Sometimes a Foolish writer goes out on a limb. And sometimes Carl Icahn is waiting with a chain saw.
It looks like Pfizer
What will Eli Lilly get for its $6.1 billion ($70 per share) bid if it pulls the string? Well, it will get a fraction of sales of ImClone's cancer drug Erbitux. Bristol-Myers Squibb
Possibly more important, though, is that Eli Lilly will get access to ImClone's five cancer drugs in clinical development. That could help justify the hefty price tag. However, ownership of one of them is not clean, and could determine whether the purchase turns out to be a good investment.
Bristol-Myers claims that it has U.S. marketing rights to IMC-11F8, the follow-up to Erbitux, as part of its Erbitux deal, and reminded Icahn that it would not agree to any modification of the deal. So Eli Lilly could be fighting Bristol-Myers if this heads to court, which I foresee.
Further complicating the issue, ImClone is fighting with its other marketing partner. Merck KGaA doesn't want to contribute to a royalty that ImClone agreed to pay last year in order to end a patent dispute. Yeda Research and Development Co. had sued both ImClone and Sanofi-Aventis
Given the intricacies of the deal, it's no wonder that they're still negotiating. Will Eli Lilly -- if that's indeed the mystery bidder -- go through with the deal? I have a hard time believing that ImClone is worth more to Eli Lilly than to Bristol-Myers. Perhaps Bristol-Myers was just low-balling ImClone at $62 per share.
Stay tuned, Fools. This one could get even more interesting.
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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is also a recommendation of the Inside Value newsletter. The Fool's disclosure policy is afraid of chain saws and paper shredders.