ImClone

Fund sues to block Lilly-ImClone match

Tracy Staton — Tue, 28 Oct 2008 10:15:01 -0400

Just when we thought the ImClone Systems buyout drama was over, shareholders are mounting their own major production. A pension fund, the State-Boston Retirement System, has sued putative buyer Eli Lilly, along with ImClone and its directors, claiming that the biotech's board didn't live up to its fiduciary duty. And the suit is pursuing class-action status to get other shareholders in on the fight.

The suit lambastes the $70-a-share Lilly/ImClone deal as "the result of a hopelessly flawed process" and claims that ImClone's board "failed to provide ImClone's shareholders with material information to make an informed decision as to whether to tender their shares," the companies disclosed in SEC filings. Both Lilly and ImClone say the suit is "without merit;" Lilly intends to "vigorously defend" its deal.

You'll recall that ImClone's Erbitux partner Bristol-Myers Squibb started off the bidding with a $60-per-share offer, which it eventually raised to $62. But ImClone Chairman Carl Icahn swept in with Lilly's $70 bid, Bristol bowed out, and the deal appeared to be done. Does the pension fund expect to get more than $70? We'll keep you posted.

- read the Forbes story
- check out the Wall Street Journal Health Blog post

Lilly CEO: It's my job to take risks

Christe Bruderlin-Nelson — Wed, 15 Oct 2008 11:12:29 -0400

Eli Lilly might be taking some major financial gambles, but John Lechleiter (photo), who has been the CEO of Eli Lilly for just a half year, says risky deals are par for the course. "This is what we do every day," Lechleiter told the Indy Star. "We place risky bets on our pipeline. This is what our shareholders expect us to do."

According to Lechleiter, a bigger risk would be to do nothing as Lilly's patents begin to expire on its blockbusters and, as a result, the company loses revenue. The ImClone deal, says Lechleiter, is a strategic move to increase Lilly's share in the oncology market.

However, some analysts say Lilly's decision to spend $6.5 billion on ImClone could present the company with some fiscal challenges, especially in the light of potential revenue drops when major sellers such as Zyprexa and Cymbalta go off patent in the next few years. The company will likely have to borrow billions of dollars to cover the purchase.

Investors apparently agree the acquisition is risky, as Lilly stock dropped by 24 percent in the days following the acquisition announcement.

- read the full story at the Indy Star

Bristol to get $1B in ImClone deal

Tracy Staton — Tue, 07 Oct 2008 10:13:50 -0400

Carl Icahn may have won the ImClone war, but Bristol-Myers Squibb counts itself among the victors, too. Though Bristol won't get control of ImClone, it will rake in about $1 billion in cash for its 17 percent stake when Eli Lilly forks over the $70 a share buyout price. And Bristol still boasts a share of the cancer drug Erbitux; it will just work with Eli Lilly on marketing the drug. (Ironically, working with Lilly won't be unfamiliar to Bristol CEO Jim Cornelius, because he spent years at the company.)

In fact, Bristol's statement in response to losing ImClone to Eli Lilly was quite upbeat, full of phrases like "pleased," "proud" and "looking ahead." Bristol even seemed to take a share of the credit for bringing ImClone and Lilly together; after all, if BMS hadn't decided to try to buy ImClone, the company might not have been in play.

Bristol's teeth didn't show until the statement's final phrase: "to which Bristol-Myers Squibb holds long-term marketing rights." Those words referred to ImClone's experimental compound IMC-11F8, a potential follow-up/competitor to Erbitux. ImClone appears to dispute those rights; Bristol, not surprisingly, stolidly stands behind its claim. Lilly CEO John Lechleiter (photo) was noncommittal: "We feel good where we are" with the experimental med, he said during a conference call about the deal. And he promised that Lilly and Bristol would hash over the subject soon.

- read Bristol's release
- see the post at the Wall Street Journal Health Blog
- check out the Forbes article

Lilly nabs ImClone in $6.5B deal

Tracy Staton — Mon, 06 Oct 2008 10:05:27 -0400

It's official: Eli Lilly is the highest bidder for ImClone Systems. The drugmaker has agreed to pay $6.5 billion cash for ImClone, outbidding Bristol-Myers Squibb by more than 10 percent. And the $70-a-share price represents a 50 percent premium to ImClone's closing price the day Bristol first announced its interest in a buyout.

