filing, prosecution and maintenance of such ImClone Core Patent Rights, ImClone shall give due consideration to any representation made by the JPC with respect to such preparation, filing, prosecution and maintenance.  ImClone shall provide the JPC with an opportunity to review and comment upon the text of the applications relating to such ImClone Core Patent Rights before filing.  ImClone shall provide the JPC with a copy of each patent application within such ImClone Core Patent Rights as filed, together with notice of its filing date and serial number.  ImClone shall keep the JPC advised of the status of all communications, actual and prospective filings or submissions regarding such ImClone Core Patent Rights, and shall give the JPC an opportunity to review and comment on any such communications, filing and submissions proposed to be sent to any patent office.  Notwithstanding the foregoing, ImClone shall not cease the prosecution and/or maintenance of, or elect not to file a patent application in respect of any ImClone Core Patent Rights, unless otherwise approved by the JPC [***] [Confidential Treatment Required].  All out of pocket costs incurred by the Parties in connection with the preparation, filing, prosecution and maintenance of ImClone Core Patent Rights shall be [***] [Confidential Treatment Required]

(ii)Other ImClone Patent Rights and ImClone Company Marks

Decisions regarding the preparation, filing, prosecution and maintenance of ImClone Company Marks and ImClone Patent Rights, other than ImClone Core Patent Rights, shall be made by ImClone.

(b)UCB Patent Rights and UCB Company Marks

(i)UCB Core Patent Rights

Decisions regarding the preparation, filing, prosecution and maintenance of UCB Core Patent Rights shall be made by UCB following reasonable consultation with the JPC.  Prior to implementing any decision regarding the

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preparation, filing, prosecution and maintenance of such UCB Core Patent Rights, UCB shall give due consideration to any representations made by the JPC with respect to such preparation, filing, prosecution and maintenance.  UCB shall provide the JPC with an opportunity to review and comment upon the text of the applications relating to such UCB Core Patent Rights before filing.  UCB shall provide the JPC with a copy of each patent application within such UCB Core Patent Rights as filed, together with notice of its filing date and serial number.  UCB shall keep the JPC advised of the status of all communications, actual and prospective filings or submissions regarding such UCB Core Patent Rights, and shall give the JPC an opportunity to review and comment on any such communications, filing and submissions proposed to be sent to any patent office.  Notwithstanding the foregoing, UCB shall not cease the prosecution and/or maintenance of, or elect not to file a patent application in respect of any UCB Core Patent Rights, unless otherwise approved by the JPC [***] [Confidential Treatment Required].  All out of pocket costs incurred by the Parties in connection with the preparation, filing, prosecution and maintenance of UCB Core Patent Rights shall be [***] [Confidential Treatment Required].

(ii)Other UCB Patent Rights and UCB Company Marks.

Decisions regarding the preparation, filing, prosecution and maintenance of UCB Company Marks and UCB Patent Rights, other than UCB Core Patent Rights, shall be made by UCB.

(c)Joint Patent Rights

Decisions regarding the preparation, filing, prosecution and maintenance of the Joint Patent Rights shall be made by the JPC.  Upon the identification of Joint Know-How, the JPC shall: (i) promptly discuss such Joint Know-How; (ii) promptly discuss the desirability of filing patent application(s) covering such Joint Know-How, and the relevant countries for filing; (iii) make the final decision with respect to any such filings as soon as practicable; and (iv) designate the Party (the Controlling Party) to be responsible for the preparation, filing, prosecution and maintenance of such Joint Patent Rights, with the expectation being that each Party shall be the Controlling Party with respect to Joint Patent Rights in countries for which it is the Territorial Lead, provided that no Party shall be designated as a Controlling Party without its written consent.  All out of pocket costs incurred by the Parties in connection with the preparation, filing, prosecution and maintenance of Joint Patent Rights [***] [Confidential Treatment Required].  The Controlling Party shall be responsible, using in-house counsel or outside counsel reasonably acceptable to both Parties, to implement the decisions of the JPC regarding the preparation, filing, prosecution and maintenance of such Joint Patent Rights.  The Controlling Party shall (A) provide the JPC an opportunity to review and comment upon the text of the applications relating to; (B)  provide the JPC with a copy of each patent application filed, together with notice of the filing date and serial number of; (C) keep the JPC advised of the status of all communications, actual and prospective filings or submissions regarding; (D) provide the JPC an opportunity to review and comment on any communications, filings and submissions proposed to be sent to any patent office relating to; (E) notify the JPC of the grant of; (F) not, unless otherwise approved by the JPC [***] [Confidential Treatment Required], cease the prosecution or maintenance of, or

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modify the claims of, or elect not to file a patent application in respect of; any Joint Patent Rights.  If one Party [***] [Confidential Treatment Required].  If the other Party fails to notify the first Party within [***] [Confidential Treatment Required], and the first Party is the Controlling Party, the Controlling Party [***] [Confidential Treatment Required] such Joint Patent Rights during that [***] [Confidential Treatment Required]).

(d)Product Trademarks

Decisions regarding the preparation, filing, prosecution and maintenance of registrations for the Product Trademarks in a country shall be made by, and registrations for the Product Trademarks in a country shall be filed and prosecuted by, the Product Trademark Owner in such country, and any expenses related to such preparation (including clearance of marks), filing, prosecution or maintenance [***] [Confidential Treatment Required], provided the other Party shall have a reasonable opportunity to review and comment upon drafts of any new application to register a Product Trademark and all correspondence, amendments and submissions of any kind to any and all trademark offices concerning the Product Trademark registrations, prior to filing that application, correspondence, amendment or submission.  Notwithstanding the foregoing, if a Product Trademark Owner declines to prepare, file or prosecute any Trademark registration, or maintain any such Trademark, comprising Product Trademarks for which it is the Product Trademark Owner as required by this Article 10.4(d), it shall give the other Party reasonable notice to this effect and, the other Party may, upon written notice to the Product Trademark Owner, prepare, file, prosecute and maintain such Product Trademarks in the name of the Product Trademark Owner and any expenses related to such filing, prosecution or maintenance shall be [***] [Confidential Treatment Required].

(e)Patent Term Extensions

The JPC shall make determinations as to whether to seek patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future regarding the ImClone Core Patent Rights, UCB Core Patent Rights or Joint Patent Rights with respect to the Antibody Products in each country in the Territory so as to secure optimal protection for each such Antibody Product under Applicable Law, provided that no such extensions shall be sought with respect to the UCB Core Patent Rights without UCB’s prior consent or the ImClone Core Patent Rights without ImClone’s prior consent.  ImClone shall be responsible for implementing any patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future, for the ImClone Core Patents and UCB shall be responsible for implementing patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future, for the UCB Core Patents.  The Controlling Party shall be responsible wherever applicable, for implementing any patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future, for Joint Patent Rights.  Each Party shall [***] [Confidential Treatment Required] cooperate, as requested by the other Party, to implement such decisions of the Joint Patent Committee.  Any costs incurred in connection with seeking patent term extensions shall be [***] [Confidential Treatment Required].

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10.5Interferences, Reexaminations, Reissues, Revocations and Oppositions With Third Parties

(a)ImClone Core Patent Rights and Product Trademarks for which ImClone is the Product Trademark Owner

All decisions relating to Adversarial Prosecution Actions with respect to ImClone Core Patent Rights or Product Trademarks for which ImClone is the Product Trademark Owner, including whether to initiate or settle such Adversarial Prosecution Actions, shall be made by ImClone having consulted with, and with the advice of, the JPC.  ImClone shall be responsible for the conduct of any such Adversarial Prosecution Action.  UCB shall [***] [Confidential Treatment Required] cooperate, as requested by ImClone, with respect to such Adversarial Prosecution Action.  ImClone shall keep the JPC informed of the progress of any such Adversarial Prosecution Action.  ImClone shall keep the JPC advised of all communications, actual and prospective filings or submissions regarding such Adversarial Prosecution Action, and shall provide the JPC with an opportunity to review and comment on any such communications, filings and submissions, provided that ImClone shall have the first right to conduct (including to initiate, defend and control, including the right to settle or compromise and to grant licences under the ImClone Core Patent Rights or Product Trademarks for which ImClone is the Product Trademark owner in connection therewith) any such Adversarial Prosecution Action.   If ImClone fails to institute an Adversarial Prosecution Action with respect to ImClone Core Patent Rights or a Product Trademark in a country where ImClone is the Product Trademark Owner within [***] [Confidential Treatment Required] after a written request by UCB to do so, or otherwise conduct or defend any such Adversarial Prosecution Action, within [***] [Confidential Treatment Required] after a written request by UCB to do so, then UCB, on written notice to ImClone, shall have the right, during or after the Term, [***] [Confidential Treatment Required] to initiate, conduct or defend, as applicable, and control, such Adversarial Prosecution Action provided that UCB shall not settle or consent to a judgment in any such Adversarial Prosecution Action if such settlement or judgment would have a material adverse effect on ImClone unless approved by ImClone [***] [Confidential Treatment Required].  All out-of-pocket expenses incurred in relation to any Adversarial Prosecution Action under this Article 10.5(a) shall be [***] [Confidential Treatment Required].

(b)Other ImClone Patent Rights and ImClone Company Marks

All decisions relating to Adversarial Prosecution Actions with respect to ImClone Company Marks and ImClone Patent Rights, other than ImClone Core Patent Rights, including whether to initiate or settle such Adversarial Prosecution Actions, shall be made by ImClone.  All expenses incurred and recoveries obtained in relation to any such Adversarial Prosecution Action shall be [***] [Confidential Treatment Required].

(c)UCB Core Patent Rights and Product Trademarks for which UCB is the Product Trademark Owner

All decisions relating to Adversarial Prosecution Actions with respect to UCB Core Patent Rights or Product Trademarks for which UCB is the Product Trademark Owner, including whether to initiate or settle such Adversarial Prosecution Actions,

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shall be made by UCB having consulted with, and with the advice of, the JPC.  UCB shall be responsible for the conduct of any such Adversarial Prosecution Action.  ImClone shall [***] [Confidential Treatment Required] cooperate, as requested by UCB, with respect to such Adversarial Prosecution Action.  UCB shall keep the JPC informed of the progress of any such Adversarial Prosecution Action.  UCB shall keep the JPC advised of all communications, actual and prospective filings or submissions regarding such Adversarial Prosecution Action, and shall provide the JPC with an opportunity to review and comment on any such communications, filings and submissions, provided that UCB shall have the first right to conduct (including to initiate, defend and control, including the right to settle or compromise and to grant licences under the UCB Core Patent Rights or Product Trademarks for which UCB is the Product Trademark Owner in connection therewith) any such Adversarial Prosecution Action.  If UCB fails to institute an Adversarial Prosecution Action with respect to UCB Core Patent Rights or a Product Trademark in a country where UCB is the Product Trademark Owner within [***] [Confidential Treatment Required] after a written request by ImClone to do so, or otherwise conduct or defend any such Adversarial Prosecution Action, within [***] [Confidential Treatment Required] after a written request by ImClone to do so, then ImClone, on written notice to UCB, shall have the right, during or after the Term, at its sole discretion to initiate, conduct or defend, as applicable, and control, such Adversarial Prosecution Action provided that ImClone shall not settle or consent to a judgment in any such Adversarial Prosecution Action if such settlement or judgment would have a material adverse effect on UCB unless approved by UCB [***] [Confidential Treatment Required].  All out-of-pocket expenses incurred in relation to any Adversarial Prosecution Action under this Article 10.5(c) shall be [***] [Confidential Treatment Required].

(d)Other UCB Patent Rights and UCB Company Marks

All decisions relating to Adversarial Prosecution Actions with respect to UCB Company Marks and UCB Patent Rights, other than UCB Core Patent Rights, including whether to initiate or settle such Adversarial Prosecution Actions, shall be made by UCB.  All expenses incurred and recoveries obtained in relation to any such Adversarial Prosecution Action shall be borne or retained, as applicable, by UCB.

(e)Joint Patent Rights, Third Party Patent Rights and Third Party Trademarks

Decisions relating to Adversarial Prosecution Actions with respect to Joint Patent Rights and decisions relating to Adversarial Prosecution Actions against Third Party Patent Rights or Third Party Trademarks relevant to an Antibody Product, including in each case decisions whether to initiate or settle such Adversarial Prosecution Actions, shall be made by the JPC.  Upon the identification of any such potential Adversarial Prosecution Action, the JPC shall: (i) promptly discuss such Adversarial Prosecution Action, including the strategy for conducting such Adversarial Prosecution Action; and (ii) designate a Party (the Managing Party) to be responsible for controlling such Adversarial Prosecution Action, provided that no Party shall be designated as a Managing Party [***] [Confidential Treatment Required].  The Managing Party shall be responsible, using outside counsel reasonably acceptable to both Parties, to implement the decisions of the Joint Patent Committee regarding such Adversarial Prosecution Action.  Save as provided in this Article 10.5(e), all expenses incurred in relation to any such Adversarial Prosecution Action shall be [***]

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[Confidential Treatment Required].  The non-Managing Party shall [***] [Confidential Treatment Required]cooperate, as requested by the JPC or the Managing Party, in such Adversarial Prosecution Action.  The Managing Party shall keep the JPC informed of the progress of any such Adversarial Prosecution Action.  The Managing Party shall keep the JPC advised of all communications, actual and prospective filings or submissions regarding such Adversarial Prosecution Action, and shall provide the JPC an opportunity to review and comment on any such communications, filings and submissions.  The Managing Party shall not settle or consent to a judgment in any such Adversarial Prosecution Action with respect to the Joint Patent Rights, Third Party Patent Rights or Third Party Trademarks, unless approved by the JPC [***] [Confidential Treatment Required].  If a Party does not wish to share the costs of prosecuting any such Adversarial Prosecution Actions against Third Party Patent Rights or Third Party Trademarks relevant to an Antibody Product, the other Party shall have the right to prosecute such action, at its sole expense, through counsel of its choosing, without the consent of such first Party or the JPC, provided that that such other Party shall be [***] [Confidential Treatment Required].  If a Party elects to initiate or continue prosecuting an Adversarial Prosecution Actions against Third Party Patent Rights or Third Party Trademarks relevant to an Antibody Product at its own expense as provided in the preceding sentence, the other Party shall, and shall cause its Affiliates to, [***] [Confidential Treatment Required]cooperate with such first Party in this regard.  For clarity, neither Party shall have the right not to fund, or to cease defending, an Adversarial Prosecution Action brought by a Third Party with respect to Joint Patent Rights, except with respect to a counterclaim brought by a Third Party in connection with an Adversarial Prosecution Action against a Third Party Patent as to which such Party previously exercised its right not to fund.

