Global Processing

ImClone accepts $6 billion-plus buyout bid from Lilly

October 6, 2008

According to the Associated Press, Eli Lilly & Co. has agreed to buy biotechnology company ImClone Systems Inc. for more than $6 billion in a deal that will expand Lilly''s cancer treatment pipeline a few years before several patent expirations hit the drug maker. ImClone had previously rejected two lower-priced takeover offers from Bristol-Myers Squibb Co. Lilly will pay $70 per share in cash for ImClone. Lilly will finance the deal through a combination of cash and up to $3 billion in debt. Both boards have approved and recommended that ImClone stockholders tender their shares. With about 87 million shares outstanding as of Aug. 1, that would amount to nearly $6.1 billion. Lilly officials said the ImClone addition helps it meet challenges posed by several looming patent expirations. The drug maker loses patent protection on its top-seller, the anti-psychotic Zyprexa, in 2011. Zyprexa contributed more than a quarter of the company''s $18.6 billion in sales last year. The company then will lose patent protection for its second- and third-best selling drugs, the antidepressant Cymbalta and Gemzar, in 2013.