INSTANT VIEW: Lilly inks $6.5 billion ImClone deal

NEW YORK (Reuters) - ImClone Systems Inc agreed to be acquired by Eli Lilly and Co for about $6.5 billion, trumping a sweetened bid from Bristol-Myers Squibb Co.

The all-cash agreement values ImClone, which makes the cancer drug Erbitux, at $70 per share, a premium of 51 percent to ImClone's closing share price on July 30, the day before Bristol-Myers made an offer of $60 a share. ImClone's shares closed on Friday at $64.96.

The following is analyst reaction to the deal:

DAVID MOSKOWITZ, ANALYST, CARIS & CO

"I think it's a deal that is being done out of weakness. For me, it signifies that the delay on Effient is probably worse than initially thought."

"The fact that the acquisition will be dilutive through the 2012-2013 timeframe does suggest the price is pretty steep. It will all depend on what Lilly gets out of the pipeline."

"The two late-stage products are (Byetta LAR) and Effient, and those products don't appear to be progressing as well as they could. Therefore, Lilly needed to do add something to the product portfolio and the pipeline and this is the way they're going about it."

"This will not be enough to offset the loss of Zyprexa in 2011, and ultimately the loss of Cymbalta in 2013...There definitely are more strategic things that need to be done."

"An all-cash offer is going to significantly drain the company's cash position."

(Reporting by Lewis Krauskopf; compiled by Edward Tobin)