Eli Lilly's $6.5 billion buyout of ImClone [1] was greeted with great fanfare on Monday--by all but a few analysts who questioned whether Lilly's $70-a-share offer was a bit too rich for the times. Doubters suggested that the unprecedentedly tight credit markets might hinder Lilly's ability to raise $2 billion to $3 billion in financing. "These aren't ordinary circumstances," one analyst pointed out Tuesday in the New York Times.
At the same time, Moody's and Standard & Poor's said they'd be looking at Lilly for a possible debt downgrade. And now, a top stock analyst has downgraded the company. Catherine Arnold of Credit Suisse now rates Lilly "neutral;" before the ImClone deal, the drugmaker rated an "outperform." Her concerns? Possible overpayment for ImClone, for one. For another, if Lilly forks over billions of cash--and assumes billions in debt--to wrap up the deal, it may have to forego future acquisitions.
- read the item [2] at the NYT's DealBook blog
Related Articles:
Eli Lilly out to redesign itself as a biotech [3]
Pharma investing: A good bet? [4]
Crunch paves way for pharma deals [5]
U.S. pharma in a blue Moody over bad credit [6]
Links:
[1] http://www.fiercepharma.com/story/lilly-nabs-imclone-6-5b-deal/2008-10-06
[2] http://dealbook.blogs.nytimes.com/2008/10/10/doubts-grow-over-lillys-imclone-deal/
[3] http://www.fiercebiotech.com/story/eli-lilly-out-redesign-itself-biotech/2008-09-25
[4] http://www.fiercepharma.com/story/pharma-investing-good-bet/2008-09-17
[5] http://www.fiercepharma.com/story/crunch-paves-way-pharma-deals/2008-10-09
[6] http://www.fiercepharma.com/story/u-s-pharma-blue-moody-over-bad-credit/2008-06-04