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October 6, 2008
Imclone Really Does Get Bought
Posted by Derek
Well, it looks as if I'll finally be able to stop talking about Imclone: the word came out this morning that they've agreed to a $70/share deal with Lilly. Some thoughts on this:
1. I would still like to know how the uncertainty around the Erbitux follow-up antibody is supposed to be resolved. It's hard for me to make sense of this for Lilly unless they think that they can get substantial revenue from it, and Bristol-Myers Squibb presumably will disagree with their projected figures. None of the news stories so far have addressed this issue, and I presume that it's going to be a matter for negotiations (or for the courts, if it comes to that).
2. It seems that some analysts are seeing this deal as a sign of weakness in Lilly's pipeline, perhaps signaling that Effient (prasugrel) might be delayed more or labeled so restrictively that it has no chance of living up to expectations. We'll see how Lilly's stock performs today, and read the mood of its investors.
3. Well, Carl Icahn really did have something up his sleeve. Considering what Imclone was trading at before all this, he has plenty of reasons to be happy. But now will he turn his attention to Biogen again, and try to do the same thing with (or to) them?
4. I stand corrected! I had trouble believing that someone would come in at this price under these conditions, but, well, here they are. I should keep in mind that a fair number of mergers and acquisitions in this industry seem problematic (or downright senseless) to me, and adjust accordingly.
Comments (6)
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1. Hap on October 6, 2008 10:11 AM writes...
Wow. I hope that this is a case of "I don't know nearly as much about pharmaceutical management than I think/the people at Lilly know lots I don't" than "this deal is designed to enrich lawyers and management".
Permalink to Comment2. HelicalZz on October 6, 2008 1:49 PM writes...
I hope I never never ever find myself at a poker table across from Carl Icahn (not that there is any real danger of that happening).
Zz
Permalink to Comment3. Sili on October 6, 2008 3:02 PM writes...
I take it this is today's happy news from the market.
Permalink to Comment4. Hap on October 6, 2008 3:53 PM writes...
If I were Mr. Icahn (though my ability to do that is unlikely as in 1, above), I would ask for cash upfront to avoid Huntsman's situation.
Oh, and if this is the happy news, I think I need to consider short-term investments in alcohol and generic antidepressant suppliers. Irrational exuberance doesn't even appear to cover it.
Permalink to Comment5. Anonymous on October 6, 2008 4:45 PM writes...
Could this be a tax strategy, at least in part? Take a tax-break from shelling out for ImClone now while you have the Zyprexa revenue, and trade that current profit for future revenue from ImClone? Do I just not understand any of this?
Permalink to Comment6. Indy on October 7, 2008 8:55 AM writes...
As I posted previously,
I wonder how solid this move/deal is since BMS is claiming ownership on the next generation of Erbitux: IMC-11F8.
See
http://seekingalpha.com/article/95269-ownership-of-erbitux-follow-on-is-central-to-imclone-takeover
All lawyers involved are going to have a field trip here as motions/litigations must be in the works as we speak!
Any thoughts?
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