After a fruitless six-month search for a buyer, ImClone Systems Inc. (NASDAQ:IMCL ) said on Thursday it will remain independent, sending its shares down 13 percent.

The New York-based biotechnology company said it is searching for a new chief executive, and it invited billionaire Carl Icahn -- who in May raised his stake in ImClone to more than 10 percent -- to join its board.

Shares of ImClone, which makes the cancer drug Erbitux, climbed as high as $43 in May from $34 in January as investors bet the company would be acquired. Some hoped ImClone's partner, Bristol-Myers Squibb Co. (NYSE:BMY ), would be the acquirer. Others bet on an outsider.

But cooler heads have been warning for some time that the list of potential suitors for ImClone, whose founder Samuel Waksal was sentenced in 2003 for securities fraud, would likely be small. Bristol-Myers owns roughly 20 percent of ImClone and receives the lion's share of Erbitux sales.

Moreover, there are several potential competitors to Erbitux, particularly a drug that is being developed by Amgen Inc. (NASDAQ:AMGN), and there are concerns that some patents protecting Erbitux could be in jeopardy.

"This was always going to be a tough sell," said Cory Kasimov, an analyst at Oppenheimer & Co. "What the company is back to now is trying to generate maximum value from Erbitux."

That won't necessarily be easy. Erbitux is approved to treat colorectal cancer and head and neck cancer, and the company is hoping to win approval for the drug in lung cancer and pancreatic cancer.

AMGEN COMPETITION

But some analysts believe Amgen's drug, panitumumab, will eventually become the treatment of choice for colorectal cancer in patients who have failed at least two other treatments, the market currently served by Erbitux.

Both drugs work in a similar fashion, but panitumumab has certain safety and convenience advantages, said Keith Haan, an analyst at Summer Street Research Partners who estimates panitumumab will ultimately gain more than 50 percent of the market currently held by Erbitux.

"Now investors are going to focus on ImClone's core business, which is Erbitux, and I think there are a lot of pitfalls going forward," he said.

ImClone, which hired investment bank Lazard Ltd. (NYSE:LAZ) in January to explore the potential sale or merger of the company, said it has restarted its search for a permanent chief executive officer to replace Joseph Fischer, who was named interim CEO in January.

Now, after a period of management turnover following the Waksal scandal -- which later drew in lifestyle guru Martha Stewart, who went to jail for conspiring to lie about selling ImClone stock -- it appears the company is turning to Icahn to help provide stability, analysts said.

However, his ability to help may be limited, they said.

"While he may be able to provide value creating ideas for the company we don't see how he could alleviate the competitive and litigation concerns currently facing ImClone," said Kasimov.

If Icahn were to be elected to the board it would be in addition to Alexander Denner, who joined the board in May 2006 following discussions with Icahn. ImClone said Denner also now works for Icahn.

The company said it plans to bring in another board member and has asked Icahn to recommend someone. Icahn was not immediately available for comment.

ImClone's shares fell $4.24, or 13 percent, to $28.12 in midday trading on Nasdaq.