In the past few years, the non-science related shenanigans at ImClone Systems (NASDAQ:IMCL) have provided tons of entertainment for market watchers. Ever since the Martha Stewart imbroglio, I've followed the company's fall and rise from the ashes. ImClone is not quite the soap opera it once was in the days of Sam Waksal, and now behaves more like a regular biopharmaceutical company.

In that regard, ImClone announced their second-quarter earnings today. The company's lead product, Erbitux, which is used to treat both late-stage colorectal and head-and-neck cancers, experienced strong revenue growth this quarter. Thanks to growth in the treatment of head-and-neck cancer, Erbitux royalty revenues grew 79% to $75 million this quarter, compared to $42 million in the second quarter of 2005.

As this was the first full quarter in which the product was approved for head-and-neck cancer, this sort of large Erbitux royalty growth appears sustainable. That's because the nearest-term competitive threat to Erbitux is from Amgen's (NASDAQ:AMGN) panitumumab, which could be approved to treat colorectal cancer later this year.

Despite this threat, ImClone is trying to expand the use of Erbitux in other indications. Later in the year the company should release results of Erbitux use in non-small cell lung cancer, pancreatic cancer, and earlier stage colorectal cancer. Approval in these markets would provide additional avenues for growth.

ImClone is in the hot field for drug development. The market for monoclonal antibodies like Erbitux, or Genentech's (NYSE:DNA) Avastin and Herceptin, is growing like gangbusters. In 2005, U.S. sales of monoclonal antibodies grew 55% to over $4 billion, according to IMS Health; new products entered the market and existing monoclonal antibodies like Avastin received expanded usage in the various cancers.

Just being in the right field doesn't necessarily make ImClone a good investment, though. With a $3 billion market cap and net income for the quarter of $37 million ($0.42 a share), the company does appear to be close to fairly valued when you take into account the competitive, patent, and regulatory risks that it faces. Perhaps all these risks are why ImClone has been trying to sell itself for the past couple of months.

Biotech investing is fraught with risk. Just the specter of a superior product from the competition can cut a company's market share dramatically, as any investor in QLT (NASDAQ:QLTI) will tell you. Mainly due to the competitive risk that panitumumab poses to ImClone, I'd like more of a discount on ImClone's shares before I'd invest in the company, even with a potential buyout offer in the wings.

Fool contributor Brian Lawler does not own shares of ImClone. He welcomes your feedback. The Fool has a disclosure policy .