UPDATE 1-ImClone 2nd-quarter profit falls on costs

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NEW YORK, July 24 (Reuters) - ImClone Systems Inc (IMCL.O: Quote, Profile, Research, Stock Buzz) reported a lower second-quarter profit on Thursday as higher research and development costs and other expenses offset higher sales of its Erbitux cancer drug.

The New York-based biotechnology company said net profit dropped to $25.3 million, or 29 cents a share, from $31.9 million, or 36 cents per share, a year before.

Excluding special items, such as a write-down of investments of $1.8 million related to the decline in value of two auction rate securities investments, ImClone had adjusted earnings of 31 cents per share. That matched analysts' average expectations, according to Reuters Estimates.

Revenue for the quarter rose nearly 11 percent to $166.5 million, driven by Erbitux, which had global net sales of $423.3 million, a 33 percent jump from the year-ago quarter.

ImClone co-markets Erbitux with Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research, Stock Buzz) in the United States

But research and development costs rose 17 percent to $55.9 million as ImClone works toward becoming more than a one-product company.

Selling, general and administrative expense of $22.5 million was up 15 percent and royalty expense jumped 28 percent to $24.3 million.

"We believe we are making the appropriate investments to fuel our growth in the years to come," Chief Financial Officer Ken Zuerblis said of the increased expenses in a statement. (Reporting by Bill Berkrot, editing by Gerald E. McCormick)