10.6Initial Filings

The Parties agree to use [***] [Confidential Treatment Required] to ensure that any Patent Rights within the ImClone Core Patent Rights, UCB Core Patent Rights and Joint Patent Rights will be in a form sufficient to establish the date of original filing as a priority date for the purposes of filing throughout the Territory.

10.7Enforcement and Defence of Patent Rights and Trademarks

(a)Notification of Infringement

If either Party learns of any Third Party making, using, offering for sale, selling or importing an Antibody Product or a Competing Product, in each case in or outside of the Field, or using a Trademark that could reasonably be deemed to infringe a Product Trademark, the Joint Patent Rights or one of the other Party’s Patent Rights or Trademarks, such Party shall promptly notify the other Party and shall provide such other Party with available evidence of such activity.

(b)Enforcement

(i)ImClone Core Patent Rights and Product Trademarks for which ImClone is the Product Trademark Owner

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As between the Parties, ImClone shall with respect to ImClone Core Patent Rights and Product Trademarks for which ImClone is the Product Trademark Owner during the Term have the first right and thereafter with respect to ImClone Core Patent Rights, the sole right, using outside counsel selected by ImClone, to initiate or defend (as appropriate) and control Enforcement Actions with respect to ImClone Core Patent Rights and Product Trademarks for which ImClone is the Product Trademark Owner.  UCB shall [***] [Confidential Treatment Required] cooperate, as requested by ImClone, with respect to such Enforcement Actions.  ImClone shall keep the JPC informed of the progress of any such Enforcement Action.  ImClone shall keep the JPC advised of all communications, actual and prospective filings and submissions regarding any such Enforcement Action and shall provide the JPC with an opportunity to review and comment on any such communications, filings and submissions.  If ImClone fails during the Term to institute or defend any such Enforcement Action with respect to ImClone Core Patent Rights or a Product Trademark for which ImClone is the Product Trademark Owner, within [***] [Confidential Treatment Required] after a written request by UCB to do so, then UCB, on written notice to ImClone, shall have the right at its sole discretion to initiate or defend (as appropriate) and control such Enforcement Action in the name of either or both Parties provided that UCB shall not settle or consent to a judgment in any such Enforcement Action if such settlement or judgment would have a material adverse effect on ImClone unless approved by ImClone [***] [Confidential Treatment Required].  If, after the Term, ImClone fails to initiate or defend any such Enforcement Action with respect to ImClone Core Patent Rights, UCB shall have no right to initiate or defend and control such Enforcement Action but any [***] [Confidential Treatment Required]  All out of pocket expenses incurred in relation to any Enforcement Action under this Article 10.7(b)(i) shall be [***] [Confidential Treatment Required].

(ii)Other ImClone Patent Rights and ImClone Company Marks

All decisions relating to Enforcement Actions with respect to ImClone Company Marks and ImClone Patent Rights, other than ImClone Core Patent Rights, including whether to initiate, defend or settle such Enforcement Actions, shall be made by ImClone.  ImClone shall have the exclusive right, using counsel selected by ImClone, to initiate or defend (as appropriate) and control such Enforcement Actions.  UCB shall [***] [Confidential Treatment Required] cooperate, as requested by ImClone and at ImClone’s expense, with respect to such Enforcement Actions that relate to Antibody Products.  ImClone shall keep the JPC informed of the progress of any such Enforcement Actions that relate to Antibody Products.  All expenses incurred and recoveries obtained in relation to any such Enforcement Action shall be [***] [Confidential Treatment Required].

(iii)UCB Core Patent Rights and Product Trademarks for which UCB is the Product Trademark Owner

As between the Parties, UCB shall with respect to UCB Core Patent Rights and Product Trademarks for which UCB is the Product Trademark Owner during the Term have the first right and thereafter with respect to UCB Core

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Patent Rights, the sole right, using outside counsel selected by UCB, to initiate or defend (as appropriate) and control Enforcement Actions with respect to UCB Core Patent Rights and Product Trademarks for which UCB is the Product Trademark Owner.  ImClone shall [***] [Confidential Treatment Required] cooperate, as requested by UCB, with respect to such Enforcement Actions.  UCB shall keep the JPC informed of the progress of any such Enforcement Action.  UCB shall keep the JPC advised of all communications, actual and prospective filings and submissions regarding any such Enforcement Action and shall provide the JPC with an opportunity to review and comment on any such communications, filings and submissions.  If UCB fails, during the Term, to institute or defend any such Enforcement Action with respect to UCB Core Patent Rights or a Product Trademark for which UCB is the Product Trademark Owner within [***] [Confidential Treatment Required] after a written request by ImClone to do so, then ImClone, on written notice to UCB, shall have the right at its sole discretion to initiate or defend (as appropriate) and control such Enforcement Action in the name of either or both Parties provided that ImClone shall not settle or consent to a judgment in any such Enforcement Action if such settlement or judgment would have a material adverse effect on UCB unless approved by UCB [***] [Confidential Treatment Required].  If, after the Term, UCB fails to initiate or defend any such Enforcement Action with respect to UCB Core Patent Rights, UCB shall have no right to initiate or defend and control such Enforcement Action but any [***] [Confidential Treatment Required].  All out of pocket expenses incurred in relation to any Enforcement Action under this Article 10.7(b)(iii) shall be [***] [Confidential Treatment Required].

(iv)Other UCB Patent Rights and UCB Company Marks

All decisions relating to Enforcement Actions with respect to UCB Company Marks and UCB Patent Rights, other than UCB Core Patent Rights, including whether to initiate, defend or settle such Enforcement Actions, shall be made by UCB.  UCB shall have the exclusive right, using counsel selected by UCB, to initiate or defend (as appropriate) and control such Enforcement Actions.  ImClone shall [***] [Confidential Treatment Required] cooperate, as requested by UCB and at UCB’s expense, with respect to such Enforcement Actions that relate to Antibody Products.  UCB shall keep the JPC informed of the progress of any such Enforcement Actions that relate to Antibody Products.  All expenses incurred and recoveries obtained in relation to any such Enforcement Action shall be [***] [Confidential Treatment Required].

(v)Joint Patent Rights

All decisions relating to Enforcement Actions with respect to Joint Patent Rights shall be made by the JPC.  Upon the identification by a Party of an actual, alleged or threatened infringement or attack on the validity or enforceability of a Joint Patent Right, or upon a Party’s request to the JPC to consider prosecuting or defending an Enforcement Action with respect to Joint Patent Rights, the JPC shall: (i) promptly discuss such infringement, attack or Enforcement Action; (ii) promptly discuss the strategy for enforcing or defending such Joint Patent Rights; and (iii) designate a Party (the Responsible Party) to be responsible for implementing the decisions of the

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JPC with respect to such infringement, attack or Enforcement Action.  The Responsible Party shall, using outside counsel reasonably acceptable to both Parties, implement the decisions of the JPC regarding such Enforcement Action.  Save as provided in this Article 10.7(b)(v), all expenses incurred in relation to any such Enforcement Action shall be [***] [Confidential Treatment Required].  The non-Responsible Party shall [***] [Confidential Treatment Required] cooperate, as requested by the JPC or the Responsible Party, in such Enforcement Action, including joining any such Enforcement Action.  The Responsible Party shall keep the JPC informed of the progress of any such Enforcement Action.  The Responsible Party shall keep the JPC advised of all communications, actual and prospective filings or submissions regarding any such Enforcement Action, and provide the JPC with an opportunity to review and comment on any such communications, filing and submissions proposed to be made by the Responsible Party.  The Responsible Party shall not settle or consent to a judgment in any such Enforcement Action with respect to Joint Patent Rights, unless approved by the JPC [***] [Confidential Treatment Required].  Notwithstanding the foregoing, if a Party does not wish to [***] [Confidential Treatment Required] of prosecuting any such Enforcement Action, the other Party shall have the right to prosecute such Enforcement Action, through counsel of its choosing, without the consent of such first Party or the JPC, provided that the other Party shall [***] [Confidential Treatment Required].  If a Party elects to initiate or continue prosecuting an Enforcement Action as provided in the preceding sentence, the other Party shall, and shall cause its Affiliates to, (x) [***] [Confidential Treatment Required] cooperate with such first Party in this regard, and (y) promptly release or assign to the other Party, without consideration, all right, title and interest in and to such Joint Patent Rights.  For clarity, neither Party shall have the right to not fund, or to cease defending, an Enforcement Action brought by a Third Party, except with respect to a counterclaim brought by a Third Party in connection with an Enforcement Action as to which such Party previously exercised its right not to fund.

10.8Third Party Intellectual Property

(a)Jointly Identified Third Party Intellectual Property

If either Party believes that there exist Third Party intellectual property rights that are [***] [Confidential Treatment Required] to Develop, Commercialise or Manufacture an Antibody Product in the Field then it shall notify the JPC, indicating in such notice whether or not a Party or any of its Affiliates have Control or have a right to acquire Control of such Third Party intellectual property rights.  Each Party shall provide the JPC with such details as it has and which it (without breaching any obligation it may have to a Third Party) is able to provide with respect to such Third Party intellectual property rights and of any right it or any of its Affiliates may have in or to the same.  If the JPC determines that such Third Party intellectual property rights are necessary or desirable to Develop or Commercialise an Antibody Product in the Field, then the JPC shall inform the Collaboration Committee.  If the Collaboration Committee approves the seeking of a licence, the Parties shall use[***] [Confidential Treatment Required] to obtain such a licence under such Third Party intellectual property rights on such terms (economic or otherwise) as the Collaboration Committee determines,

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provided that the Parties agree that they shall use [***] [Confidential Treatment Required] in the first instance to obtain such a licence to be held by both Parties in the Territory and if such licence is not obtainable on [***] [Confidential Treatment Required] terms, the Collaboration Committee shall designate one Party to use [***] [Confidential Treatment Required] to obtain such a licence throughout the Territory with the express right to grant a sublicence to the other Party as such sublicensing Party has with respect to its own intellectual property under Article 9.1.  No member of the Collaboration Committee shall [***] [Confidential Treatment Required] withhold its approval of a licence under Third Party intellectual property rights that are [***] [Confidential Treatment Required] to Develop, Commercialise or Manufacture an Antibody Product for an Agreed Indication in the Field.  If a Party (the first Party) (through the Collaboration Committee) does not agree that it is [***] [Confidential Treatment Required] to obtain such a licence to avoid infringing a Third Party’s Patent Rights, then the other Party shall be free to seek such licence with respect to its own activities, with any costs with respect to such licence (to the extent disclosed to the JPC prior to obtaining the licence) to be [***] [Confidential Treatment Required].  If the first Party is subsequently sued by such Third Party for infringement of such Third Party Patent; (i) any costs incurred in the defence or settlement of such action, including any ongoing royalties, damages or other payment obligations up to and including the amount that would have been payable to the Third Party had the first Party obtained the relevant licence shall be [***] [Confidential Treatment Required], and (ii) any costs incurred in the defence or settlement of such action, including any ongoing royalties, damages or other payment obligations in excess of that amount shall [***] [Confidential Treatment Required]. Notwithstanding the foregoing, the Continuing Party shall have the right, [***] [Confidential Treatment Required] to obtain a licence to any Third Party intellectual property that relates solely to an Independent Indication for which it is the Continuing Party without the consent of the other Party, the JPC or the Collaboration Committee and without securing any express rights to sublicence to the other Party, unless and until such Independent Indication is Converted into a Converted Agreed Indication, provided that at the time the Continuing Party identifies such Third Party intellectual property it shall notify the Non-Continuing Party in order to enable the Non-Continuing Party, at the Non-Continuing Party’s option, to negotiate a licence or option with respect to such Third Party intellectual property that would enable the Non-Continuing Party to use such Third Party intellectual property in the event that such Independent Indication is subsequently Converted into a Converted Agreed Indication.  Each Party shall [***] [Confidential Treatment Required] in relation to its own licence or option to such Third Party intellectual property, provided that, if the Continuing Party at the request of the Non-Continuing Party secures an express right to sublicense to the Non-Continuing Party in its licence to such Third Party intellectual property, the Non-Continuing Party shall [***] [Confidential Treatment Required] by the Continuing Party in connection with obtaining such right to sublicense provided that such [***] [Confidential Treatment Required] have been approved in advance by the Non-Continuing Party.  For clarity, the Continuing Party shall not be obliged to enter into any such licence or option or obtain any such right to sublicense.

In addition, if a Party or any of its Affiliates has the right to Control any such Third Party intellectual property rights specifically directed in substantial part to an Antibody Product that are [***] [Confidential Treatment Required] to Develop an Antibody Product for an Agreed Indication in the Field, at the written request of the other Party, such Party shall exercise such right, with any costs with respect to such

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exercise (to the extent disclosed to the other Party in writing prior to such request or otherwise agreed by the Parties) to be [***] [Confidential Treatment Required] and such Third Party intellectual property right shall be included in the rights licensed pursuant to this Agreement and the licence agreement pursuant to which such Control was acquired shall be deemed to be an In-Licence and Part 1 or Part 2 of Schedule 1 shall be deemed amended accordingly.

(b)Other Third Party Technology

In the event that UCB or ImClone (the Acquiring Party) proposes to apply to an Antibody Product technology that the Acquiring Party obtains from a Third Party, whether before or after the Effective Date, other than pursuant to Article 10.8(a), the Acquiring Party shall disclose the same to the Collaboration Committee, including any royalty or other payment obligations to a Third Party determined in accordance with GAAP that would apply as a result of the Development, Commercialisation or Manufacture of such Antibody Products for an Agreed Indication under this Agreement.  The Collaboration Committee shall determine, within [***] [Confidential Treatment Required], whether or not the Collaboration Committee agrees that such technology should be applied to such Antibody Product, and if the Collaboration Committee so determines that it should be, the agreement under which the Acquiring Party acquires such technology shall be deemed to be an In-Licence and Part 1 or Part 2 of Schedule 1 shall be deemed amended accordingly, and any applicable corresponding royalty payments or obligations shall be treated as [***] [Confidential Treatment Required].  If the Collaboration Committee fails to agree that such technology should be applied to such Antibody Product, (i) the subject matter of such agreement shall not be within the definition of UCB Know-How, ImClone Know-How, UCB Patent Rights or ImClone Patent Rights under this Agreement, (ii) the other Party shall have no licence or other rights with respect to such technology, and (iii) to the extent a Party still wishes to apply such technology to an Antibody Product, it may do so [***] [Confidential Treatment Required].

(c)Third Party Licences

Notwithstanding the provisions of this Article 10, the rights and obligations of the Parties under this Article 10 shall be subject to the rights and obligations of the licensors under any In-Licences.

