Glaxo Rumored To Be Eying Eli Lilly

The current wave of merger mania is now being fired by rumors that UK drug company Glaxo is gearing up to put in a bid for the US company Eli Lilly. Rumor has it that a bid by Glaxo for Lilly would be even bigger than the one made by American Home Products for American Cyanamid (Marketletters passim and page 3). Although Glaxo is declining to make any comment, it cannot be denied that the company has a substantial cash pile and would have no trouble securing financing for such as move.

The acquisition would give Glaxo the PCS Health Systems business that Lilly acquired recently from McKesson; Glaxo had been interested in the acquisition but lost out to Lilly.

Also, Glaxo would stand to gain interesting products such as Lilly's antidepressant Prozac (fluoxetine), a range of antibiotics and Lilly's products for the treatment of diabetes. However, industry observers have commented that there would be some product overlap such as in the area of antiulcerants. Glaxo's Zantac (ranitidine) and Lilly's Axid (nizatidine) are direct competitors.