Lilly reportedly in talks to buy ImClone.
"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, an analyst for Miller Tabak & Co. Cancer is one of the three main areas of research focus at Lilly, along with diabetes and neuroscience. Lilly 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.
If a takeover of ImClone is successful, it would mark the end of one of the most colorful corporate sagas in biotech history, complete with the jailing of founder Sam Waksal and his friend Martha Stewart, the style guru caught for lying to investigators over her suspicious trading in ImClone stock. Investors who have stayed along for the ride have seen the company's shares swing as low as $6 and as high as $87. They endured a protracted boardroom battle as billionaire investor Carl Icahn and his associates ousted the company's previous board and revived the company's tattered relationship with Bristol-Myers, which markets Erbitux in the United States. ImClone closed the week up $1.58, or 2%, at $64.96. Lilly fell $5.51, or 12%, to $41.31. Bristol-Myers fell 39 cents to $20.43.
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|Title Annotation:||TOP STORIES; ImClone Systems Inc. is in talks to be acquired by Eli Lilly and Co.|
|Date:||Oct 6, 2008|
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