Summary
Eli Lilly & Company announced on March 5, 2007, that it has entered into a definitive agreement to acquire Hypnion, Inc., a privately held neuroscience company specializing in sleep disorder drug discovery. This strategic acquisition is expected to enhance Lilly's pipeline in a key therapeutic area. The transaction is slated to close by the end of the first quarter of 2007, pending customary closing conditions and antitrust review. Investors should note that Lilly anticipates a charge to earnings for acquired in-process research and development, estimated not to exceed $0.30 per share. However, the company expects the acquisition to have no other material impact on its 2007 earnings per share. The transaction will be financed through existing cash reserves, with no anticipated material effect on Lilly's liquidity or its strong debt ratings from Standard & Poor's (AA) and Moody's (Aa3).
Key Highlights
- 1Eli Lilly & Company to acquire Hypnion, Inc., a private neuroscience drug discovery company.
- 2Acquisition focuses on companies with expertise in sleep disorder treatments.
- 3Transaction expected to close by the end of Q1 2007, subject to regulatory and customary conditions.
- 4Lilly anticipates an in-process R&D charge not exceeding $0.30 per share.
- 5Acquisition is not expected to materially impact 2007 EPS beyond the R&D charge.
- 6The deal will be funded by existing cash, with no material impact on liquidity.
- 7Lilly's strong debt ratings (AA from S&P, Aa3 from Moody's) are expected to be maintained.