Lilly to acquire ImClone for $6b
Cancer treatment Erbitux is prize in 3-month drama
INDIANAPOLIS - Eli Lilly & Co.'s winning bid of more than $6 billion for cancer drug maker ImClone Systems means a billion-dollar payday for former rival bidder Bristol-Myers and vindication for corporate raider and ImClone chairman Carl Icahn.
Lilly said yesterday it would pay $70 per share for New York-based ImClone.
The acquisition, Lilly's largest ever, helps the Indianapolis drug maker prepare for looming patent expirations and builds "a true oncology powerhouse," Lilly chief executive John Lechleiter said.
The deal also brings to an end one of the more dramatic buyout sagas in recent history.
Lilly's bid topped two previous offers from Bristol-Myers Squibb Co., which partnered with ImClone to develop and market the blockbuster drug Erbitux.
In July, New York-based Bristol-Myers offered $60 per share for the 83 percent of ImClone it doesn't already own and later raised that bid to $62 per share.
But Bristol-Myers said yesterday it would stop the bidding there. CEO James Cornelius, a former Lilly executive and board member, said his company was pleased to have started a process that led to a "substantial increase" in ImClone's value.
Bristol-Myers stands to pocket about $1 billion for its 14 million ImClone shares, while still sharing in the revenue from Erbitux. The drug maker gets 61 percent of the North American revenue from Erbitux and splits sales three ways with ImClone and Merck & Co. in Japan.
Icahn, who became ImClone chairman two years ago, had called Bristol-Myers's $62 offer "absurd" last month and said the biotech company had another suitor, who he wouldn't name. Yesterday, he said Lilly's price "vindicated" his opposition to a 2006 buyout offer worth $36 per share.
Lilly will lose patent protection for its two top-selling drugs, the antipsychotic Zyprexa and the antidepressant Cymbalta, in 2011 and 2013, respectively. The company has been looking for ways to replace that revenue.