Eli Lilly swallows anti- colon cancer drug Erbitux and ImClone

ImClone's mystery suitor and now owner is Eli Lilly (LLY) . Their US$6.1Bn bid should have put the lid on Bristol Myer's (BMY) repeated attempts at a hostile takeover.

This deal values ImClone at US$70/share, a 51% premium over ImClone's closing price before Bristol made its first $60/share bid, and a 7% premium over Friday's closing price of $64.96.

Imclone have had a rocky ride , investors have seen shares fall as low as $6 and rise as high as $87 - and deals in them led to the jailing of founder Samuel Waksal and style guru / part time cook Martha Stewart tasting poridge in unfamiliar circumstances.

Carl Icahn, the billionaire investor and chairman of ImClone's board, who got control in 2006 will no doubt be pleased with the result and returns on his investment (14%) and has approved Lilly's offer for his shares.

Lilly is seeing big competition to their biggest drugs, including schizophrenia blockbuster Zyprexa and some observers see this is a move from weakness. As a cash deal it is going to drain the company's cash position.

Lilly say they will take a one-time charge (how big no one is saying or maybe knows) to its earnings. The company expects the transaction to be accretive to earnings on a cash basis in 2012 and on a net basis in 2013.

Lilly's ,aim anti-cancer drug, Gemzar®, loses patent protection in 2012 , it is commonly used to treat non-small cell lung cancer, pancreatic, bladder and breast cancer. .

Erbitux®, which is approved to treat colon cancer and head and neck cancer and whose cancer has spread to other parts of the body and whose tumor expresses a protein called an Epidermal Growth Factor Receptor (EGFR). , is ImClone's only marketed product, and generated $1.3 billion in sales last year.

The fate of ERBITUX® remains unclear as both Bristol and ImClone claim the rights - it is assumed the position must have been clarified.