Lilly's involvement is bad news for Bristol-Myers Squibb Co., which holds a 17% stake in
ImClone and has offered to buy the rest of the shares. The company had been bidding for the company since late July,
offering $60 a share, and then raising the offer in September to $62 per share or
$4.7 billion.
However, Bristol-Myers is also bad news for Lilly.
Lilly's bid -- or any rival bid for that matter -- is especially tricky because ImClone's only marketed
product is cancer fighter Erbitux, which is distributed by Bristol-Myers. Bristol-Myers holds 61% of the North American sales rights to Erbitux. Plus, Lilly would not only have to deal with Bristol-Myers, but also Merck KgA, which owns 90.0% of the Erbitux's international rights, according to Forbes. Additionally, Bristol-Myers claims it has distribution rights to ImClone's successor to Erbitux, called IMC-11F8, according to MarketWatch.
The
turf wars between pharmaceutical companies over products are bound to
get tougher as more patent protections expire, but ImClone's situation is especially complicated. Since Bristol's original
investment, ImClone's CEO Sam Waksal went to jail in an insider trading scandal along with Martha Stewart. Then, investor Icahn forced out the post-Waksal management team and took
control of the firm after a long strategic review failed to find a
buyer.
Upon the news Thursday
morning, ImClone's shares perked up to $65 a share, which will bring a smile to Icahn's face and perhaps a wince to Stewart's. - Maria Woehr
So Carl Icahn wasn't bluffing. Eli Lilly and Co. is apparently the mystery bidder for ImClone Systems Inc., and the company is in talks to acquire the New York-based biotech company for $6.1 billion, according to a report by The Wall Street Journal.
