Cancer drug lifts ImClone shares

US DOMESTIC style guru Martha Stewart, convicted of hampering an investigation into whether she had traded on inside information for ImClone stock, could have saved herself the trouble and made a tidy profit by sticking with her investment and not trying to cut her losses.

ImClone made a profit in the last quarter after its cancer drug, Erbitux, came to market.

The company's stock leapt 9% to almost $80 (£43.60). That's $20 above the level at which Stewart sold her holding in the company, allegedly based on information from founder Sam Waksal, on fears that the company was in trouble after the Food and Drug Administration ruled against Erbitux.

She sold a day before news of the FDA decision became public knowledge.

Waksal, who is serving a seven-year sentence for passing on advance warning of the FDA veto to members of his family, was luckier in one respect. He continues to own part of the company and is growing richer even as he serves out his time in jail.

Shortly after his illegal warnings, the FDA gave Erbitux the go-ahead, and ImClone began licensing the drug to its partners, Merck and Bristol-Myers Squibb. Most of the company's quarterly profit comes from $67.5m in license fees.

ImClone reported a net profit of $62.7m.