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 Monday it would pay $70 a share for New York-based ImClone. The acquisition, Lilly's largest ever, helps the Indianapolis drug maker prepare for patent expirations and builds "a true oncology powerhouse," said Lilly CEO John Lechleiter.
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The deal also brings to an end one of the more dramatic buyout sagas in recent history.
Lilly's bid topped two offers from Bristol-Myers Squibb Co., which had partnered with ImClone to develop and market the blockbuster drug Erbitux. In July, New York-based Bristol offered $60 a share for the 83 percent of ImClone it didn't already own, and it later raised that bid to $62 a share.
But Bristol-Myers said in a statement Monday 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 $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 it splits sales three ways with ImClone and Merck & Co. in Japan.
Lilly will lose patent protection for its two top-selling drugs, the anti-psychotic Zyprexa and the anti-depressant Cymbalta, in 2011 and 2013, respectively. The company has been looking for ways to replace that revenue.
It was drawn to ImClone because of Erbitux, which treats colorectal and head and neck cancers and could be approved for expanded uses, as well as by other drugs in development. ImClone has several drugs in mid- or late-stage clinical testing.
Lilly officials said the deal will be a financial success if income from Erbitux and any new uses of it is combined with one additional drug emerging from ImClone's pipeline.