What's on Lilly's Prescription Pad?

Updated from 10:30 a.m. EDT

Who might be on Eli Lilly's(LLY Quote) drug company shopping list?

Fresh off the $6.5 billion purchase of ImClone Systems, Lilly CEO John Lechleiter says that he's hungry for more drug and biotech deals in the $5 billion to $15 billion range, according to a Wall Street Journal interview.

"We're going to look for opportunities to be a bit more diverse pharmaceutical company. We're not going to buy a medical-device company. We're not going to buy a diagnostic company," he told the Journal.

Lechleiter didn't reveal which companies he's looking at, but let's take some educated guesses.

Cephalon

How about Cephalon(CEPH Quote)? The specialty pharmaceutical company (market cap $4.7 billion) focuses on drugs that target the central nervous system, pain and cancer markets -- all disease areas where Lilly has expertise and existing products.

Cephalon's Provigil and Nuvigil, approved as treatments for excessive sleepiness due to a host of conditions, as well as the chronic pain medicine Fentora, could find a home in Lilly's neuroscience division alongside drugs like the ADHD medicine Strattera and antidepressant/nerve pain drug Cymbalta.

Cephalon's cancer drug business is focused primarily on blood-related cancers. While still small, this could be an attractive add-on to the drugs Lilly acquired through ImClone.

And Cephalon, with 2008 sales of just under $2 billion, is growing and profitable, which could help make any acquisition quickly accretive to Lilly.

Forest Laboratories

Forest Laboratories(FRX Quote) is another possibility. The specialty drug maker (market cap $6.6 billion) generated a majority of its $3.8 billion in 2008 revenue from the antidepressant Lexapro and the Alzheimer's disease drug Namenda. The latter drug might be most compelling to Lilly because it would complement the company's experimental Alzheimer's drug currently in phase III trials.