(d)Third Party Patents

If a Third Party sues a Party alleging that such Party’s or such Party’s Affiliates’, Distributors’ or sublicensees’ Development, Commercialisation or Manufacturing activities (other than as a Manufacturer, which shall be governed by the applicable Manufacturing Agreement) under this Agreement infringe or will infringe said Third Party’s Patent Rights or misappropriate said Third Party’s trade secret or said Third Party’s Trademark or other intellectual property, then the sued Party shall give the other Party and the JPC prompt written notice thereof, and upon the sued Party’s request and in connection with such Party’s defence of any such Third Party suit, the other Party shall provide [***] [Confidential Treatment Required] assistance to the sued Party for such defence and shall join such suit where required to do so under the Applicable Law.  The sued Party shall keep the JPC and the other Party, if such other Party has not joined in such suit, reasonably informed, in person or by telephone,

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prior to (if possible) and during the pendency of any such suit.  The sued Party shall not admit the invalidity, unenforceability or non-infringement of any Patent Rights licensed under this Agreement or any infringement of a Third Party Patent in connection with activities conducted under this Agreement nor settle any such suit, [***] [Confidential Treatment Required].  The [***] [Confidential Treatment Required] out of pocket litigation costs and expenses incurred by each Party, including settlement costs, royalties paid in settlement of any such suit, and the payment of any damages to the Third Party shall be [***] [Confidential Treatment Required].  Any amounts recovered from the Third Party by way of costs shall be [***] [Confidential Treatment Required].

10.9Patent and Trademark Marking

To the extent practical and permitted by Applicable Law, each Territorial Lead shall mark Antibody Products sold in its Territory with all applicable patent numbers of Patent Rights of the Parties and with notice of Trademark registrations in those countries in which such markings have notice value as against infringers of Patent Rights or Trademarks.

10.10Allocation of Costs

(a)[***] [Confidential Treatment Required] relating to Joint Patent Rights

(i)Subject to Article 10.4(c), Article 10.5(e) and Article 10.7(b)(v), all [***] [Confidential Treatment Required] relating to Joint Patent Rights shall during the Term be [***] [Confidential Treatment Required].

(ii)Following termination of this Agreement for any reason, each Party shall provide to the other within [***] [Confidential Treatment Required] of the end of each Calendar Quarter a statement setting out the [***] [Confidential Treatment Required] in that Calendar Quarter in connection with Joint Patent Rights together with such evidence of such costs as the other Party may reasonably require.  If and to the extent that one Party has incurred more costs than the other Party, the other Party shall within [***] [Confidential Treatment Required].

(b)[***] [Confidential Treatment Required] relating to ImClone Core Patent Rights

All [***] [Confidential Treatment Required] relating to ImClone Core Patent Rights shall be included in the [***] [Confidential Treatment Required].

(c)[***] [Confidential Treatment Required] relating to UCB Core Patent Rights

All [***] [Confidential Treatment Required] relating to UCB Core Patent Rights shall be included [***] [Confidential Treatment Required].

(d)[***] [Confidential Treatment Required] relating to Product Trademarks

All [***] [Confidential Treatment Required] relating to Product Trademarks shall be [***] [Confidential Treatment Required].

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(e)[***] [Confidential Treatment Required] relating to other ImClone Patent Rights and ImClone Company Marks

[***] [Confidential Treatment Required] relating to ImClone Patent Rights (other than ImClone Core Patent Rights) and ImClone Company Marks shall [***] [Confidential Treatment Required].

(f)[***] [Confidential Treatment Required] relating to other UCB Patent Rights and UCB Company Marks

[***] [Confidential Treatment Required] relating to UCB Patent Rights (other than UCB Core Patent Rights) and UCB Company Marks shall [***] [Confidential Treatment Required].

(g)Recoveries

If and to the extent that either Party recovers any amount from a Third Party and the costs incurred in connection with such recovery constitute [***] [Confidential Treatment Required].  After termination of this Agreement any recoveries relating to actions relating to Joint Patent Rights that have been jointly funded by the Parties shall be [***] [Confidential Treatment Required].

11.CONFIDENTIALITY AND NON-USE

11.1Confidentiality

Except as expressly set out in this Agreement, the Parties agree that, during the Term and for [***] [Confidential Treatment Required] following the date of expiration or termination of this Agreement, the receiving Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as permitted under the terms of this Agreement any Confidential Information of the other Party except to the extent that it can be established by the receiving Party that such Confidential Information:

(a)was already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the other Party;

(b)was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

(c)became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement;

(d)was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such Information to others; or

(e)was independently developed by the receiving Party without use of the Confidential Information of the disclosing Party as demonstrated by competent written records.

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A Party’s Confidential Information shall not be deemed to be within any of the foregoing exceptions merely because it is embraced by general disclosures within such exceptions, nor shall a Party’s Confidential Information be deemed to be within any of the foregoing exceptions merely because individual items are in such exceptions.

11.2Authorised Disclosure

To the extent it is necessary or appropriate to fulfil its obligations or exercise its rights under this Agreement, a Party may disclose such Confidential Information of the other Party as it is otherwise obliged under Article 11.1 not to disclose:

(a)to its Affiliates, and to its and their (whether actual or potential) sublicensees, Distributors, consultants, outside contractors, Third Party Manufacturers and clinical investigators, on a need-to-know basis and on the condition that such entities or persons, and their employees and agents, agree in writing to keep the Confidential Information confidential for the same time periods and to the same extent as such Party is required to keep such Confidential Information confidential;

(b)to Regulatory Authorities to the extent that such disclosure is [***] [Confidential Treatment Required] useful to obtain authorisations to conduct Clinical Studies or Post-Approval Studies or to file, obtain and maintain Regulatory Approvals and to Manufacture and Commercialise Antibody Product in the Field;

(c)to the extent that such disclosure is [***] [Confidential Treatment Required] useful in connection with preparing, filing, prosecuting, maintaining, enforcing and/or defending UCB Core Patent Rights or ImClone Core Patent Rights or Joint Patent Rights in accordance with the provisions of Article 10; or

(d)in prosecuting or defending litigation or in establishing rights or enforcing obligations under this Agreement or in complying with Applicable Law, court or administrative orders, the rules of any relevant stock exchange or similar governing body or the U.S. Securities and Exchange Commission; provided, however, it shall:

(i)give reasonable advance notice to the other Party of such disclosure requirement, to the extent practicable;

(ii)provide a copy of the proposed disclosure to the other Party;

(iii)only disclose Confidential Information of the other Party to the extent necessary; and

(iv)at the request of the other Party, use [***] [Confidential Treatment Required] to secure confidential treatment of such Confidential Information required to be disclosed, including seeking a protective order, to the extent practicable.

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11.3Public Announcements

Following the Effective Date, the Parties may issue one or more press releases regarding this Agreement, the timing and content of which shall be mutually agreed to by the Parties.  Except to the extent required by Applicable Law or the rules of a relevant stock exchange or similar governing body or as otherwise permitted in accordance with this Article 11, neither Party shall make any further public announcements concerning this Agreement or the subject matter of this Agreement without the prior written consent of the other, [***] [Confidential Treatment Required].  The Parties agree to consult with each other reasonably and in good faith with respect to the text and timing of any press releases prior to its issuance.

11.4Third Party Obligations

Neither Party is obliged to disclose to the other Party any Information that it receives from a Third Party if to do so would put the disclosing Party in breach of an obligation owed to such Third Party.

11.5Termination of Prior Confidentiality Agreements

This Agreement supersedes the Confidentiality Agreement between the Parties dated March 17, 2004.  All Confidential Information (as defined in such Confidentiality Agreement as amended and extended) disclosed by a Party to the other Party under such Confidentiality Agreement shall be deemed to be the Confidential Information of that disclosing Party under this Agreement and shall be subject to the terms of this Article 11.

11.6Publications

(a)The Collaboration Committee (or its appropriate designees) shall determine the strategy for, and coordinate, the publication and presentation of results of studies of Antibody Products or other data generated under this Agreement.  Where the Collaboration Committee appoints a designee to carry out this function, the designee shall submit such strategy to the Collaboration Committee for approval.

(b)Each Party recognises that the publication of papers regarding results of and other information regarding activities under this Agreement, including oral presentations and abstracts, may be beneficial to both Parties, provided such publications are subject to reasonable controls to protect Confidential Information.  In particular, it is the intent of the Parties to maintain the confidentiality of any Confidential Information included in any patent application until such patent application has been published.  Accordingly, each Party will have the right to review and approve any paper proposed for publication by the other Party, including any oral presentation or abstract, which incorporates data generated under this Agreement or which includes Confidential Information of the other Party.  Before any such paper is submitted for publication or an oral presentation is made, the publishing or presenting Party shall deliver a complete copy of the paper or materials for oral presentation to the other Party at least [***] [Confidential Treatment Required] prior to submitting the paper to a publisher or making the

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presentation.  The other Party shall review any such paper and give its comments to the publishing Party within [***] [Confidential Treatment Required] of the delivery of such paper to the other Party.  With respect to oral presentation materials and abstracts, the other Party shall make [***] [Confidential Treatment Required] to expedite review of such materials and abstracts, and shall return such items [***] [Confidential Treatment Required] to the publishing or presenting Party with appropriate comments, if any, but in no event later than [***] [Confidential Treatment Required] from the date of delivery to the other Party.  Failure to respond within such [***] [Confidential Treatment Required] shall be deemed approval to publish or present.  During the Term, if approval is not given or deemed given, either Party may refer the matter to the Collaboration Committee for resolution together with the reasons for withholding approval.  Notwithstanding the foregoing, the publishing or presenting Party shall, if and to the extent consistent with Applicable Law and industry standards, comply with the other Party’s request to delete references to such other Party’s Confidential Information in any such paper and will withhold publication of any such paper or any presentation of same for an additional [***] [Confidential Treatment Required] in order to permit the Parties to obtain patent protection if either Party deems it necessary.  Any publication shall include recognition of the contributions of the other Party according to standard practice for assigning scientific credit, either through authorship or acknowledgement, as may be appropriate.  Each Party shall use [***] [Confidential Treatment Required] to cause investigators and institutions participating in Clinical Studies and Post-Approval Studies with which it contracts to agree to terms substantially similar to those set forth in this Article 11.6, which [***] [Confidential Treatment Required] shall satisfy such Party’s obligations under this Article 11.6 with respect to such investigators and institutions.

12.TERM AND TERMINATION

12.1Term of this Agreement

Unless earlier terminated pursuant to this Article 12, this Agreement shall become effective on the Effective Date and shall remain in full force and effect on a [***] [Confidential Treatment Required], provided that if Antibody Products are only being Developed or Commercialised for Independent Indications and if there is only one Continuing Party, then if, within [***] [Confidential Treatment Required] after its election to withdraw with respect to the last Agreed Indication for an Antibody Product pursuant to Article 8.1, the Non-Continuing Party has not provided the Continuing Party with an Option Exercise Notice with respect to at least one Independent Indication for an Antibody Product pursuant to Article 8.9, the Non-Continuing Party shall be deemed to have terminated this Agreement pursuant to Article 12.2 and such Non-Continuing Party shall be the Terminating Party and the Continuing Party shall be the Remaining Party as provided therein.

12.2Voluntary Termination of this Agreement

Subject to Article 16.1, either Party (the Terminating Party) shall have the right at any time to terminate this Agreement in its entirety by giving written notice of termination of this Agreement to the other Party.  If within [***] [Confidential

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Treatment Required] of receipt of such termination notice, the other Party provides the Terminating Party with written notice that it wishes to continue Development and Commercialisation (as appropriate) of one or more Antibody Products (whether in Agreed Indications or Independent Indications), the other Party shall be deemed to be the Remaining Party and the Terminating Party shall be deemed the Non-Remaining Party for purposes of this Article 12 and termination shall take effect upon expiry of the Transition Period.  If the other Party does not serve such written notice within [***] [Confidential Treatment Required] of receipt of such termination notice, the Parties shall cease all activities under this Agreement as expeditiously and as cost effectively as possible with due regard for patient safety and the rights of any subjects that are participants in Clinical Studies or Post-Approval Studies and in compliance with Applicable Law and this Agreement shall terminate on the date on which all such activities cease and in such circumstances this Agreement shall be terminated only under this Article 12.2, and no other Article.

12.3Termination with respect to Competing Products

(a)Subject to Article 16.2 and Article 16.4, but without prejudice to any other remedy a Party may have, a Party (which Party shall be deemed to be the Remaining Party) may terminate this Agreement by giving written notice of termination to the other Party (which party shall be deemed to be the Non-Remaining Party or, for the purposes of this Article 12.3, the Excluded Party) if the Excluded Party or any of its Affiliates [***] [Confidential Treatment Required] (as such terms are defined in this Agreement, except for purposes of this Article 12.3, the term “Antibody Product” as it appears in any definition of a defined term included in such definitions of “Clinical Study”, “Development” or “Commercialises” shall be deemed to be replaced with the term “Antibody Product or Competing Product, as applicable”), alone or in collaboration with a Third Party, a Competing Product (a Competing Activity).  Such notice of termination shall take effect in accordance with Article 12.3(c).

(b)If the Merging Party:

(i)fails to notify the other Party of its intention to take one of the actions described in paragraphs (x) through (z) of Article 16.4 within the [***] [Confidential Treatment Required] provided for in Article 16.4;

(ii)timely notifies the other Party of its intention to terminate this Agreement but fails to serve a notice of termination pursuant to Article 12.2 within [***] [Confidential Treatment Required] of notifying the other Party of such intention;

(iii)timely notifies the other Party of its intention to divest such Competing Product but fails to use all [***] [Confidential Treatment Required] to effect such divestment as quickly as possible in accordance with Article 16.4(b); or

(iv)timely notifies the other Party of its intention to cease all Competing Activities but does not cease all Competing Activities as expeditiously as possible in accordance with Article 16.4(a),

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the other Party (which Party shall be deemed to be the Remaining Party) may, on written notice to the Merging Party, in addition to any other remedies available to it at law or equity, terminate this Agreement by giving written notice of termination to the other Party.  Such notice of termination shall take effect in accordance with Article 12.3(c).

(c)Any notice of termination served pursuant to Article 12.3(a) or (b) shall specify whether the Remaining Party wishes to continue Development or Commercialisation (as appropriate) of one or more Antibody Products (whether in Agreed Indications or Independent Indications).  If the Remaining Party does not wish to continue any such Development or Commercialisation of Antibody Products, upon service of the notice of termination, the Parties shall cease all activities under this Agreement as expeditiously and as cost effectively as possible with due regard for patient safety and the rights of any subjects that are participants in Clinical Studies or Post-Approval Studies and in compliance with Applicable Law.  If the Remaining Party wishes to continue any such Development or Commercialisation of Antibody Products, Article 12.8 shall apply and termination shall take effect on expiry of the Transition Period.

