Acquisition By Eli Lilly
After Icos's experimental drugs failed in clinical trials, Eli Lilly was in a prime position to purchase the company. In October 2006, Eli Lilly announced that it had reached terms to acquire Icos for $2.1 billion, or $32 a share. After receiving pressure from large institutional shareholders as well as proxy advisory firm Institutional Shareholder Services (ISS) suggesting the deal should be rejected, Lilly increased its offer to $2.3 billion or $34 per share, a 6% increase. Again, resistance was voiced by some large shareholders, and ISS advised shareholders against accepting the new offer, which it still deemed insufficient. On January 25, 2007, at a special meeting, 77% of the shareholders voted in support of the acquisition. Eli Lilly closed the transaction to acquire Icos for $2.3 billion on January 29, 2007.
As a result of the acquisition, Eli Lilly gained complete ownership of Cialis, and promptly shut down Icos operations and laid off Icos personnel, except for 127 employees working at the biologics facility. Icos was the largest biotechnology company in the state of Washington at the time of the acquisition, and employed around 700 people. In December 2007, CMC Biopharmaceuticals A/S, a Copenhagen-based provider of contract biomanufacturing services, bought the Bothell biologics facility and retained the existing 127 employees.
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