NEW YORK -- Eli Lilly & Co. bumped up its offer for ICOS Corp. by 6 percent, to $34 per share, or $2.3 billion yesterday in advance of a vote on the deal .
Lilly originally offered $32 per share in October, in a cash deal valued at $2.1 billion .
ICOS shareholders had been scheduled to vote on the offer today, but the vote has been postponed until Jan. 25.
The boards of both companies approved the revised deal.
ICOS shares gained, while Lilly shares sank $1.29 or 2.4 percent, to close at $53.23 on the New York Stock Exchange.
Analysts said Lilly stock slipped because of a combination of the revised pricing and negative articles in The New York Times about the company and its schizophrenia treatment Zyprexa.
Jason Napodano, an analyst with Zacks Independent Research, said he wasn't surprised that Lilly opted to up the ante because ICOS issued a bullish forecast on its prospects last week.
The Bothell, Wash.-based drug maker provided a preliminary earnings per share prediction of 17 to 22 cents for the fourth quarter and projected earnings of between 33 and 38 cents a share for 2007.
Analysts surveyed by Thomson Financial had expected ICOS to earn 9 cents per share in the final quarter of this year and 29 cents per share in 2007.
" [ICOS] really pushed Lilly to pay more with that announcement," Napodano said. "I think it [the deal] still makes sense."
Lilly opted to purchase ICOS to gain full control of Cialis, an erectile dysfunction drug it sells with the company.
Meanwhile, analysts didn't think the revelations in the Times articles would affect Lilly, which last year agreed to pay $700 million to settle roughly 10,500 lawsuits tied to Zyprexa's links to diabetes and other health problems.
There are another 7,600 cases pending.
On Sunday, the Times published an article that said Lilly downplayed the drug's ties to obesity and its tendency to raise blood sugar -- both of which are linked to diabetes.
Lilly said that no study showed Zyprexa causes diabetes and that the drug's label discusses possible weight gain.
Yesterday's Times carried an article that said Lilly was promoting Zyprexa for unapproved uses. Lilly objected to the story and denied its allegations.