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