Lilly is touting the two-company combo as a "global leader in oncology biopharmaceuticals." The deal amounts to "a very important step forward in addressing the challenges of patent expirations we will face early in the next decade," says Lilly CEO John Lechleiter (photo) in a statement.

The cancer drug ImClone is known for, of course, is Erbitux--a product that it markets in partnership with Bristol. ImClone also has a promising cancer drug candidate that's either a follow-up to or potential competitor for Erbitux, depending on who's talking. Bristol claims that it's a follow-up, which would mean that Bristol gets a piece of the pie. ImClone says no. We'll have to wait and see what Lilly says.

No word yet on how Bristol is reacting to the news that Lilly snatched its buyout target away. But we can bet ImClone Chairman Carl Icahn has a big "I told you so" ready for Bristol's Jim Cornelius.

- see the Lilly release
- read the story in the Star-Ledger

Lilly in 'advanced talks' to buy ImClone

Tracy Staton — Wed, 01 Oct 2008 16:33:40 -0400

Carl Icahn was telling the honest truth when he said a Big Pharma company had stepped up to bid for ImClone Systems. And the mystery bidder is...Eli Lilly. The Indianapolis-based drugmaker made a preliminary offer of $70 a share, subject to the due diligence that wrapped up over the weekend. And now Lilly is in "advanced talks" to buy ImClone for that very price, sources tell the Wall Street Journal.

ImClone, however, hasn't confirmed anything. The company released a statement saying a "large Pharma company has completed due diligence and made a proposal" but that "the company has requested that ImClone not divulge its name until negotiations are completed."

As you know, Bristol-Myers Squibb made a $60-a-share offer for ImClone, its partner on the blockbuster cancer med Erbitux. Icahn scorned that price, so Bristol came back with a $62 bid. At the time, CEO Jim Cornelius told Icahn that a $62 bid on the table is better than a $70 bid pending due diligence. Cornelius even threatened to mount a proxy fight for board control and make its $62 offer into a hostile bid.

Now, though, Cornelius has to eat his words. Icahn wasn't bluffing. Though there's no deal yet between ImClone and Lilly, the two companies are in hot discussions, with Lilly facing a midnight deadline to make a firm offer.

What's next? If Lilly makes a formal $70 offer, then Bristol will have to put up or shut up. And there are still questions about ImClone's follow-up to Erbitux, an experimental drug likely to compete with the blockbuster treatment. Bristol claims a share of eventual revenues from that drug candidate; ImClone says no way. Presumably Lilly would want that issue resolved before taking over.

- see ImClone's release
- read the WSJ Health Blog item

Eli Lilly offers $70 a share for Imclone

Calisha Myers — Wed, 01 Oct 2008 16:32:13 -0400

ImClone had announced that its mystery bidder would be revealed by Wednesday night at 11:59, and now the news is out. Pharma giant Eli Lilly has bid $6.1 billion, at $70 a share, according to a report in the Wall Street Journal. Insiders say Pfizer was also among BMS's competition, although the details of its bid have not be revealed. Eli Lilly has just before midnight tonight to make a decision.

Both Eli Lilly and Pfizer have been vocal about their desire to beef up their biotech pipelines. In a recent speech, Lilly chairman and CEO John Lechleiter (photo) reiterated the company's focus on biologics, saying that biotech drugs would be Lilly's preferred choice from now on. And just yesterday Pfizer announced an R&D revamp, which includes a greater focus on biologics.

- read this report for more

Pfizer, Lilly among possible ImClone suitors

Tracy Staton — Mon, 29 Sep 2008 10:04:57 -0400

ImClone announced today that it will release the name of its mystery suitor after the bidder's self-imposed deadline of 11:59 p.m. on Wednesday, October 1. You'll recall that ImClone announced a $70-a-share offer from a mystery pharma, after its Erbitux partner Bristol-Myers Squibb bid an "inadequate" $60. Last week, Bristol upped its bid to $62, but ImClone Chairman Carl Icahn pooh-poohed that price, saying he would be working with Mystery Date over the weekend on due diligence.

