Biotech drugmaker ImClone Systems Inc. said Wednesday that it named financier Carl Icahn as its new chairman and reported its third-quarter earnings rose 85 percent-- results that far exceeded analysts' expectations.

The company said Joseph L. Fischer resigned as interim chief executive, a position he has held since the beginning of the year, and as a board member. Icahn had been seeking to remove him and three other directors from the board.

Fischer will be replaced by a newly formed Executive Committee of the Board, chaired by board member Alex Denner, who works for Icahn.

The three other directors Icahn sought to expel -- Dr. Vincent T. DeVita Jr. , John A. Fazio and William R. Miller -- will not run for re-election to the board at the next annual meeting in the first quarter of 2007 , the company said.

As a result, Icahn withdrew his proxy statement filed in September to remove half of ImClone's board. Now that three of the six directors Icahn sought to remove are gone, the board is primarily comprised of his allies. Icahn owns about 14 percent of the company.

ImClone's net income grew to $57.3 million, or 65 cents per share, from $31 million, or 35 cents per share, a year ago.

Revenue rose 42 percent to $150.7 million from $106.5 million last year. ImClone's only product, cancer drug Erbitux, is marketed with Bristol-Myers Squibb Co., which owns roughly 17 percent of the biotech company.

Royalty revenue from Bristol-Myers rose 69 percent to $78.6 million from $46.6 million last year. Bristol-Myers reported Erbitux sales of $174.6 million, compared with $107 million a year ago.

Analysts surveyed by Thomson Financial expected earnings per share of 45 cents per share on revenue of $163.3 million.

Banc of America analyst David Witzke, who rates the company a "buy," said in a research note that ImClone beat his forecast and the Street's because of significantly lower-than-expected research and development and selling, general and administrative costs.

ImClone's R&D costs fell 9 percent to $26.4 million, and SG&A expenses declined 19 percent to $16 million from last year.

Witzke said Fischer's resignation is a positive development because he had lost the confidence of investors and the internal management team.

However, Cowen & Co. analyst Eric Schmidt, who rates ImClone "Underperform," said in an interview that Icahn's rise to chairman may be "too little, too late."

"I agree in part with (Icahn) that the company was poorly run, but he may have missed his window of opportunity," Schmidt said.

In a note, the analyst called reported earnings per share "an essentially meaningless figure," and that the only number of significance was the $174.6 million in end-user Erbitux sales, compared with his estimate and analyst consensus of $185 million.

Schmidt said that ImClone seems poorly prepared to defend itself from Amgen Inc.'s competing drug Vectibix and that the shake up at ImClone will aid Amgen in its sales. Schmidt also rates Amgen as "Outperform."

Icahn appointment comes following the departure of former chairman David M. Kies and board member William W. Crouse resigned earlier this month amid squabbles between the company and Icahn.

In September, Icahn moved to remove half of Imclone's board because he said they have done a deplorable job running the company.

Among Icahn's criticisms was the failure of the board to lure a talented industry executive to ImClone's helm.

ImClone was at the center of the insider trading scandal that sent domestic diva Martha Stewart to prison for several months. The company's founder and former chairman, Sam Waksal, remains in prison.

Shares of ImClone rose 21 cents to $29.66 on the Nasdaq.