Updated from 10:30 a.m. EDTWho might be on Eli Lilly's ( LLY) 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.
I was going to put Shire ( SHPGY) (market cap $6.4 billion) on this list because the company's ADHD drug franchise, most notably Vyvanse and Daytrana, could be complementary to Lilly's neuroscience business, but Tuesday, Shire signed a marketing partnership for Vyvanse with GlaxoSmithKline ( GSK). That pretty much takes Shire out of the running.
The easiest acquisition Lilly could make is simply to buy out its diabetes partner Amylin Pharmaceuticals ( AMLN). The two companies co-market Byetta, a twice-a-day injectable drug for type II diabetes, and they are developing a longer-acting version that will be administered once weekly. I've done the hard work for Lilly; now all the drug company needs to do is spend some money.