Eli Lilly in talks to buy ImClone: sources
Wed Oct 1, 2008 6:30pm EDT Email | Print | Share| Reprints | Single Page | Recommend (-) [-] Text [+]
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PHILADELPHIA (Reuters) - ImClone Systems Inc (IMCL.O: Quote, Profile, Research, Stock Buzz) is in talks to be acquired by Eli Lilly and Co (LLY.N: Quote, Profile, Research, Stock Buzz), sources familiar with the situation said on Wednesday, after ImClone had rebuffed a sweetened takeover offer from Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research, Stock Buzz).
Eli Lilly has offered to buy ImClone, which makes the cancer drug Erbitux, for $6.1 billion, or $70 a share, topping Bristol-Myers's offer of $62 per share for the 83 percent of ImClone it does not already own, The Wall Street Journal reported.
A $70 per share offer would mark a 7.1 percent premium over ImClone's closing stock price of $65.35 on Wednesday.
"The strategic fit isn't obvious, other than Lilly has a decent cancer franchise and is trying to get more into biotech," said Les Funtleyder, analyst for Miller Tabak & Co.
Cancer is one of the three main areas of research focus at Eli Lilly, along with diabetes and neuroscience. Eli Lilly's has a robust oncology business, but its largest product, Gemzar, loses patent protection in 2012.
Like other major pharmaceutical companies facing competition from generic drug rivals, Eli Lilly also faces the risk of slower growth due to the pending patent expiry of its schizophrenia drug Zyprexa.
"The fact that Erbitux is a biologic is good for the long term in terms of patent protection and Lilly is poised to lose a number of products to generic competition over the next several years, so I think they're doing what they need to do," said David Moskowitz, an analyst for Caris & Co.
ImClone and Bristol-Myers declined to comment. Eli Lilly could not be immediately reached for comment. Continued...
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