OCTOBER 1, 2008, 4:18 P.M. ET Eli Lilly in Talks to Acquire ImClone
By MATTHEW KARNITSCHNIG, SHIRLEY WANG and JEANNE
Eli Lilly and Co. is in advanced talks to acquire ImClone Systems Inc. for about $6.1 billion, according to people familiar with the matter.
The Indianapolis-based pharmaceutical maker is the unnamed "large pharma company" that ImClone Chairman Carl Icahn has said was prepared to acquire the company for about $70 a share, pending a review of its books, the people said.
On Monday, ImClone set a deadline of midnight Wednesday for a deal but it was unclear whether an agreement with Lilly would be reached by then.
A formal offer by Lilly could prompt Bristol-Myers Squibb Co. to increase its offer for the company. Bristol already owns about 17% of the biotech company and co-markets Erbitux, a lucrative cancer drug, with ImClone in the U.S. Bristol has already submitted an unsolicited $62-a-share bid of its own for ImClone.
Last week, Bristol-Myers said it was prepared to launch a hostile takeover of ImClone. Mr. Icahn derided Bristol's offer as "absurd" in the face of the mystery suitor's tentative bid. Mr. Icahn has said the rival deal wouldn't be subject to financing.
Monday, ImClone said that the unnamed suitor would make a decision to on its offer by end of the day Wednesday, and that ImClone would also reveal the suitor's name.
Like other drug makers, Lilly is having trouble getting new drugs through its drug development pipeline. Friday, the Food and Drug Administration for a second time delayed the decision on whether or not to approve Lilly's potential blockbuster heart drug, Prasugrel. The safety of its diabetes drug Byetta is currently being scrutinized by the FDA as well.
Erbitux, which is approved for colon and head and neck cancers and had $1.3 billion in sales in 2007, would be a major addition to Lilly's oncology business. The company currently has two cancer medicines on the market, Alimta, used to treat a form of lung cancer, and Gemzar, which is approved to treat several types, including lung, pancreatic, ovarian and metastatic breast cancer.
But Gemzar, which brought in $1.6 billion in 2007 worldwide sales, will lose patent protection in 2010. Lilly has only one cancer drug, enzastaurin, for non-Hodgkin's lymphoma, in late-stage clinical testing. Its other experimental cancer medicines are in early- or mid-stage development.