(d)For clarity, this Article 12.3 shall not apply to ImClone’s (or one of its Affiliate’s) development programme in respect of one or more Antibodies, including 1121B, any of which is or may be a Competing Product or otherwise competitive with an Antibody Product, prior to the date, if any, that ImClone elects to cease such Competing Activities pursuant to Article 16.2(b).

12.4Termination for Default

(a)In the event that (i) any representation or warranty made under this Agreement by a Party shall have been untrue in any material respect and this untruth has a material and adverse effect on the other Party in relation to this Agreement, or (ii) there is a material breach or material default of this Agreement by a Party (any event under (i) or (ii), a Default), then the Party not in default (the Non-Defaulting Party) shall have the right to give the other Party (the Defaulting Party) written notice (a Notice of Default), which notice, to be effective, must state the nature of the Default in reasonable detail and must request that the Defaulting Party cure such Default within [***] [Confidential Treatment Required] of the date of such notice (or [***] [Confidential Treatment Required] of the date of such notice with respect to a payment Default ) or such longer period as the Non-Defaulting Party may designate in such notice (the Cure Period).  During any such Cure Period or any extended period in which the Defaulting Party seeks to cure the Default in accordance with Article 12.4(c), all of each Party’s respective rights and obligations under this Agreement, including those in relation to Development, Commercialisation and Manufacture, shall (to the extent applicable) remain in force and effect.

(b)The Cure Period with respect to a Default shall commence on the date that the Defaulting Party receives the Notice of Default with respect thereto.

(c)If a Default is not cured within the applicable Cure Period (or, if such Default cannot be cured in such Cure Period and if the Defaulting Party has not used

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[***] [Confidential Treatment Required] to cure such Default within such period and thereafter diligently continues such actions, provided that payment Defaults must be cured within the Cure Period), the Non-Defaulting Party, at its option, may immediately serve written notice on the Defaulting Party terminating this Agreement, such termination to take effect in accordance with Article 12.4(d).

(d)Any notice of termination served pursuant to Article 12.4(c), shall specify whether the Non-Defaulting Party wishes to continue Development or Commercialisation (as appropriate) of one or more Antibody Products (whether in Agreed Indications or Independent Indications).  If the Non-Defaulting Party does not wish to continue any such Development or Commercialisation of Antibody Products, upon the notice of termination taking effect, the Parties shall cease all activities under this Agreement as expeditiously and as cost effectively as possible with due regard for patient safety and the rights of any subjects that are participants in Clinical Studies or Post-Approval Studies and in compliance with Applicable Law and this Agreement shall terminate on the date on which all such activities cease.  If the Non-Defaulting Party (which Party shall be deemed to be the Remaining Party) wishes to continue Development or Commercialisation of Antibody Products, Article 12.8 shall apply, termination shall take effect upon expiry of the Transition Period and the Defaulting Party shall be deemed to be the Non-Remaining Party.

12.5Termination for Bankruptcy

(a)All rights and licences granted under or pursuant to this Agreement by ImClone or UCB are, and shall otherwise be deemed to be, licences of rights to “intellectual property” as defined under bankruptcy laws, rules and regulations in the Territory, including as defined under Article 101 of the United States Bankruptcy Code.  The Parties agree that the Remaining Party (as defined in Article 12.5(b)) shall retain and may fully exercise all of its rights and elections under bankruptcy laws, rules, regulations or statutes in the Territory, including the United States Bankruptcy Code.  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a bankrupt Party the other Party shall be entitled to a complete duplicate of (or complete access to, as appropriate) any intellectual property which at that date is known to be necessary or useful to the Development, Commercialisation, Manufacturing or other exploitation of the Antibody Products and all embodiments of such intellectual property; and the same, if not already in the other Party’s possession, shall be promptly delivered to the other Party: (i) upon any such commencement of a bankruptcy proceeding, upon the other Party’s written request for the same, unless the non-bankrupt Party (or a trustee on behalf of the bankrupt Party) elects within [***] [Confidential Treatment Required] to continue to perform all of its obligations under this Agreement; or (ii) if not delivered under (a) above, upon the rejection of this Agreement by or on behalf of the bankrupt Party, upon written request for the same by the other Party.

(b)Without prejudice to Article 12.5(a), this Agreement may be terminated by a Party (which Party shall be deemed to be the Remaining Party) upon prior

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written notice to the other Party (which Party shall be deemed to be the Non-Remaining Party) in the event that:

(i)the other Party shall make an assignment for the benefit of its creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of custodian, receiver or any trustee for it or a substantial part of its assets, or shall commence any proceeding under any bankruptcy, reorganisation, arrangement, readjustment of debt, dissolution or liquidation law, rule, regulation or statute of any jurisdiction (other than for the purposes of a solvent amalgamation or reconstruction), in effect from time to time; or

(ii)if there shall have been filed against the other Party any such bona fide petition or application, or any such proceeding shall have been commenced against it, in which an order for relief is entered or which remains undismissed for a period of [***] [Confidential Treatment Required] or more; or

(iii)if the other Party by any act or omission shall indicate its consent to, approval of or acquiescence in any such petition, application or proceeding or order for relief or the appointment of a custodian, receiver or trustee for it or any substantial part of its assets, and shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of [***] [Confidential Treatment Required] or more (each of (i), (ii) and (iii), an Insolvency Event).

Notwithstanding the foregoing, this Agreement shall not be terminated pursuant to this Article 12.5(b) if, within [***] [Confidential Treatment Required]of receipt of the termination notice described in this Article 12.5(b), the Party experiencing the Insolvency Event demonstrates to the other Party that it is not insolvent.  Any notice of termination served pursuant to this Article 12.5(b) shall specify whether the Remaining Party wishes to continue Development or Commercialisation (as appropriate) of one or more Antibody Products, (whether in Agreed Indications or Independent Indications).  If the Remaining Party does not wish to continue any such Development or Commercialisation of Antibody Products, upon receipt of the notice of termination by the other Party, the Parties shall cease all activities under this Agreement as expeditiously and as cost effectively as possible with due regard for patient safety and the rights of any subjects that are participants in Clinical Studies or Post-Approval Studies and this Agreement shall terminate on the date on which all such activities cease.  If the Remaining Party wishes to continue Development or Commercialisation of Antibody Products, Article 12.8 shall apply and termination shall take effect upon expiry of the Transition Period.

12.6Termination for Challenging Validity of Core Patents

In the event that a Party or any of its Affiliates (the Challenging Party) challenges the validity or enforceability of any of the other Party’s Core Patent Rights, then the Party whose Core Patent Rights are the subject of the challenge (the Non-Challenging Party) may give the Challenging Party written notice of its intention to

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terminate this Agreement if the Challenging Party does not withdraw its challenge within [***] [Confidential Treatment Required] after delivery of such notice.  If the Challenging Party has not withdrawn its challenge to the validity or enforceability of the Non-Challenging Party’s Core Patent Rights by the end of that [***] [Confidential Treatment Required] period, the Non-Challenging Party may, at its option, terminate this Agreement upon prior written notice to the Challenging Party.  Upon termination of this Agreement pursuant to this Article 12.6, the Non-Challenging Party shall be deemed to be the Remaining Party and the Challenging Party shall be deemed to be the Non-Remaining Party.  Any notice of termination served pursuant to this Article 12.6 shall specify whether the Remaining Party wishes to continue Development or Commercialisation (as appropriate) of one or more Antibody Products (whether in Agreed Indication or Independent Indications).  If the Remaining Party does not wish to continue any such Development or Commercialisation of Antibody Products, upon the notice of termination taking effect, the Parties shall cease all activities under this Agreement as expeditiously and as cost effectively as possible having due regard for patient safety and the rights of any subjects that are participants in Clinical Studies or Post-Approval Studies and in compliance with Applicable Law and this Agreement shall terminate on the date on which all such activities cease.  If the Remaining Party wishes to continue Development or Commercialisation of Antibody Products, Article 12.8 shall apply and termination shall take effect upon expiry of the Transition Period.

12.7Remedies

The Parties acknowledge and agree that termination as provided in this Article 12 is not the exclusive remedy for any matter underlying a right of termination, but rather remedies are cumulative.

12.8Consequences of Termination

(a)Upon notice of termination of this Agreement being given under Articles 12.2, 12.3, 12.4, 12.5 or 12.6 where there is a Remaining Party (as defined in the applicable Article) that wishes to continue with the Development or Commercialisation of any Antibody Products, the following terms shall apply:

(i)The Collaboration Committee shall promptly meet to devise a transition plan (Transition Plan) which provides for a prompt, smooth, orderly and cost-effective transition of, and which sets forth the responsibilities and a timetable for transferring, all Development and Commercialisation and Manufacturing (to the extent applicable) responsibilities to the Remaining Party, including those activities set forth in paragraphs (ii) to (xi) of this Article 12.8(a).  Where the Collaboration Committee cannot agree on the Transition Plan the matter shall be resolved pursuant to the dispute resolution process set forth in Article 15, provided that, except as otherwise provided in this Article 12.8 or elsewhere in this Agreement, the Non-Remaining Party shall not be required to perform any Development, Commercialisation or Manufacturing activities beyond those assigned to it in the Development Plan, the Commercialisation Plan or the Manufacturing Plan and in no event shall the Non-Remaining Party be required to incur any expenses beyond those set forth in the applicable Development Budget, the Commercialisation Budget or Manufacturing

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Plan.  Except as otherwise agreed by the Parties or as provided in this Article 12.8(a), such transition shall be completed as soon as practicable and, in any event, shall be no later than [***] [Confidential Treatment Required] from the date of the relevant termination notice (the Transition Period), except with respect to any Manufacturing activities performed by or on behalf of the Non-Remaining Party, which shall continue after the Transition Period as provided in Article 12.8(a)(vii) and (viii) and the applicable Manufacturing Agreement or existing supply agreement listed in Schedule 4.  Such Transition Plan shall provide for (1) transferring all Development, Manufacturing and Commercialisation responsibilities to the Remaining Party in all Agreed Indications and Independent Indications (all such Agreed Indications and Independent Indications, the Continuing Indications), and (2) ceasing all Development, Commercialisation and Manufacturing activities in relation to any Continuing Indications that the Remaining Party wishes to discontinue, in each case as expeditiously as possible in accordance with this Article 12 whilst (where appropriate) maintaining a supply of Antibody Products to meet Development and Commercialisation requirements and minimising interruption of Development, Commercialisation and Manufacture of Antibody Products in the relevant Indications.

(ii)Until the end of the Transition Period (and with respect to Manufacturing by the Non-Remaining Party as provided in paragraph (i) above), the Non-Remaining Party, [***] [Confidential Treatment Required], shall make its personnel and other resources [***] [Confidential Treatment Required] available to the Remaining Party as [***] [Confidential Treatment Required] and shall, by the end of the Transition Period (and with respect to Manufacturing by the Non-Remaining Party as provided in paragraph (i) above), transfer copies of all relevant information, files or data relating to the Antibody Products to the Remaining Party and assign to the Remaining Party or its designee all rights, title and interest therein.

(iii)By the end of the Transition Period (and with respect to Manufacturing by the Non-Remaining Party as provided in paragraph (i) above), the Non-Remaining Party, [***] [Confidential Treatment Required], shall assign and transfer to the Remaining Party all of its rights, title or interest in or to any regulatory filings and Regulatory Approvals then in its name (or in the name of any of its Affiliates, or, unless otherwise agreed by the Parties, in the name of any of its sublicensees or Distributors or any of their agents) for Antibody Product for the Continuing Indications (including all INDs and Drug Approval Applications) and shall notify the appropriate Regulatory Authorities and take any other action [***] [Confidential Treatment Required] to effect such assignment.  The Remaining Party shall take all actions [***] [Confidential Treatment Required] to assist in effecting such assignment and transfer.  If ownership of a regulatory submission or Regulatory Approval cannot be transferred to the Remaining Party in any country, the Non-Remaining Party, [***] [Confidential Treatment

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Required], shall and does hereby grant and shall cause its Affiliates, and, unless otherwise agreed by the Parties, its sublicensees and Distributors to grant to the Remaining Party a [***] [Confidential Treatment Required] licence and right of access, reference and use to such regulatory submission and Regulatory Approvals for all purposes in the Field in such country.  If such licence and right of access, reference and use is not sufficient to permit the Remaining Party to file a Drug Approval Application and receive Regulatory Approval or to Develop, use, sell, have sold, offer to sell, resell, import, export, distribute or otherwise transfer possession of or otherwise Commercialise or Manufacture the relevant Antibody Product for all purposes in the Field, or as otherwise requested by the Remaining Party, the Non-Remaining Party, [***] [Confidential Treatment Required], shall provide the Remaining Party with the complete data package, including any data referenced therein, that the Non-Remaining Party, its Affiliates or their Distributors or sublicensees used in regulatory submissions in such country (including INDs, Drug Approval Applications and any other filings to or with the applicable Regulatory Authorities) in order to allow the Remaining Party or its designee to file such IND and Drug Approval Application and to receive Regulatory Approval in its or such designee’s own name.

(iv)By the end of the Transition Period the Non-Remaining Party shall, at the request of the Remaining Party, assign its rights or grant sufficient and, to the extent possible, [***] [Confidential Treatment Required], under all of the Non-Remaining Party’s rights under any then-existing In-Licences to the extent the same relates to Developing, Commercialising, Manufacturing, making, having made, using, selling, having sold, offering to sell or resell, importing, exporting, distributing or otherwise transferring physical possession of or otherwise transferring title in or to Antibody Products in the Field and shall not (until receiving notice that the Remaining Party does not desire such an assignment or sublicence) terminate or amend any such In-Licence without the Remaining Party’s prior written consent.  Until receiving notice that the Remaining Party does not desire an assignment or sublicence of an In-Licence, the Non-Remaining Party shall continue to comply with its obligations under Article 9.3 with respect to each such In-Licence.

(v)Each Party, [***] [Confidential Treatment Required], shall destroy or at the other Party’s request return, all of the other Party’s Confidential Information (other than with respect to maintaining one (1) archival copy of Confidential Information relating to any of the same for its legal files, for the sole purpose of determining its obligations under this Agreement) and Materials and shall provide the other Party with certification by one of its officers that all such Confidential Information and Materials have been destroyed or returned to the other Party, as appropriate, provided that the Remaining Party shall be entitled to retain all of the Non-Remaining Party’s Confidential Information and Materials that are [***] [Confidential Treatment

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Required] to Develop, Commercialise or Manufacture Antibody Products in the Field in the Territory.

