In what one analyst quickly termed an "act of desperation," Eli Lilly announced a deal to buy ImClone for $6.5 billion. That's a 51 percent premium over the share price for July 30, when Bristol-Myers offered $62 a share and fired up ImClone Chairman Carl Icahn to find a buyer willing to pay much, much more. Lilly's bid comes in at $70 a share.
"This is an act of desperation on the part of Eli Lilly," David Moskowitz, an analyst for Caris & Co., told Bloomberg. "Lilly will drain substantially all of its cash on the deal. Lilly is already bidding outside the range of what you think would be rational, but these companies are losing big products early next decade."
Lilly's blockbuster Zyprexa is losing patent protection in 2011. And as we've mentioned earlier, oncology drugs in the pipeline are becoming more and more attractive for the pharma set. Lilly already has 13 oncology drugs in its pipeline and now can add several more.
"By bringing together ImClone's and Lilly's marketed oncology products, pipelines, and biotech capabilities, we are taking a very important step forward in addressing the challenges of patent expirations we will face early in the next decade," says Lilly CEO John Lechleiter (photo). "We look forward to working with the ImClone team and their partners to ensure a smooth transition."
- check out the Eli Lilly and ImClone release
- read the article from the Indianapolis Star