So just who is this Unidentified Bidding Object? Pfizer was one of the companies interested in buying ImClone, the Wall Street Journal reports. Another appears to be Eli Lilly. Whoever it is, we may know for sure on Wednesday: That's the bidder's self-imposed deadline for a final offer. Or we may never know. If the company decides not to make that final bid, it says it will withdraw, perhaps still unidentified.

- check out ImClone's release
- read the WSJ story

Will ImClone's mystery bidder please stand?

Tracy Staton — Fri, 26 Sep 2008 10:46:38 -0400

Bristol-Myers Squibb's sole board representative at partner-slash-takeover target ImClone Systems stepped down early this week, presumably to get out of the line of fire. Bristol won't comment, beyond saying that it has no immediate plans to fill the spot. But given that its bid for ImClone has gone hostile, John Celentano had to bow out; after all, he wouldn't be much welcome during board meetings. And if Bristol succeeds with shareholders, it will replace the whole board anyway.

Meanwhile, ImClone Chairman Carl Icahn's "mystery bidder" is supposedly wrapping up due diligence this weekend. Will that supposed $70-a-share bid--beating even Bristol's sweetened $62 offer by a mile--survive the spreadsheets? Will the bidder's identity be revealed? Or will the suitor vanish just as abruptly as it appeared? We'll have to wait and see.

- check out CNN Money's story
- read the article at In the Pipeline

ImClone rejects BMS's higher bid

Christe Bruderlin-Nelson — Wed, 24 Sep 2008 04:16:00 -0400

The only Bristol-Myers Squibb representative on the ImClone's board of directors, John Celentano, resigned in the wake of what many are now calling a hostile takeover attempt by Bristol-Myers.

But that isn't the biggest news of the day.

The big news is that Carl Icahn sent (yet another) snarky letter to James Cornelius at Bristol-Myers yesterday, essentially telling him that the company's latest offer--made yesterday--is ridiculous. And in true Icahn fashion, he didn't mince words.

The new offer was an increase of $2 per share over the original $60-per-share offer made in July, but does not come close to the secret offer Icahn claims to have in his back pocket for $70 per share. The supposed secret lover has until Sunday to complete its review of the biotech firm and seal the deal, said Icahn. "In light of these facts," he said in a letter to Cornelius, "your hostile tender of $62, at this time, seems absurd."

- check out Icahn's letter
- see the story at Forbes

BMS takes sweeter bid to ImClone investors

Tracy Staton — Tue, 23 Sep 2008 10:51:16 -0400

It's the week for sweetened buyout offers. Yesterday, Sanofi-Aventis upped its price for Czech generics maker Zentiva. Today, it's Bristol-Myers Squibb boosting its bid for Erbitux partner ImClone. Bristol now sets its per-share price at $62, up from its previous bid of $60. Thanks in part to a 51-cent drop yesterday, the sweetened bid outdoes ImClone's current $59.40 stock price by more than $2. All in all, it's a $4.7 billion deal for the ImClone shares Bristol doesn't already own.

In increasing its offer, Bristol CEO Jim Cornelius wrote ImClone Chair Carl Icahn to acknowledge that the company considered its first bid to be "inadequate." Cornelius also pointed to roiled markets, saying that the "extraordinary" conditions make "an orderly and transparent process with a clearly delineated timeline" necessary for a deal. That might be a dig at Icahn's claim that he has a secret, $70-per-share buyer in the wings; Bristol's $62 bid, combined with that warning, seems to say that Cornelilus isn't convinced that such a high offer is for real.

Plus, ImClone's silence on Bristol's offer--and the identity of the mystery bidder--may compound the crazy market situation by making ImClone shareholders feel even more uncertain, "which could hurt the intrinsic value of ImClone's assets," Cornelius wrote. So, Bristol is taking its offer directly to shareholders. We'll see how Icahn--and those "uncertain" shareholders--respond now.