(vi)The Non-Remaining Party, [***] [Confidential Treatment Required], shall, at the request and expense of the Remaining Party, provide the Remaining Party with such assistance as is [***] [Confidential Treatment Required] to effectuate a smooth and orderly transition of any such Development, Manufacture and Commercialisation activities to the Remaining Party or its designee so as to minimize any disruption of such activities, including, at the request of the Remaining Party, the assignment (and assumption by the Remaining Party) of any such Regulatory Approvals and related regulatory documentation and contracts and the transfer of any such biological materials related to any Antibody Product, in each case that is the subject of such obligation.  Further, upon the Remaining Party’s request, the Non-Remaining Party shall provide such technical assistance, [***] [Confidential Treatment Required], as may [***] [Confidential Treatment Required]be requested to transfer all manufacturing technology that is or had been used by or on behalf of the Non-Remaining Party and its Affiliates in connection with the Manufacture, including process development, of any Antibody Product.

(vii)If the Non-Remaining Party is Manufacturing any Antibody Products it shall continue to supply the Antibody Products it is then manufacturing to the Remaining Party on the same terms as applied prior to termination until the earlier of [***] [Confidential Treatment Required] from the date of termination or such time as the Remaining Party or a Third Party designated by the Remaining Party assumes responsibility for Manufacture of such Antibody Products, which it shall have the right to do, save that the [***] [Confidential Treatment Required]; during the period of Manufacture by the Non-Remaining Party, the Remaining Party shall be deemed to have automatically granted to the Non-Remaining Party a [***] [Confidential Treatment Required] right and licence, to use (y) any Joint Know-How or Joint Patent Rights and (z) if the Non-Remaining Party is (1) UCB, to use any ImClone Know How, ImClone Patent Rights, Manufacturing Know How (to the extent Controlled by ImClone) and Manufacturing Patents (to the extent Controlled by ImClone) and (2) ImClone, to use any UCB Know-How and UCB Patent Rights Manufacturing Know How (to the extent Controlled by UCB) and Manufacturing Patents (to the extent Controlled by UCB) , in each case ((y) and (z)) as [***] [Confidential Treatment Required] to (and only to) Manufacture and supply such Antibody Products to the Remaining Party as provided herein.

(viii)If a Third Party supplier is Manufacturing any Antibody Products, then the Non-Remaining Party, [***] [Confidential Treatment Required], shall, at the request of the Remaining Party, use all [***] [Confidential Treatment Required] to assign to the Remaining Party, and upon such assignment, the Remaining Party shall assume, any applicable

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manufacturing agreement and the Non-Remaining Party[***] [Confidential Treatment Required], shall cooperate with the Remaining Party at the Remaining Party’s request to participate in any discussions with such Third Party supplier with respect to such assignment (and assumption) or the negotiation of any direct agreement with a Third Party supplier, provided that, (x) to the extent the Remaining Party receives the benefit of any existing Third Party Manufacturing Agreement or existing supply agreement listed in Schedule 4, the Remaining Party shall be [***] [Confidential Treatment Required] to the Remaining Party and (y) if the Remaining Party requests that the Non-Remaining Party terminate any such agreement with a Third Party supplier, the Remaining Party shall be responsible for [***] [Confidential Treatment Required] to such Third Party supplier.  In any event the Non-Remaining Party, [***] [Confidential Treatment Required], shall, at the request of the Remaining Party, (1) effect a smooth and orderly transition of all Manufacturing responsibilities to the Remaining Party or its designee, and (2) cooperate with the Remaining Party or its designee in the conduct of any such Manufacturing responsibilities and the exercise of its rights under this Agreement, such as, for example, exercising any right or enforcing any obligation under any Manufacturing Agreement with a Third Party supplier and providing the Remaining Party or its designee with any copies of relevant documents (including Manufacturing Know How (to the extent within the Control of the Non-Remaining Party), quantities of all Materials (including master cell bank) and rights of reference, as necessary to allow the Remaining Party to exercise its rights under this Agreement.

(ix)The Non-Remaining Party,[***] [Confidential Treatment Required], shall:  (y) to the extent permitted by such agreements, use all [***] [Confidential Treatment Required] to assign its rights or grant sufficient rights under all other Third Party agreements to the extent the same relate to an Antibody Product as requested to do so by the Remaining Party and, upon such assignment, the Remaining Party shall assume such agreements; and (z) provide [***] [Confidential Treatment Required] assistance to the Remaining Party to assume management of such agreements.

(x)Each Party shall retain the audit rights specified under this Agreement to the extent reasonably required to verify the correctness of any amounts payable to it under this Agreement.

(xi)The Remaining Party shall bear all [***] [Confidential Treatment Required].

(b)The Non-Remaining Party shall not be considered in breach of this Article 12 to the extent it fails to fulfil its obligations under this Article 12.8 because of an injunction imposed by a court of law arising from an action brought by a Third Party for infringement of Third Party Patent Rights, Third Party Trademark rights or other Third Party intellectual property rights, except to the extent that such injunction results from a breach of the Non-Remaining Party’s

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representations and warranties under Article 13 or, if the Non-Remaining Party is a Manufacturer, a breach of the Non-Remaining Party’s representations and warranties under any Manufacturing Agreement.

(c)Upon termination of this Agreement for any reason, all of the right, title and interest of the Non-Remaining Party and its Affiliates in the Product Trademarks shall automatically be assigned, [***] [Confidential Treatment Required], to the Remaining Party.  The Remaining Party shall also have the right, for a reasonable period not to exceed [***] [Confidential Treatment Required] from the end of the Transition Period, to use the ImClone Company Marks (if the Remaining Party is UCB) or the UCB Company Marks (if the Remaining Party is ImClone), as applicable, solely in the selling of any existing inventory of Antibody Products and using any existing inventory of Promotional Materials and packaging, [***] [Confidential Treatment Required], and following the expiration of such [***] [Confidential Treatment Required] period such inventory shall be destroyed by the Remaining Party, the Remaining Party shall certify such destruction to the Non-Remaining Party and the Remaining Party shall immediately cease all use of the Non-Remaining Party’s Corporate Marks in connection with Antibody Products.  In addition:

(i)Upon termination of this Agreement where ImClone is the Remaining Party, (A) each of the licences UCB granted to ImClone pursuant to this Agreement (save for those with respect to the UCB Company Marks) shall automatically upon termination convert to a [***] [Confidential Treatment Required].

(ii)Upon termination of this Agreement where UCB is the Remaining Party, (A) each of the licences ImClone granted to UCB pursuant to this Agreement (save for those with respect to the ImClone Company Marks) shall automatically upon termination convert to a [***] [Confidential Treatment Required].

(iii)Upon termination of this Agreement, if on or before a termination the Non-Remaining Party granted a sublicence as permitted by Article 9.5 and the applicable sublicensee is not in breach of its obligations under such sublicence agreement, the sublicence agreement shall, if the Remaining Party so elects and the sublicence agreement so permits, be deemed to be a sublicence agreement between the Remaining Party and the sublicensee.

12.9[***] [Confidential Treatment Required]

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12.10Additional Termination Consequences in the Event of Termination under Certain Articles

(a)In the event of termination of this Agreement under any Article, (i) not later than [***] [Confidential Treatment Required] after the date on which such termination takes effect, the Parties will reconcile Operating Profits and Losses and promptly make such payments as are necessary to effect such reconciliation, and (ii) the Non-Remaining Party shall cease to have any right or, except as provided in Article 12.8 or elsewhere in this Agreement or in a Transition Plan, obligation to fund or participate in the Development of any Antibody Product and shall have no right or obligation to share in any Operating Profits and Losses, [***] [Confidential Treatment Required].

(b)Following termination of this Agreement pursuant to Articles 12.2, 12.3, 12.4 or 12.6, if the Non-Remaining Party materially breaches the terms of any licence granted by the Non-Remaining Party to the Remaining Party under Article 12.8(c), the Remaining Party may, by written notice to the Non-Remaining Party, require the Non-Remaining Party to remedy that breach and, if such breach has not been remedied within [***] [Confidential Treatment Required] of receipt of such written notice, the Remaining Party may, by notice in writing to the Remaining Party, [***] [Confidential Treatment Required].

(c)Following termination of this Agreement pursuant to any Article, if the Remaining Party or any of its Affiliates challenges the validity or enforceability of any of the Non-Remaining Party’s Core Patent Rights or takes the position that the Development, Manufacture or Commercialisation of Antibody Product falls outside the claims of the Non-Remaining Party’s Core Patent Rights, then the Non-Remaining Party may give the Remaining Party written notice of its intention to terminate the licences granted by the Non-Remaining Party pursuant to this Agreement if the Remaining Party does not withdraw its challenge or position within sixty (60) day after delivery of such notice.  If the Remaining Party has not withdrawn its challenge to the validity or enforceability of, or its position with respect to, the Non-Remaining Party’s Core Patent Rights by the end of that sixty (60) day period, the Non-Remaining Party may, at its option, terminate all licences granted by the Non-Remaining Party to the Remaining Party pursuant to this Agreement upon prior written notice to the Remaining Party.  Upon such notice the Remaining Party shall cease all activities being conducted under those licences as expeditiously as possible having due regard for patient safety and the rights of

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any subjects that are participants in Clinical Studies or Post-Approval Studies and in compliance with Applicable Law.

12.11Surviving Rights

(a)Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing before such expiration or termination.  Any expiration or termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement before expiration or termination, including the right to receive any payments due but unpaid before expiration or termination.

(b)The following Articles shall survive expiration or termination of this Agreement, howsoever caused: [***] [Confidential Treatment Required] to the extent applicable to activities occurring before or surviving termination and any other provisions which are expressed to survive expiration or termination or which are required to give effect to such expiration or termination.  The [***] [Confidential Treatment Required].  All other rights and obligations shall terminate.

13.REPRESENTATIONS, WARRANTIES AND COVENANTS

13.1Authority and Consents

(a)UCB and ImClone each represent and warrant to the other Party that as of the Effective Date:

(i)it has full right, power and authority to enter into this Agreement and perform its obligations under this Agreement and has taken all necessary corporate action on its part required to authorise the execution and delivery of this Agreement and the performance of its obligations under this Agreement;

(ii)to its Knowledge, this Agreement constitutes a legal, valid and binding obligation of such Party that is enforceable against it in accordance with its terms subject to all limitations of bankruptcy, liquidation, principles of equity (including moratorium and enforcements of creditors’ rights generally), general principles of equity (including those relating to specific performance, injunctions and other remedies) and public policy constraints (including those pertaining to limitations or exclusion of liability, competition law, penalties and jurisdictional issues including conflicts of law);

(iii)the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or understanding to which it is a party or by which it is bound, nor to its Knowledge violate any law, rule or regulation of any court, governmental body or administrative or other agency having jurisdiction over it;

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(iv)such Party has not granted any rights to any Third Party that would conflict with the rights granted to the other Party under this Agreement;

(v)such Party has the right to grant the licences, sublicences and other rights granted by it pursuant to this Agreement; and

(vi)all employees and officers (other than administrative and
non-technical personnel) of it and its Affiliates involved in the Development, Commercialisation or Manufacture of Antibody Products for Agreed Indications or Independent Indications have executed agreements requiring assignment to the Party or its Affiliates of all inventions made during the course of and as a result of their association with such Party or its Affiliates and obligating the individual to maintain as confidential the confidential information of such Party and its Affiliates.

(b)UCB and ImClone each covenant and agree to the other Party that during the Term, neither it nor its Affiliates will grant any rights to any Third Party that would conflict with the rights granted to the other Party under this Agreement.

(c)UCB and ImClone each represent and warrant to the other Party that neither it, nor any of its Affiliates, has been debarred and is not subject to debarment and that it and they have not used, and covenant that it will not, and will procure that its Affiliates will not, use, in any capacity, in connection with the services to be performed under the this Agreement, any person who has been debarred pursuant to section 306 of the FFDCA, 21 U.S.C. § 335a, or who is the subject of a conviction described in such section (or under any analogous provisions of Applicable Law outside the United States).

13.2Additional Representations and Warranties of ImClone

ImClone further represents and warrants to UCB that as of the Effective Date:

(a)[***] [Confidential Treatment Required];

(b)the Patent Rights set forth in Part 4 of Schedule 1 constitute all of the ImClone Patent Rights that exist as of the Effective Date;

(c)ImClone has disclosed to UCB the patents, patent applications and the official correspondence from the corresponding file histories of the ImClone Core Patent Rights;

(d)ImClone has not received a written notice that ImClone or any of its Affiliates is in material breach or material default of any of the agreements listed in Part 2 of Schedule 1, and true, complete and correct copies (with only such redactions as are necessary to protect confidential and financial information) of all such agreements have been provided to UCB prior to the Effective Date;

(e)ImClone has not received any written notice from a Third Party alleging that the Development, Commercialisation and Manufacturing activities contemplated by this Agreement with respect to Antibody Products will

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infringe any Patent Rights or other intellectual property or proprietary right of such Third Party, except for those Patent Rights that are the subject of In-Licences and are included in the ImClone Patent Rights; and

(f)ImClone has made available to UCB all information of which it has Knowledge relating to Third Party Patents which may be [***] [Confidential Treatment Required] adverse to the Development, Commercialisation and Manufacturing activities contemplated by this Agreement with respect to Antibody Products and which would have affected UCB’s decision to enter into this Agreement.

13.3Additional Representations, Warranties and Covenants of UCB

UCB further represents and warrants to ImClone that as of the Effective Date:

(a)[***] [Confidential Treatment Required]

(b)the Patent Rights set forth in Part 3 of Schedule 1 constitute all of the UCB Patent Rights that exist as of the Effective Date;

(c)UCB has disclosed to ImClone the patents, patent applications and the official correspondence from the corresponding file histories of the UCB Core Patent Rights;

(d)UCB has not received a written notice that UCB or any of its Affiliates is in material breach or material default of the agreements listed in Part 1 of Schedule 1, and true, complete and correct copies (with only such redactions as are necessary to protect confidential and financial information) of all such agreements have been provided to ImClone prior to the Effective Date;

(e)UCB has not received any written notice from a Third Party alleging that the Development, Commercialisation and Manufacturing activities contemplated by this Agreement with respect to Antibody Products will infringe any Patent Rights or other intellectual property or proprietary right of such Third Party, except for those Patent Rights that are the subject of In-Licences and are included in the UCB Patent Rights;

(f)UCB has made available to ImClone all information of which it has Knowledge relating to Third Party Patents which may be materially adverse to the Development, Commercialisation and Manufacturing activities contemplated by this Agreement with respect to Antibody Products and which would have affected ImClone’s decision to enter into this Agreement;

(g)UCB has made available to ImClone all INDs and other filings and all material correspondence with the Regulatory Authorities relating to Antibody Products in UCB’s possession as of the Effective Date; and

(h)UCB has disclosed to ImClone all [***] [Confidential Treatment Required] adverse information of which it has Knowledge with respect to the safety and efficacy of the Antibody Products or otherwise [***] [Confidential Treatment Required] adverse to the Development, Commercialisation and Manufacturing activities contemplated by this Agreement with respect to Antibody Products

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and, in each case, which would have affected ImClone’s decision to enter into this Agreement.

