Lilly to acquire ImClone Systems for $6.5 billion

Under the terms of the agreement, Lilly (through a wholly owned subsidiary) will acquire ImClone, followed by a merger of Lilly’s subsidiary with ImClone. Lilly is expected to commence the tender offer as soon as practicable.

The transaction is conditioned upon at least a majority of the outstanding ImClone shares being tendered, as well as clearance under the Hart-Scott-Rodino Antitrust Improvements Act, similar requirements outside the US, and other customary closing conditions. The transaction is not subject to any financing condition and is expected to close in either the fourth quarter of 2008 or the first quarter of 2009.

According to Lilly, the transaction will immediately enable the company to offer physicians and their patients a complementary portfolio of oncolytic agents and targeted therapies including Gemzar, Alimta and Erbitux and strengthen its oncology pipeline and biotech capabilities.

ImClone’s pipeline adds several molecules in mid- to late-stage clinical development targeting virtually all major solid tumor types. These targeted therapies, three of which have the potential to be in Phase III in 2009, add to Lilly’s own oncology pipeline of 13 compounds in clinical development, the company said.

In addition, ImClone’s development and commercial manufacturing facility will offer additional capacity for antibodies in development from both companies, said Lilly. The acquisition of ImClone is also expected to help Lilly meet the challenge posed by patent expirations on several currently marketed products in the middle of the next decade.