Detractors question Lilly's ImClone buy

Eli Lilly's $6.5 billion buyout of ImClone 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 at the NYT's DealBook blog

Suggested Articles

Post-Tesaro buyout, don’t expect GlaxoSmithKline to spring for more commercial-stage oncology products anytime soon.

Already a fast-growing blockbuster, Novo Nordisk's injectable Ozempic won a major heart-helping FDA nod that could bode well for its oral sibling.

Bayer's new Vitrakvi for tumors with NTRK gene fusions is meeting skepticism in England and Germany, where cost watchdogs on Friday rejected it.