13.4Disclaimer of Representation and Warranty

(a)Nothing in this Agreement shall be construed as a warranty or representation by either Party:

(i)that the Development, Commercialisation, Manufacture, making, having made, using, selling, having sold, offering to sell or reselling, importing, exporting, distributing or otherwise transferring physical possession of or otherwise transferring title in or to any Antibody Product under, or in connection with, this Agreement is or will be free from infringement of, or that the activities conducted pursuant to this Agreement will not infringe, Patent Rights, copyrights, Trademarks, industrial design or other intellectual property rights of any Third Party; or

(ii)that any Antibody Product Developed, Manufactured, Commercialised, made, made on its behalf, used, sold, sold on its behalf, offered to be sold or resold, imported, exported, distributed or with respect to which physical possession was otherwise transferred or with respect to which title in or to was otherwise transferred under this Agreement is or will be effective, valuable, safe, non-toxic or patentable.

Each Party acknowledges and agrees that the activities conducted pursuant to this Agreement and the Antibody Products are experimental as of the Effective Date.  EXCEPT AS EXPRESSLY SET OUT IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS, WAIVES, RELEASES, AND RENOUNCES ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF EFFICACY, SAFETY, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE WITH RESPECT TO ANY MATTER ARISING IN CONNECTION WITH THIS AGREEMENT, INCLUDING ANY ACTIVITIES CONDUCTED HEREUNDER, OR ANY ANTIBODY PRODUCTS.

(b)Notwithstanding anything to the contrary in this Agreement, there shall be no limit or exclusion of any Party’s liability for fraud or for death or personal injury caused by that Party’s own negligence or wilful misconduct.

14.INDEMNIFICATION AND INSURANCE

14.1Indemnification

(a)Subject to Article 14.1(b) and Article 14.1(c), each Party agrees to save, defend and hold the other Party, its Affiliates and their respective directors, officers, agents and employees (collectively, the Indemnitees) harmless from and against any and all losses, damages, liabilities, settlements, penalties, fines, costs and expenses (including, [***] [Confidential Treatment Required] attorneys’ fees and expenses) payable to a Third Party (collectively, Losses) arising out of any Third Party claims, suits, actions or demands (collectively,

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Third Party Claims) resulting directly or indirectly from the Development, Manufacturing, Commercialisation, use, handling, storage, sale or other disposition of Antibody Products by the indemnifying Party, its Affiliates, or any of their respective Distributors, sublicensees or other agents (other than the Indemnitees), but only to the extent such Losses result from:

(i)[***] [Confidential Treatment Required] of the indemnifying Party, any of its Affiliates, or any of their respective Distributors, sublicensees or other agents (other than the Indemnitees);

(ii)any claim of intellectual property infringement arising from the indemnifying Party’s use of the other Party’s Corporate Marks in a manner not permitted by this Agreement;

(iii)any breach of Applicable Law by the indemnifying Party, any of its Affiliates or any of their respective Distributors, sublicensees or other agents (other than the Indemnitees) in performing any activities in connection with this Agreement;

(iv)any breach by the indemnifying Party or any of its Affiliates of this Agreement any Manufacturing Agreement, any agreement listed in Schedule 4 or any In-Licence entered into prior to the Effective Date; or

(v)the Development or Commercialisation of an Antibody Product for Independent Indications by the indemnifying Party, any of its Affiliates or any of their respective Distributors, sublicensees or other agents (other than the Indemnitees) to the extent the indemnifying Party is the Continuing Party with respect thereto and only with respect to Third Party Claims made prior to the date the Non-Continuing Party Converts such Independent Indication to a Converted Agreed Indication pursuant to Article 8.9,

in each case, save to the extent that such Losses result from [***] [Confidential Treatment Required] of any of the Indemnitees or breach by any of the Indemnitees of this Agreement, any Manufacturing Agreement, any of the existing supply agreements listed in Schedule 4 or any In-Licence.  [***]   [Confidential Treatment Required].

(b)Upon termination of this Agreement, where there is a Remaining Party, the Remaining Party agrees to save, defend and hold the Non-Remaining Party, its Affiliates and their respective directors, officers, agents and employees (the Non-Remaining Party Indemnitees) harmless from and against any and all Losses arising out of any Third Party Claims to the extent that such Losses result directly or indirectly from:

(i)the Development, Commercialisation, Manufacture, use, handling, storage, sale, offer to sell, resale, importation, exportation, distribution or other disposition or transfer of physical possession of any Antibody Product by the Remaining Party, its Affiliates, or any of their respective Distributors, sublicensees or other agents (other than the

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Non-Remaining Party Indemnitees) (collectively, Representatives) after the effective date of termination of this Agreement except to the extent that such Losses result directly or indirectly from the Manufacture or supply of Antibody Product by or on behalf of the Non-Remaining Party or its Affiliates that does not meet the Antibody Product Standards or was not Manufactured in accordance with Applicable Law;

(ii)the use of the Non-Remaining Party’s Corporate Marks after the effective date of termination, save as permitted by Article 12.8(c); or

(iii)any act or omission of the Remaining Party after the effective date of termination that results in the Non-Remaining Party being in breach of any In-Licence, any Third Party manufacturing agreement or any other Third Party agreement with respect to which the Non-Remaining Party, in accordance with Article 12.8(a)(iv), (viii) or (ix) (as applicable), remains a party after the effective date of termination,

in each case, save to the extent such Losses result from [***]   [Confidential Treatment Required]. of any Non-Remaining Party Indemnitee or any breach by the Non-Remaining Party or its Affiliates of this Agreement or any agreement referred to in paragraph (iii) above (save for any such breach resulting from any act or omission of the Remaining Party after the effective date of termination).

(c)The indemnity under Article 14.1(a) shall not apply to Losses arising out of Third Party Claims resulting directly or indirectly from Manufacturing activities conducted by any Third Party supplier pursuant to a Manufacturing Agreement to which both UCB and ImClone are parties.  The indemnity under Article 14.1(a) shall apply to Losses arising out of Third Party Claims resulting directly or indirectly from Manufacturing activities conducted by any Third Party supplier pursuant to a Manufacturing Agreement or an existing supply agreement listed in Schedule 4, to which only the indemnifying Party is a party, provided that:

(i)[***]   [Confidential Treatment Required]; and

(ii)[***]   [Confidential Treatment Required].

(d)In the event that either Party receives notice of a Third Party Claim with respect to an Antibody Product in the Territory, such Party shall inform the other Party as soon as reasonably practicable.  The Parties shall confer on how to respond to the Third Party Claim and how to handle the Third Party Claim in an efficient manner.

(e)In the event that a Party is seeking indemnification under this Article 14 it shall inform the indemnifying Party of a Third Party Claim as soon as reasonably practicable after it receives notice of the Third Party Claim, shall permit the indemnifying Party (at the indemnifying Party’s option) to assume direction and control of the defence of the Third Party Claim (including the right to settle the claim solely for monetary consideration), shall co-operate as

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requested ([***]   [Confidential Treatment Required]) in the defence of the Third Party Claim, and shall not settle or compromise the Third Party Claim without the express written consent of the indemnifying Party, [***]   [Confidential Treatment Required].

14.2Insurance

Beginning on the first date after the Effective Date that an [***]   [Confidential Treatment Required], UCB and ImClone shall each use its [***]   [Confidential Treatment Required] to procure and maintain, [***]   [Confidential Treatment Required], the following insurance coverages:

(a)Public and Product Liability, including coverage for products and completed operations (including coverage for advertising and personal injury), which is maintained for a period of at least [***]   [Confidential Treatment Required].  The policy shall have a limit of no less than [***]   [Confidential Treatment Required].

(b)Foreign Local Coverage:  Where required by Applicable Law for the activities of either Party with respect to Antibody Products, such Party shall effect foreign local coverages in an amount [***]   [Confidential Treatment Required];

provided that, to the extent that such insurance covers [***]   [Confidential Treatment Required].  The Parties will discuss the availability of insurance coverage for each [***]   [Confidential Treatment Required].  Unless otherwise agreed each Party shall obtain insurance for [***]   [Confidential Treatment Required].

All policies under (a) and (b) above shall be written by insurance companies with an [***]   [Confidential Treatment Required].  Each Party shall provide to the other Party a copy of the corresponding certificate of insurance or broker’s certificate evidencing such coverages and shall notify the other Party if at any time any insurance coverage effected pursuant to this Article 14.2 is voided or cancelled.

15.DISPUTE RESOLUTION

15.1Committees and Chief Executive Officer Review

The Parties recognise that disputes as to certain matters may from time to time arise during the Term which relate to either Party’s rights and/or obligations under this Agreement and which are not resolved by the Collaboration Committee.  It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising from, concerning or in any way relating to this Agreement or the collaboration (whether or not such dispute gives rise to a right to terminate this Agreement) (each a Dispute) in an expedient manner by mutual co-operation and without resort to litigation.  Unless otherwise expressly provided in this Agreement (including pursuant to Article 4.7(c)), all Disputes shall be decided pursuant to this Article 15.

(a)Unless otherwise expressly provided in this Agreement, all Disputes (including any dispute within the JDT, JCT, JMT or JPC) shall first be

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referred to the Collaboration Committee for resolution in accordance with the provisions of Article 3.3(a).

(b)If the Collaboration Committee is unable to resolve any Dispute within [***]   [Confidential Treatment Required] after such matter was first referred to or considered by the Collaboration Committee, whichever is earlier, or in such longer period of time as the Parties may agree:

(i)if the Dispute falls within Article 15.2, it may be resolved [***]   [Confidential Treatment Required] by the Party [***]   [Confidential Treatment Required] in accordance with that Article;

(ii)subject to Article 15.1(b)(iii), if neither Party is entitled to resolve such Dispute [***]   [Confidential Treatment Required] in accordance with Article 15.2, then such matter shall, at the written request of either Party, be referred to the Chief Executive Officers of each of the Parties as soon as practicable but in any event no later than [***]   [Confidential Treatment Required] after such request.  Each Chief Executive Officer shall have the right to engage the services of any number of independent experts in the field in question (such independent expert(s) to be engaged under obligations of confidentiality and non-use equivalent to those set forth in Article 11 and at the [***]   [Confidential Treatment Required]) to assist the Chief Executive Officer in making a determination on the unresolved Dispute, and each Chief Executive Officer shall consider in good faith the analyses and opinions of any such independent experts engaged by either of them in making a determination.  If the Chief Executive Officers are unable to resolve the Dispute within [***]   [Confidential Treatment Required] after such referral, or such longer period as the Chief Executive Officers may agree, the matter shall be resolved pursuant to Article 15.3, except as otherwise provided in Article 15.5; or

(iii)if the Dispute relates to the characterization of any Information, Materials or Patent Rights as ImClone Core Patent Rights, UCB Core Patent Rights, Joint Know-How and Joint Patent Rights it shall be resolved by an expert in accordance with Article 15.6.

15.2[***]   [Confidential Treatment Required]

(a)Subject to Articles 15.2(b) and 15.2(c), any Dispute listed in this Article 15.2(a) may, if it has not been resolved by the Collaboration Committee in accordance with Article 15.1(b), be resolved [***]   [Confidential Treatment Required]:

(i)a Dispute regarding the proposed implementation of the Development Plan for an Antibody Product for an Agreed Indication, provided that the proposed implementation of the Development Plan is within the scope of that Development Plan and the Development Budget and is not a Dispute regarding Manufacturing.  [***]   [Confidential Treatment Required];

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(ii)a Dispute regarding the Development of an Antibody Product for an Independent Indication.  [***]   [Confidential Treatment Required];

(iii)a Dispute regarding Commercialisation other than:  (A) a Dispute regarding Manufacturing or (B) a Dispute as to whether either Party has used [***]   [Confidential Treatment Required] to Commercialise an Antibody Product in the countries for which it is Territorial Lead.  [***]   [Confidential Treatment Required];

(iv)a Dispute regarding proposed implementation of the Manufacturing Plan, provided that the proposed implementation of the Manufacturing Plan is within the scope of that Manufacturing Plan, the Development Budget and the Commercialisation Budget, and provided further that such Dispute does not relate to:  [***]   [Confidential Treatment Required];

(v)a Dispute regarding the depiction of a Party’s own Corporate Mark on any Promotional Materials, packaging or Product Labelling for Antibody Products.  [***]   [Confidential Treatment Required];

(vi)a Dispute regarding the formulation of the Transition Plan, provided that the aspects of the proposed Transition Plan in issue are consistent with the Development Plan, the Manufacturing Plan and the Commercialisation Plan.  [***]   [Confidential Treatment Required]; and

(vii)a Dispute regarding the formulation of the transfer plan in accordance with Article 8.6, provided that the aspects of the proposed transition plan in issue are consistent with the Development Plan, the Manufacturing Plan and the Commercialisation Plan.  [***]   [Confidential Treatment Required].

(b)Notwithstanding Article 15.2(a), the Parties agree that:

(i)[***]   [Confidential Treatment Required];

(ii)[***]   [Confidential Treatment Required];

(iii)[***]   [Confidential Treatment Required];

(iv)[***]   [Confidential Treatment Required];

(v)[***]   [Confidential Treatment Required]; and

(vi)[***]   [Confidential Treatment Required].

(c)The Parties shall make all decisions with respect to Disputes subject [***]   [Confidential Treatment Required].

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15.3Mediation

If pursuant to Article 15.1(b)(ii), the Chief Executive Officers are not able to resolve a dispute as described therein within [***]   [Confidential Treatment Required], or such longer period as the Chief Executive Officers may agree (the CEO Period), then the Parties agree to try in good faith to resolve the dispute by non-binding mediation for a period not to exceed [***]   [Confidential Treatment Required], or such longer period as the Parties may agree, from the date of a written request by either Party to do so, provided such request is made within [***]   [Confidential Treatment Required] after the end of the CEO Period.  The mediation shall be conducted by [***]   [Confidential Treatment Required] to be appointed expeditiously by [***]   [Confidential Treatment Required] which mediation shall be administered in accordance with the [***]   [Confidential Treatment Required] mediation rules, except to the extent such rules conflict with any provision of this Article 15.3 in which event such rules shall be waived and the applicable provision of this Article 15.3 shall apply.  Unless otherwise mutually agreed upon by the Parties, the mediation proceedings shall be conducted in [***]   [Confidential Treatment Required] and conducted in English.  The Parties agree that they shall [***]   [Confidential Treatment Required].  [***]   [Confidential Treatment Required].  If the dispute remains unresolved after such sixty ([***]   [Confidential Treatment Required], then either Party shall have the right to resolve such dispute pursuant to Article 15.4.