- check out the Bristol-Myers Squibb release
- read the Wall Street Journal story

Erbitux doesn't meet survival time goal

Tracy Staton — Tue, 16 Sep 2008 10:46:05 -0400

Another skirmish in the ongoing cancer-drug competition between upstart Erbitux and heavyweight Avastin. ImClone Systems announced today that colon cancer patients on Erbitux survived 24.9 months, compared with 21 months on chemo alone--provided that the patients lacked the K-Ras gene mutation. Those with the mutated gene, however, survived just 19.9 months on Erbitux versus 18.6 on chemo alone. And in both cases, the difference could have been due to chance. It was statistically insignificant.

Roche shot back, saying that Avastin extends patients' lives regardless of their K-Ras status. Quoting previous studies, the company said Avastin patients survived more than two years if they didn't have the mutation, and a had statistically significant gain in survival whether mutated or not.

Roche needn't have bothered. The media quickly picked up ImClone's release, highlighting the fact that Erbitux didn't meet its survival time endpoint. The word "failed" was used. We'll see how ImClone responds.

- check out the ImClone announcement
- see the Roche release
- read the CNN Money story

BMS to ImClone: We just might walk

Tracy Staton — Tue, 16 Sep 2008 09:53:44 -0400

"You should never fall in love with an asset." Those are the words of Bristol-Myers Squibb's CFO, who assured investors today that his company won't be despondent if ImClone Systems ultimately rejects its buyout offer.

Part of the high-stakes bluffing game--part poker, part chicken--that these takeover bids often become? Maybe. Or maybe Jean-Marc Huet does, as he said, "understand the business very well." Maybe he knows enough about ImClone to see that a deal wouldn't be a good deal under all circumstances. "[T]here are situations in which we are willing to walk away," he said.

You'll recall that Bristol offered $60 a share for its partner-in-Erbitux, and ImClone promptly called that price inadequate. Just last week, Chairman Carl Icahn announced that he had a major pharma company just offstage, $70-per-share offer in hand. Since then, Icahn and Bristol CEO Jim Cornelius have been sparring over buyout protocol and, more importantly, Bristol's rights to an ImClone follow-up to Erbitux.

This take-it-or-leave-it tale is the latest salvo--but certainly not the last. Stay tuned.

- see the Star-Ledger story
- check out the item at the WSJ Health Blog

BMS, ImClone chiefs spar over bids

Tracy Staton — Fri, 12 Sep 2008 10:36:17 -0400

Bidding war or war of words? Bristol-Myers Squibb CEO Jim Cornelius and ImClone Chair Carl Icahn have been trading jabs over the last 24 hours, with Cornelius scolding Icahn for publicizing the so-called mystery suitor and Icahn chastising Cornelius in return.

First, Cornelius told Icahn that Bristol's $60-a-share bid for ImClone still stands. Plus, it's cash on the table. The competing suitor's supposed $70-a-share offer is contingent on due diligence. So isn't a bird in the hand worth a slightly larger one that may never make it out of the bush? There's no hint whether Bristol might consider upping its bid--but no assertion that it won't, either.

Plus, Cornelius left no room for doubt that Bristol will claim a share of the follow-up cancer drug in ImClone's pipeline. Already ImClone's partner on Erbitux, Bristol says its agreement on that drug covers the new one, too.

Now, Icahn has fired back, saying that ImClone doesn't agree that Bristol has a "clear" right to that follow-up drug, IMC-11F8. And, he says, if you want to make another offer that "you believe we would not find inadequate," feel free. So the ball's back in Bristol's court--for now.

- check out Cornelius's letter
- read Icahn's response
- read the Wall Street Journal Health Blog item
- check out the story in the WSJ
- see the Pharmalot post

Pharma finds deals aren't so easy

Tracy Staton — Thu, 11 Sep 2008 10:28:54 -0400

While the market speculates just which "major pharma firm" submitted that $70-a-share mystery bid for ImClone, analysts are saying that Bristol-Myers Squibb should just up its offer to $70 from $60 and be done with it. "This is a good strategic and financial deal for BMS at that price," Deutsche Bank's Barbara Ryan wrote to clients. After all, the rival offer is subject to due diligence, and as ImClone's partner on Erbitux, BMS already has a lot of the inside skinny on the company.

