Eli Lilly (NYSE: LLY) needs to make a deal. It's a familiar sentiment, and as the New York Times reports, the deal talk is intensifying--Lilly should sell; Lilly should buy.
Lilly stands to lose patent protection by 2014 on drugs that together account for 60 percent of its revenues. Sales are expected to drop significantly, and profits could fall by half, one pharma industry expert tells the NYT. "I think that sort of scenario generates M&A interest both on the buy side and the sell side," says Columbia University professor Frank Lichtenberg.
Some analysts agree. Seamus Fernandez of Leerink Swann Research tells investors that Lilly's recent loss in a patent suit involving the ADHD drug Strattera "reinforces our view that Lilly needs to move more aggressively on partnering and acquisition activity due to its challenged long-term outlook."
Problem is, Lilly has to compete with the rest of Big Pharma for strategic acquisitions. And as an M&A target, it would drag its pipeline troubles along with it, Lichtenberg tells the Times. Amid all the talk, Lilly is taking concrete steps to help itself--among them, a last-ditch lawsuit that seeks to keep Strattera generics off the market, at least temporarily.
ALSO: Eli Lilly spent $1.59 million in the second quarter lobbying the federal government on an array of trade issues and health care reforms, including pricing changes in Germany and Greece, and market access issues in Poland and Italy. Report