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news.Eli Lilly has signed a definitive merger agreement to acquire Washington-based Icos Corporation for a total of approximately $2.1 billion.
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Under the terms of the agreement, Lilly will acquire all of the outstanding shares of Icos common stock at a price of $32 per share.
The move by Lilly is an attempt to secure the erectile dysfunction treatment Cialis which Lilly and Icos have been co-developing and selling since 1998. Cialis generated worldwide sales of $456 million in the first six months of 2006, representing growth of 34% over the first half of 2005.
“We expect this acquisition will increase the company's earnings and earnings growth rate beginning in 2008 and, after a significant addition to sales in 2007, will modestly accelerate the company's sales growth rate thereafter,” said Sidney Taurel, Lilly chairman and CEO.
“The acquisition by Lilly, our close partner for nearly a decade, provides a compelling financial outcome for our shareholders,” stated Paul Clark, Icos CEO.
The board of directors of Icos voted unanimously to approve the merger agreement and to recommend that its shareholders approve the transaction. The transaction is expected to close in late 2006 or early 2007.
Upon the closing of the transaction, Lilly will incur a one-time charge to earnings for acquired in-process R&D, but the price of this charge is not yet known.