Meanwhile, King Pharmaceuticals is taking its bid for Alpharma to the shareholders. Spurned by its target's management, the Tennessee company is undeterred, saying it's making a sweetened $37-a-share offer to stockholders "to deliver significant value to them as expeditiously as possible," CEO Brian Markison said. At that price, King values Alpharma at $1.6 billion, a 12 percent increase over its initial offer of $33 per share. But it's just two cents more than Alpharma's market price this morning; in pre-market trading, the company's shares were up 3.5 percent to $36.98.

And just in case you were wondering why speculation that other Pharma-Biotech partnerships would turn into buyout deals hasn't come to fruition: In Vivo looked at 12 of those collaborations and found that two-thirds of them are governed by contracts that prohibit unsolicited buyout offers. For instance, Eli Lilly's deal with Amylin on Byetta includes a "standstill" proviso. But Biogen Idec could buy Elan, its Tysabri partner, if the mood struck.

- read Mike Huckman's take at Seeking Alpha
- see King's release
- check out In Vivo's partnership analysis
- see the Wall Street Journal story

ImClone in talks with secret suitor

Christe Bruderlin-Nelson — Wed, 10 Sep 2008 10:48:52 -0400

Carl Icahn, CEO at ImClone, is turning his nose up at its recent offer from Bristol-Myers Squibb and the company now officially is saying the $60 bucks a share that the huge pharma company offered for ImClone was "inadequate."

Icahn apparently has been having tête-à-tête talks with a secret pharma mistress.

The company today released a statement saying that the CEO of a large pharmaceutical company has been wooing the company and that Icahn has had several discussions with said (well, unsaid) CEO of said (unsaid) company, which is making a cash offer of $70 per share. This brings the offer price to about $6.1 billion...a nice increase over the Bristol-Myers offer of about a billion dollars less.

ImClone will give its hush-hush friend two weeks for due diligence, but not for financing. In the meantime, have fun betting on who the interested party might be. Merck? GlaxoSmithKline? Eli Lilly? Novartis? Pfizer? Stay tuned.

- here's the press release
- read more at the Street Insider

ImClone asks JPMorgan for deal advice

Tracy Staton — Fri, 15 Aug 2008 10:00:19 -0400

ImClone may have rejected Bristol-Myers Squibb's buyout advances so far, but now the company is hiring a financial adviser to help it study the offer--and analyze its own internal proposal to split itself into two businesses. ImClone tapped JPMorgan Chase as its financial helpmeet, to sift the details of Bristol's bid and compare it with the shareholder benefit of carving up the company, with one chunk devoted to pipeline and the other to Erbitux, its superstar cancer med.

Who, we wonder, is giving ImClone legal advice? As you know, there's been some back-and-forth about the rights to a potential Erbitux follow-up in ImClone's pipeline. Bristol says its Erbitux partnership with ImClone gives it a piece of the successor. ImClone says it's the candidate's sole owner. Seems to us that clearing up that little detail would be necessary for any kind of accurate number-crunching. But we're not lawyers (or number-crunchers).

- read the story in the New York Times

Did BMS bid to avoid ImClone dispute?

Tracy Staton — Mon, 11 Aug 2008 10:39:44 -0400

When Bristol-Myers Squibb announced its bid to buy its partner ImClone, a lot of people asked, Why now? ImClone's stock is a lot higher now than it was a couple of years ago. So if BMS didn't make an offer then, why would it pay more today? Apparently, the answer lies in the successor to the partnership's successful cancer med Erbitux--and in some contract language vague enough to give ImClone a claim to full rights to it.

Bristol says it's entitled to a piece of Erbitux the second, known as IMC-11F8. The companies' 2001 agreement stipulates that if this next-generation med was derived in any way from the original Erbitux, or if it's a competing product, BMS gets its share. But ImClone says Bristol's out of the picture (after saying it was in some time back, but you'll have to read the Wall Street Journal's story to get the details).

The disagreement could end up in a years-long slog through arbitration. Or BMS could buy ImClone and avoid all that, hence the $4.5 billion offer for the 83 percent of ImClone that Bristol doesn't already own. But BMS may have to raise its price. The market is still betting on a higher bid; ImClone stock closed Friday at almost $64.

