BMS bid $60 a share and later revised this to $62 but has been blown out of the water by Lilly, which came in with a $70 bid. This is a 50 per cent premium on ImClone’s share price prior to news of a takeover.
James Cornelius, BMS’ CEO, has said the company will not be raising its bid, increasing the likelihood that Lilly will complete the takeover. If the acquisition goes through Lilly will bolster its oncology pipeline and biotech capabilities, two areas big pharma has targeted for future growth.
John Lechleiter, Lilly’s CEO, said: “This transaction will broaden our portfolio of marketed cancer therapies and boost Lilly's oncology pipeline with up to three promising targeted therapies in Phase III in 2009.
“By bringing together ImClone's and Lilly's marketed oncology products, pipelines, and biotech capabilities, we are taking a very important step forward in addressing the challenges of patent expirations we will face early in the next decade.”
In an interview with Bloomberg Lechleiter stated that he believed the acquisition would create an “oncology powerhouse”. In addition to the current portfolio ImClone has three molecules that may enter Phase III in 2009.
This puts them in a timeframe to soften the blow inflicted by the loss of patents for Zyprexa and Cymbalta, in 2011 and 2013 respectively.
One of these molecules, IMC11F8, is viewed as the successor to Erbitux (cetuximab) but there has been a dispute between ImClone and BMS over who owns the marketing rights.
Lechleiter has sought to clarify the situation, stating his belief the Lilly would have marketing rights to the drug outside the US and Canada, with BMS selling it in North America.
This viewpoint was echoed by Cornelius, with both CEOs saying the companies will be working closely together in the future.
Bad blood in protracted deal
The $70 a share valuation will please ImClone shareholders and in particular chairman of the board, Carl Icahn who had described BMS’ revised offer as “absurd”. This was part of a war of words, during which Icahn accused Cornelius of making statements that were “misleading”.
He went on to say: “If you wish to make your attorneys wealthier, I can show you more productive ways to do so. Or, if you simply want publicity, I can also help you in that regard without your having to make unnecessary expenditures.”