quant, i appreciate your thoughts, guess i should have stated lilly's new business strategy would be one of licensing versus purchasing...lilly having spent only 180 million in aquiring any companies in 09 and 10 trully reflects this versus what companies like nvs, mrk, pfe or a whole host of other large pharmas have done in the last 2 years.......
I believe the author is dead right. LLY needs to make some acquisitions, and INCY has to be one of their targets. But, I'm not sure they can afford INCY.
On the other hand, since NVS's research now has had over 1 year to take apart INCY's 424 in the lab and study it every which way from Sunday, since they ran the European trials for 424 in MF, NVS may have a view on INCY's JAK.
IF NVS'research team is very confident about 424's efficacy and safety profile (and since 050 is for all practical purposes similar to 424), I would expect NVS to buy out LLY and then get 70% of INCY's 050 for RA, which LLY owns as part of such a deal.
Additionally, I would expect there may some signifucant operational cost and maketing/distribution synergies for NVS from such a LLY acqusition.
It is unclear to me if such a deal would also mean an INCY buy. IF NVS buys LLY, I think INCY's leverage may weaken.
I hope LLY buys INCY before they themselves become dinner for NVS.
>>IF NVS'research team is very confident about 424's efficacy and safety profile (and since 050 is for all practical purposes similar to 424), I would expect NVS to buy out LLY and then get 70% of INCY's 050 for RA, which LLY owns as part of such a deal.<<
1. 050 has a completely different chemical structure than 424, so NVS is unlikely to know much about it.
2. RA is completely different than MF. NVS doesn't know anything more about the efficacy of 050 in RA than any other Big Pharma company - basically what Incyte has divulged publicly.
3. Lilly's partnership with Incyte, given that 050 is only now beginning Phase 2B, is responsible for only ~1-2% of Lilly's market cap (my estimate). The idea that NVS would buy Lilly to get that ~1-2% ... is kind of nutty. No offense intended.