15.4Arbitration

If the Parties are unable to resolve a dispute pursuant to Article 15.3, then, except as provided in Articles 15.5 and 15.6, they shall, at the written request of either Party, enter into arbitration under the terms of this Article 15.4.  Within [***]   [Confidential Treatment Required] of delivery of notice from one Party to the other initiating arbitration under this Article 15.4, each Party shall select one disinterested, conflict-free, neutral with relevant expertise in the field of drug development if the dispute relates to Development or in the field of drug commercialisation if the dispute relates to Commercialisation or such other field(s) as may be relevant to the dispute, to serve on an arbitration panel to resolve the issue.  The neutral selected by a Party shall not be a past or present employee of or consultant to such Party or of any Affiliate of such Party.  The members of the panel selected by the Parties shall, within [***]   [Confidential Treatment Required] of their selection, select a third disinterested, conflict-free neutral to chair the panel who shall be a lawyer of not less than [***]   [Confidential Treatment Required] standing with experience in the pharmaceutical industry and who shall not be a past or present employee of or consultant to either Party or any Affiliate of such Party.  If the members of the panel selected by the Parties cannot, within [***]   [Confidential Treatment Required] of their selection, agree on a third member, the Parties shall request that the [***]   [Confidential Treatment Required] select the third disinterested, conflict-free member who shall meet the requirements for the third member specified in this Article 15.4.  Consistent with the objective of concluding the proceeding expeditiously, the panel may require and facilitate such discovery as it shall determine is appropriate in the circumstances, taking into account the needs of the Parties and the desirability of making discovery expeditious and cost-effective.  The panel may issue orders to protect the confidentiality of Confidential Information disclosed in discovery.  Each Party shall then have [***]   [Confidential Treatment Required] to submit to the panel a written

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statement of such Party’s position on the issue, which statements shall be provided to the other Party simultaneously.  Each Party shall, within [***]   [Confidential Treatment Required] of receipt of the other Party’s written statement, submit to the panel a written reply, which statements shall be provided to the other Party simultaneously.  The panel shall, within [***]   [Confidential Treatment Required] after receipt of both Parties’ written replies, hold a joint meeting on the issue at which each Party will have an opportunity to make a presentation and to respond to the other Party’s presentation.  Within [***]   [Confidential Treatment Required] of the conclusion of the meeting, the panel shall render its decision in writing.  The panel may extend any of the foregoing time limitations to the extent necessary to conduct such arbitration in a fair and equitable manner with due regard for the objective of concluding the proceeding expeditiously.  The prevailing Party may enter such decision in any court having competent jurisdiction.  The decision of the panel shall be binding on both Parties and shall not be subject to appeal.  [***]   [Confidential Treatment Required].  The costs of the third panel member shall [***]   [Confidential Treatment Required].  Any arbitration shall be held in [***]   [Confidential Treatment Required], conducted in English, and conducted under the rules of the [***]   [Confidential Treatment Rrequired], except to the extent such rules conflict with any provision of this Article 15.4 in which event the applicable provision of this Article 15.4 shall apply.

15.5Matters to proceed to Court

(a)Notwithstanding the foregoing: (i) any dispute relating to the determination of validity, enforceability or infringement of a Party’s Patent Rights or Trademarks shall not be submitted to arbitration but shall instead be submitted exclusively to the courts in the jurisdiction of the relevant Patents or Trademarks, and the Parties consent to the jurisdiction of such courts and (ii) nothing in this Agreement shall prohibit a Party from seeking interim relief in any court of competent jurisdiction.

(b)With respect to any dispute relating to the determination of validity, enforceability or infringement of a Party’s Patent Rights or Trademarks, the Parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding (other than appeals therefrom) with respect to such disputes in the courts in the jurisdiction of the relevant Patents or Trademarks, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

(c)Each Party further agrees that service of any process, summons, notice or document by registered mail to its address set forth in Article 17.2, or any other lawful means, shall be effective service of process for any action, suit or proceeding brought against it in any such court with respect to any dispute relating to the determination of validity, enforceability or infringement of a Party’s Patent Rights or Trademarks.

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15.6Expert Determination of Disputes regarding Characterisation of Intellectual Property

If the Parties are unable to resolve a Dispute relating to the characterisation of any Information, Materials or Patent Rights as ImClone Core Patent Rights, UCB Core Patent Rights, Joint Know-How and Joint Patent Rights, the Parties shall upon written request by either Party to the other Party, promptly negotiate in good faith to appoint a mutually acceptable disinterested, conflict-free individual not affiliated with either Party, with relevant experience necessary to resolve such dispute (an Expert).  If the Parties are not able to agree within [***]   [Confidential Treatment Required] after the receipt by a Party of the written request in the immediately preceding sentence, the [***]   [CONFIDENTIAL TREATMENT REQUIRED], or such other similar entity as the Parties may agree, shall be responsible for selecting an Expert within [***]   [Confidential Treatment Required] of being approached by a Party.  The fees and costs of the Expert and the [***]   [CONFIDENTIAL TREATMENT REQUIRED] (or such other entity) shall be [***]   [Confidential Treatment Required].  Within [***]   [Confidential Treatment Required] after the designation of the Expert, the Parties shall each simultaneously submit to the Expert and one another a written statement of their respective positions on such disagreement.  Each Party shall have [***]   [Confidential Treatment Required] from receipt of the other Party’s submission to submit a written response thereto, which shall include any scientific and technical information in support thereof.  The Expert shall have the right to meet with the Parties, either alone or together, as necessary to make a determination.  No later than [***]   [Confidential Treatment Required] after the designation of the Expert, the Expert shall make a determination by selecting the resolution [***]   [Confidential Treatment Required] and shall provide the Parties with a written statement setting forth the basis of the determination in connection therewith.  The decision of the Expert shall be final and conclusive, absent manifest error.

16.IMCLONE OPTION; COMPETING PRODUCTS

16.1[***]   [Confidential Treatment Required].

16.2The Parties acknowledge that ImClone (or one of its Affiliates) is currently conducting a development programme in respect of one or more Antibodies, including 1121B, any of which is or may be a Competing Product or otherwise competitive with an Antibody Product.  By the date (the Opt-Out Date) which is the earlier of (a) [***]   [Confidential Treatment Required] after the date of acceptance by the FDA for filing of the first Drug Approval Application in respect of any Antibody Product in the United States and (b) the fifth anniversary of the Effective Date, ImClone shall either:

(a)terminate this Agreement pursuant to Article 12.2, in which event, for the avoidance of doubt, ImClone and its Affiliates shall continue to have the right to develop, and, effective upon the date of such notice, the right to make, have made, use, sell, have sold, offer to sell, resell, import, export, distribute, otherwise transfer physical possession of or otherwise transfer title in or to or otherwise commercialise Competing Products, including 1121B, regardless of any applicable Transition Period and notwithstanding anything to the contrary in this Agreement; or

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(b)cease (and procure that all of its Affiliates cease) all Competing Activities, including in relation to 1121B, and undertake to UCB that, subject to Article 16.4, it shall not and shall procure that its Affiliates shall not thereafter engage in any Competing Activities.  If on or after the Opt-Out Date, ImClone or any of its Affiliates is engaged in any Competing Activities, including in respect of 1121B, UCB may, subject to Article 16.4, terminate this Agreement pursuant to Article 12.3.

16.3If, prior to the Opt-Out Date, ImClone provides UCB with a written (i) confirmation that ImClone and its Affiliates have ceased all Competing Activities; and (ii) undertaking that it will not (and will procure that all of its Affiliates will not) thereafter engage in any Competing Activities during the Term, then (and in any event on and after the Opt-Out Date), (x) to the extent that at that time UCB or its Affiliates are engaged in any Competing Activity, within [***]   [Confidential Treatment Required] of receipt of such notice (or such date), UCB and its Affiliates shall cease all Competing Activities, and (y) UCB shall, and does hereby, undertake to ImClone that it will not (and will procure that all of its Affiliates will not), subject to Article 16.4, thereafter engage in any Competing Activities during the Term.  If on or after the date that is [***]   [Confidential Treatment Required] after receipt of such notice, UCB or any of its Affiliates is engaged in Competing Activities, ImClone may, subject to Article 16.4, terminate this Agreement pursuant to Article 12.3.

16.4If either Party or any of its Affiliates (to the extent that such Affiliate remains an Affiliate of a Party (or its successor, if applicable) immediately after the effective date of such transaction) merges or consolidates with, is otherwise acquired by, or acquires, a Third Party or otherwise undergoes a similar transaction and if such Third Party (or any of its Affiliates) is as of the effective date of such transaction engaged, directly or indirectly, in a Competing Activity this Article 16.4 (and not Articles 16.2(b) and 16.3) shall apply.  The merging or consolidating Party (or its successor), or the acquired Party or its acquirer, as the case may be (including their Affiliates, as applicable), (collectively the Merging Party) shall, within [***]   [Confidential Treatment Required] after such date, notify the other Party whether it intends to: (x) cease permanently, or cause its acquirer or acquiree to cease permanently, all Competing Activities; (y) divest, or cause its acquirer or acquiree to divest, whether by licence or otherwise, the Competing Product; or (z) terminate this Agreement pursuant to Article 12.2.

(a)If the Merging Party either notifies such other Party in writing within such [***]   [Confidential Treatment Required] period that it intends to cease permanently, or cause its acquirer or acquiree to cease permanently, all conduct of the Competing Activities, the Merging Party shall (i) cease all Competing Activities as expeditiously as possible with due regard for patient safety and the rights of any subjects that are participants in any clinical studies or post-approval studies relating to the Competing Product and Applicable Law; and (ii) keep the other Party reasonably informed of its efforts and progress in effecting such cessation of activities until it is completed, and shall provide a written summary of such efforts each Calendar Quarter until completed.

(b)If the Merging Party notifies such other Party in writing within such [***]   [Confidential Treatment Required] period that it intends to divest such

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Competing Product, the Merging Party shall use all [***]   [Confidential Treatment Required] to effect such divestiture as quickly as possible and shall keep the other Party reasonably informed of its efforts and progress in effecting such divestiture until it is completed, and shall provide a written summary of such efforts each Calendar Quarter until completed.  If the Merging Party effects such divestiture by way of one or more sublicences, the Merging Party shall be entitled [***]   [Confidential Treatment Required].  In addition, the Merging Party shall have the right to take back rights to such Competing Product if the licensee materially breaches its obligations under its licence agreement with the Merging Party (in which event such Competing Product shall again become subject to the terms of this Article 16.4).

16.5Notwithstanding Articles 16.2, 16.3, and 16.4, the Parties shall be entitled to Develop [***]   [Confidential Treatment Required] any Competing Product up to and including [***]   [Confidential Treatment Required]the Party Developing such Competing Product (the Developing Party) shall provide to the other Party (the Non-Developing Party) (via the JDT) a complete Data Package for such Competing Product (to the extent such information is available to [***]   [Confidential Treatment Required] by the Developing Party).

(a)The Non-Developing Party shall have the right on written notice to the Developing Party (a CP Conversion Notice) within [***]   [Confidential Treatment Required] of receipt of such Data Package to convert such Competing Product into an Antibody Product (such conversion from a Competing Product to an Antibody Product, a CP Conversion).  In connection with the exercise of any such CP Conversion, the Non-Developing Party shall have the right, on written notice to the Developing Party, to request additional information.  Within [***]   [Confidential Treatment Required] of receipt of such request, the Developing Party shall provide the Non-Developing Party with a statement of the [***]   [Confidential Treatment Required] occurring immediately before the date of such request for additional information and any updates to the complete Data Package that are available[***]   [Confidential Treatment Required] by the Developing Party.  Within [***]   [Confidential Treatment Required] of receipt of such information, the Non-Continuing Party shall have the right to provide a CP Conversion Notice to the Developing Party to convert the applicable Competing Product into an Antibody Product, provided that if the Non-Developing Party fails to serve such CP Conversion Notice within such [***]   [Confidential Treatment Required]period, the Non-Developing Party’s CP Conversion right shall be deemed to have lapsed in respect of such Competing Product and the Non-Developing Party shall have no further right to convert such Competing Product into an Antibody Product.

(b)If the Non-Developing Party timely delivers a CP Conversion Notice, the Developing Party shall within [***]   [Confidential Treatment Required] of receipt of the CP Conversion Notice provide the Non-Developing Party with an updated statement of all of [***]   [Confidential Treatment Required].  Within [***]   [Confidential Treatment Required] of receipt of such updated statement, the Non-Developing Party shall [***]   [Confidential Treatment Required].  If [***]   [Confidential Treatment Required]

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(c)Upon [***]   [Confidential Treatment Required], such Competing Product shall be deemed to be converted into an Antibody Product for an Agreed Indication for all purposes under this Agreement, including with respect to Developmental Costs and Operating Profits and Losses, which shall be [***]   [Confidential Treatment Required].  If such conversion does not take place the provisions of Articles 16.2 and 16.3 shall apply and the Developing Party shall not engage in any Competing Activities in relation to such Competing Product, whether alone or with or through any Third Party.

16.6For the avoidance of doubt, ImClone and its Affiliates are not licensed to develop, make, have made, use, sell, have sold, offer to sell, resell, import, export, distribute, exploit, transfer physical possession of or otherwise transfer title in or to and shall not develop, make, have made, use, sell, have sold, offer to sell, resell, import, export, distribute, exploit, transfer physical possession of or otherwise transfer title in or to any UCB Patent Rights or UCB Know-How in relation to any Antibody Product other than an Antibody Product Developed, Manufactured or Commercialised pursuant to this Agreement.

16.7For the avoidance of doubt, UCB and its Affiliates are not licensed to develop, make, have made, use, sell, have sold, offer to sell, resell, import, export, distribute, exploit, transfer physical possession of or otherwise transfer title in or to and shall not develop, make, have made, use, sell, have sold, offer to sell, resell, import, export, distribute, exploit, transfer physical possession of or otherwise transfer title in or to any ImClone Patent Rights or ImClone Know-How in relation to any Antibody Product other than an Antibody Product Developed, Manufactured or Commercialised pursuant to this Agreement.

17.MISCELLANEOUS

17.1Amendments

This Agreement may not be modified or supplemented by any purchase order, change order, acknowledgement, order acceptance, standard terms of sale, invoice or the like.  Any amendment or modification to this Agreement shall be made in a writing expressly stated for such purpose and signed by an authorised officer of each Party; except that the Development Plan and Commercialisation Plan may be amended or updated as expressly permitted by this Agreement.