- read the Wall Street Journal story
- see the Health Blog's post

Analysts: BMS lowballing ImClone

Tracy Staton — Tue, 05 Aug 2008 06:22:41 -0400

Who would you lay bets on: Carl Icahn or Jim Cornelius? The Bristol-Myers Squibb CEO has hit back at ImClone Chairman Icahn, with a contention that the company's $60-per-share offer is "full and fair." As for Icahn's insinuation that BMS somehow had inside info when formulating its bid, the company says no way. And Bristol says that, by its reading of its contract with ImClone, it does have rights to the experimental drug that Icahn said would compete with star performer Erbitux.

But war of words aside, BMS may very well end up having to pay more for its Erbitux partner. A Wall Street Journal survey of analysts found that they're valuing ImClone at anywhere from $62 a share to $73. And, the WSJ notes, historical premiums for oncology-company buyouts run more to 48 percent rather than the 30 percent Bristol is offering. At that historical premium, the price would be $65 to $70 a share. What do all those valuations have in common? They're all more than $60.

- see the Forbes story
- check out the post at the WSJ Health Blog
- read the CNN Money story

Icahn throws wrench into ImClone offer

Tracy Staton — Mon, 04 Aug 2008 10:50:20 -0400

Carl Icahn has spoken--and he's not satisfied. Bristol-Myers Squibb's $4.5 billion bid for ImClone, he says, is too low. And he's not just a big shareholder, he's ImClone's chairman.

The rest of the board weighed in, too, saying that though it's considering the offer, it also feels the $60-per-share price is too low. Investors appear to agree; they've been buying the shares like crazy, pushing up the price by almost 38 percent.

Complicating matters is the fact that ImClone's board had been chewing over a plan to split the company into two parts: One to manufacture Erbitux, the other to develop the meds in its pipeline. That plan, the board said, could boost shareholder value by itself.

And then there's Icahn saying he's "disturbed" by an unidentified company director who many have given BMS info about ImClone's pipeline and about the plans for the breakup. Apparently, there's an antibody in the pipeline that may have a "significant competitive effect" on Erbitux--and though Bristol has joint marketing rights on Erbitux, it may not have rights to that new prospect.

- see ImClone's release
- read the New York Times story
- check out the Wall Street Journal Health Blog item

BMS bid triggers deal talk

Tracy Staton — Fri, 01 Aug 2008 08:58:22 -0400

Have you noticed that one deal announcement inevitably leads to speculation of another? Well, yesterday's bombshell that Bristol-Myers Squibb had offered $60 a share for ImClone was no exception. Now, the talk goes a few ways: One, will the ImClone deal make BMS more attractive as a takeover target itself? Two, does this deal herald more pharma-biotech tie-ups in the near future?

The New York Times looks at the latter possibility, which at this point seems something of a no-brainer. Pharma's appetite for biotech deals is voracious right now, as drugmakers look to fill their anemic pipelines with promising meds and to make up future sales losses to generic competition. But the NYT names names--or at least names the companies that saw their stocks jump on the BMS announcement as investors bet that they might be bought out by their drugmaker partners. One example is Amylin Pharmaceuticals, which partnered with Eli Lilly on a diabetes med. According to the Wall Street Journal, Amgen options also saw a lot of action.

Then the WSJ Health Blog passes on an analyst assessment of Bristol's sellability post-ImClone buyout. Sanford Bernstein's Tim Anderson--who's pegged BMS as an acquisition target before--says that buying its Erbitux partner makes BMS "a more sellable company." It would not only have full Erbitux rights, but several experimental biotech meds, too. And BMS has been streamlining itself, which could make it more attractive to a buyer. Only problem is its size; at a $40 billion market cap, only a major player could swallow it.

- see the NYT story
- read the post at the Health Blog
- check out the WSJ article

ALSO: Wall Street has been in a tough spot these last few months, with the S&P 500 losing 9.5 percent over the course of June and July. But the biotech industry has emerged as a safe haven for investors in the face of poor performance in other sectors. Report