Following the saga of drug developer ImClone Systems (NASDAQ:IMCL) in 2006 has been almost as interesting as the Martha Stewart and former CEO Sam Waksal insider trading chronicles of 2001 and 2002. ImClone's fourth quarter saw Carl Icahn complete his takeover of the company's board of directors, following a short but vitriolic war of words with several former members of the board over his refusal to accept a takeover offer that could have netted ImClone's shareholders $36 per share in the unnamed acquiring company's stock.

Despite all of the boardroom maneuvers, ImClone has been performing OK, considering that its cancer treatment Erbitux is now facing more competition from Amgen's (NASDAQ:AMGN) Vectibix in the colorectal cancer setting. Revenue for the fourth quarter was up 33%, and net income came in at $47 million, or $0.53 a share. It should be noted, though, that this was the first time in two years that sales of Erbitux from marketing partner Bristol-Myers Squibb (NYSE:BMY) were down sequentially, going from sales of $175 million in the third quarter to $167 million in the fourth quarter.

To some degree, any gain by Vectibix is Erbitux's loss -- and vice versa. Sales of Vectibix got off to a speedy start by bringing in $39 million in its first quarter on the market, but Erbitux might have some more staying power against it. ImClone announced positive results of Erbitux use in first-line treatment of metastatic colon cancer, whereas interim Vectibix results in this setting, in combination with Avastin, have not been positive, with the caveats that the magnitude of the positive Erbitux results are not known until the study is presented at a medical conference in June, and that the Vectibix results are not final. As a treatment for colon cancer, both drugs are indicated to be used only as third-line treatments and have the same cancer-cell target. So whichever one can gain approval to treat the disease at an earlier stage will have a huge marketing advantage.

Of course, it's way too early to make any judgment on Icahn's rule at ImClone, and with Vectibix just completing its first quarter on the market, the competition is only going to get more intense. This year will be the real test for ImClone; 2007 will bring the announcements of trial results for both Erbitux and Vectibix, which will be going through multiple clinical trials for various uses. The results will ultimately determine each drug's presence in the market, so investors should parse over them very carefully when they come out.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.