17.2Notices

All notices under this Agreement shall be in writing and shall be deemed given if delivered personally or by facsimile transmission (receipt verified), mailed by registered or certified mail (return receipt requested), postage prepaid, or sent by express courier service, to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice; provided that notices of a change of address shall be effective only upon receipt).

If to UCB, addressed to:	UCB, S.A.
	Allée de la Recherche,
	60 1070 Brussels
	Belgium

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	Attention:	General Counsel
	Telephone:	(32-2) 559.99.99
	Fax:	(32-2) 559.99.00
If to ImClone, addressed to:	ImClone Systems Incorporated
	180 Varick Street
	New York, NY 10014
	United States of America
	Attention:	General Counsel
	Telephone:	(212) 645-1405
	Fax:	(212) 645-2770

17.3Force Majeure

Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement to the extent such failure or delay is caused by or results from Force Majeure, provided, however, that the Party so affected shall use [***]   [Confidential Treatment Required] to avoid, remove or mitigate such causes of non-performance and shall continue performance with reasonable dispatch wherever such causes are removed.  Each Party shall provide the other Party with prompt written notice of any delay or failure to perform that occurs by reason of Force Majeure.  Such excuse shall be continued so long as the condition constituting Force Majeure continues.  The Parties shall mutually seek in good faith a resolution of the delay or failure to perform.

17.4Use of Names, Logos or Symbols

Except as otherwise expressly provided in this Agreement (including with respect to ImClone Company Marks and UCB Company Marks), neither Party shall use and no rights are granted to the Trademarks (including the names ImClone and UCB), domain names, physical likeness, employee names or owner symbols of the other Party for any purpose (including private or public securities placements) without the prior written consent of the other Party[***]   [Confidential Treatment Required].

17.5Governing Law

This Agreement, including any proceedings under Article 15, shall be governed by and construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction, other than Section 5-1401 of the New York General Obligations Law.  The Parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.

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17.6Performance by Affiliates

(a)Each of UCB and ImClone acknowledges that obligations under this Agreement may be performed on a subcontracting basis by their respective Affiliates.  Each of UCB and ImClone remains responsible for the acts and omissions in the performance of this Agreement of its Affiliates.  To the extent the Parties delegate responsibility to Affiliates, the Parties agree that such entities may not make decisions inconsistent with this Agreement.

(b)Each Party agrees that any information or material provided to it or its Affiliates by the other Party’s Affiliates or subcontractors shall be deemed to be Information or Materials provided by the other Party.

17.7Assignment

A Party’s rights and obligations under this Agreement may not be assigned or otherwise transferred by any Party without the consent of the other Party, [***]   [Confidential Treatment Required]; provided, however, that either UCB or ImClone may, without such consent, assign its rights and obligations under this Agreement:

(a)to any Affiliate, provided that such interest shall be retransferred to the relevant Party if such entity ceases to be an Affiliate of such Party, and provided further that the assigning Party shall remain responsible for the acts and omissions in the performance of this Agreement of its Affiliate; or

(b)in connection with a merger, consolidation or sale of substantially all of the business to which this Agreement relates to an unrelated Third Party of good financial standing.

Any assignment or other transfer in violation of this Article 17.7 shall be void ab initio.

17.8Subcontracting

The Parties acknowledge and agree that, notwithstanding anything to the contrary in this Agreement, elements of the work involved in Development, Manufacture and Commercialisation of Antibody Product may be subcontracted to a Third Party by the responsible Party and that the granting Party entering into such subcontract may, as part of such subcontract, grant to such Third Party a right to use ImClone Patent Rights, ImClone Know-How, ImClone Company Marks, UCB Patent Rights, UCB Know-How, UCB Company Marks and Product Trademarks, as applicable, only to the extent and only for so long as such use is necessary for such subcontractor to perform such tasks; provided, however, that the responsible Party shall not be relieved of its obligation under this Agreement and shall remain responsible and liable for the acts and omissions in the performance of such work by its subcontractors.

17.9No Strict Construction

This Agreement has in its entirety been prepared jointly by the Parties and not by one Party and the Parties agree that this Agreement should be construed accordingly (whether in whole or in part) and no rule of strict construction shall be applied against either Party.

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17.10Interpretation and Schedules

(a)The captions or headings of the Articles or other subdivisions of the Articles are inserted only as a matter of convenience or for reference and shall have no effect on the meaning of the provisions of this Agreement.

(b)Unless otherwise specified references in this Agreement:

(i)to any Article or Schedule means references to such Article or Schedule of this Agreement;

(ii)to any agreement, instrument or other document in this Agreement refer to such agreement, instrument or other document as originally executed or, if subsequently varied, replaced or supplemented from time to time, as so varied, replaced or supplemented and in effect at the relevant time of the reference to it; and

(iii)to any person includes a body corporate and an unincorporated association of persons.

(c)Any statute defined or referred to in this Agreement or in any agreement or instrument or other document that is referred to in this Agreement means such statute as from time to time amended, modified or supplemented, including by succession of comparable successor statutes and references to all attachments to it and instruments incorporated into any of them.  Subject to Article 17.7, references to an entity or person are also to its permitted successors and assigns.

(d)All Schedules annexed to this Agreement or referred to in this Agreement are incorporated into and made a part of this Agreement as if set out in full in this Agreement.  Any capitalised terms used in any Schedule but not otherwise defined in such Schedule, shall have the meaning as defined in this Agreement.  Any capitalised terms used in this Agreement but not otherwise defined in this Agreement, shall have the meaning as defined in Schedule 2.

(e)Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  Except where the context requires otherwise, the word “or” has the inclusive meaning represented by the phrase “and/or.”

(f)The provisions of this Article 17.10 shall apply unless the contrary intention appears.

17.11Severability

If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of either Party under this Agreement will not be materially and adversely affected thereby, (a) such provision shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance

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herefrom, and (d) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and [***]   [Confidential Treatment Required] acceptable to the Parties herein.  To the fullest extent permitted by Applicable Law, each Party hereby waives any provision of law that would render any provision prohibited or unenforceable in any respect.

17.12No Consequential Damages

NEITHER PARTY WILL BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS UNDER THIS AGREEMENT, OR FOR LOST PROFITS, ANTICIPATED PROFITS, LOST GOODWILL, LOST REVENUE, LOST PRODUCTION, LOST CONTRACTS OR LOST OPPORTUNITY, ARISING FROM OR RELATING TO THIS AGREEMENT, WHETHER DENOMINATED IN OR ARISING IN CONTRACT, TORT OR OTHERWISE REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.  NOTHING IN THIS ARTICLE 17.12 IS INTENDED TO LIMIT OR RESTRICT ANY PAYMENT OBLIGATION EXPLICITLY CONTAINED IN THIS AGREEMENT (INCLUDING THE INDEMNITIES SET OUT IN ARTICLE 14).

17.13Equitable Relief

Each Party acknowledges and agrees that the restrictions set forth in Article 11 and Article 17.4 are reasonable and necessary to protect the legitimate interests of the other Party and that such other Party would not have entered into this Agreement in the absence of such restrictions, and that any violation or threatened violation of any provision of such Articles will result in irreparable injury to such other Party.  Each Party also acknowledges and agrees that in the event of a violation or threatened violation of any provisions of Article 11 and Article 17.4 the other Party shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving irreparable injury or actual damages and without the necessity of having to post a bond, as well as to an equitable accounting of all earnings, profits and other benefits arising from any such violation.  The rights provided in the immediately preceding sentence shall be cumulative and in addition to any other rights or remedies that may be available to such other Party.  Nothing in this Article 17.13 is intended, or should be construed, to limit such other Party’s right to preliminary and permanent injunctive relief or any other remedy for breach of any other provision of this Agreement.

17.14Change Of Control

A Party subject to a Change of Control (the Acquired Party) shall provide written notice to the other Party (the Non-Acquired Party), where possible, at least [***]   [Confidential Treatment Required] prior to the Change of Control or, where not possible, as soon as the impending Change of Control can be disclosed to the Non-Acquired Party.  Within [***]   [Confidential Treatment Required] of the receipt of a written notice pursuant to this Article 17.14, the Chief Executive Officer of each Party shall meet to discuss the impact of any proposed Change of Control upon the collaboration and the commercial value of any Antibody Product for an Agreed

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Indication and to discuss the possible nature of the relationship with the combined entity.

17.15General Provisions

(a)The representations, warranties, covenants and agreements contained in this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and a person who is not a Party to this Agreement may not enforce any of its terms.

(b)A waiver (whether express or implied) by one of the Parties of any of the provisions of this Agreement or of any breach by or default of the other Party in performing any of those provisions must be in writing executed by a responsible officer of the Party providing the waiver and expressly waiving such provisions or breach or default by reference to this Agreement, and any waiver shall not constitute a continuing waiver, and that waiver shall not prevent the waiving Party from subsequently enforcing any of the provisions of this Agreement not waived or from acting on any subsequent breach by or default of the other Party under any of the provisions of this Agreement.

(c)Each Party undertakes to execute all documents and perform all acts that may be [***]   [Confidential Treatment Required] to give full effect to this Agreement.

(d)Each Party shall pay its costs and expenses incurred by it in connection with negotiation and execution of this Agreement.

(e)It is expressly agreed that for all purposes:

(i)this Agreement or any portion of this Agreement shall not be considered to be a partnership agreement; and

(ii)the relationship between the two Parties shall not constitute an employee-employer, partnership, joint venture, agency or similar business relationship between the Parties.  Neither UCB nor ImClone shall have the authority to make any statements, representations, warranties, guarantees or commitments (express or implied) of any kind or to take any action which shall bind the other Party to a Third Party, without the prior written consent of the other Party to do so.  Each Party shall use its own discretion with respect to, and shall have complete and authoritative control over its employees and the methods and means by which it performs, its activities under this Agreement (including the management of permitted subcontractors).

(f)This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

17.16Whole Agreement

This Agreement and the Schedules referred to in this Agreement constitute the entire agreement between the Parties with respect to the subject matter of this Agreement,

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and supersede all previous understandings, arrangements and agreements with respect to the subject matter of this Agreement, whether written or oral.  Each Party acknowledges that in entering into this Agreement it has not relied on any representation, warranty, collateral contract or other assurance (except those expressly set out in this Agreement together with the Schedules) made by or on behalf of any other Party before the signature of this Agreement.  Each Party waives all rights and remedies which, but for this Article 17.16, might otherwise be available to it in respect of any such representation, warranty, collateral contract or other assurance.

17.17HSR Filing

(a)To the extent necessary at any time during the term of this Agreement, each of UCB and ImClone will promptly file with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice, any HSR Filing required of it in the reasonable opinion of both Parties under the HSR Act with respect to the transactions contemplated hereby.  The Parties will co-operate with one another to assess the necessity of any such HSR Filing and, to the extent necessary, co-operate with one another in the preparation and management of any such HSR Filing and the outcome thereof.  Each Party will be responsible for its own costs, expenses, and filing fees (as an acquiring person) associated with any HSR Filing.

(b)In respect of any HSR Filing, each of UCB and ImClone will use its [***]   [Confidential Treatment Required] to address any concern on the part of any court or government authority regarding the legality of the proposed transaction, including co-operating in good faith with any government investigation and the prompt production of documents and information demanded by any second request for documents and of witnesses if requested.

IN WITNESS WHEREOF, the duly authorised representatives of the Parties have executed this Agreement as of the date first set out above.

UCB S.A.		IMCLONE SYSTEMS INCORPORATED
By:	ROCH DOLIVEUX	By:	MICHAEL HOWERTON
Name:	ROCH DOLIVEUX	Name:	MICHAEL HOWERTON
Title:	CHAIRMAN OF THE EXECUTIVE COMMITTEE	Title:	CHIEF FINANCIAL OFFICER
By:	ROBERT J. TRAINOR
Name:	ROBERT J. TRAINOR
Title:	SENIOR VICE PRESIDENT AND GENERAL COUNSEL

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SCHEDULE 1

PATENT RIGHTS AND TRADEMARKS

Schedule 1 Part 1: UCB In-Licences

1[***]   [Confidential Treatment Required]

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Schedule 1 Part 2: ImClone In-Licences

1[***]   [Confidential Treatment Required]

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Schedule 1 Part 3: UCB Patent Rights and UCB Company Marks

UCB CORE PATENT RIGHTS

[***]   [Confidential Treatment Required]

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UCB PATENT RIGHTS

[***]   [Confidential Treatment Required]

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[***]   [Confidential Treatment Required]

129

[***]   [Confidential Treatment Required]

130

[***]   [Confidential Treatment Required]

131

[***]   [Confidential Treatment Required]

132

[***]   [Confidential Treatment Required]

133

[***]   [Confidential Treatment Required]

134

[***]   [Confidential Treatment Required]

135

[***]   [Confidential Treatment Required]

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UCB COMPANY MARKS

The UCB Company Marks are the word mark “UCB” and the corporate logo set out below.

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Schedule 1 Part 4: ImClone Patent Rights and ImClone Company Marks

IMCLONE CORE PATENT RIGHTS

[***]   [Confidential Treatment Required]

[***]   [Confidential Treatment Required]

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IMCLONE PATENT RIGHTS

[***]   [Confidential Treatment Required]

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IMCLONE COMPANY MARKS

The ImClone Company Marks are the word mark “IMCLONE SYSTEMS” and the corporate logo set out below.

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SCHEDULE 2

FINANCIAL PLANNING, ACCOUNTING AND REPORTING

[***]   [Confidential Treatment Required]

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SCHEDULE 3

OUTLINE FOR THE DEVELOPMENT PLAN

[***]   [Confidential Treatment Required]

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SCHEDULE 4

EXISTING SUPPLY AGREEMENTS

[***]   [Confidential Treatment Required]

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Daniel S. Lynch, Chief Executive Officer of ImClone Systems Incorporated, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 of ImClone Systems Incorporated;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ DANIEL S. LYNCH
	Daniel S. Lynch
	Chief Executive Officer
Date: November 8, 2005

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Michael J. Howerton, Chief Financial Officer of ImClone Systems Incorporated, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 of ImClone Systems Incorporated;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ MICHAEL J. HOWERTON
	Michael J. Howerton
	Chief Financial Officer
Date: November 8, 2005

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of ImClone Systems Incorporated (the “Company”) for the quarter ended September 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Daniel S. Lynch, Chief Executive Officer of the Company, and Michael J. Howerton, Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ DANIEL S. LYNCH
	Daniel S. Lynch
	Chief Executive Officer
November 8, 2005
	/s/ MICHAEL J. HOWERTON
	Michael J. Howerton
	Chief Financial Officer
November 8, 2005

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.