Lilly CEO defends 'risky' ImClone buyout

Some analysts are questioning Eli Lilly buyout of ImClone. They're using words like "risky" and "desperate" to describe the $6.5 billion buyout, which will drain Lilly's cash reserves and force the company to take on debt in the midst of a credit crisis. Those concerns contributed to a 24 percent drop in Lilly's stock over the week that the company announced the deal.

But CEO John Lechleiter thinks heading up a Big Pharma company is all about taking risks, and that Lilly needed a bold move if it's going to overcome its current slump. Lilly hasn't launched a new human drug in three years and faces serious patent losses in 2011. The bigger risk, Lechleiter said, would be to do nothing at all. The buyout is part of Lilly's plan to increase its focus on oncology and biotechnology over the coming years. The company currently has only two cancer drugs, but with the ImClone buyout it gained the best-seller Erbitux along with ImClone's pipeline of five other cancer drugs.

Only time will tell if Lilly's risky move will pay off. "This is what we do every day," says Lechleiter. "We place risky bets on our pipeline. This is what our shareholders expect us to do."

- read the Indy Star article

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