It has been revealed that Eli Lilly intends to lay off all of Icos Corp’s
700 employees if its $2.1 billion acquisition of the Bothell, Washington-based firm is approved by shareholders next week.
Icos spokeswoman Lacy Fitzpatrick told the Seattle Post-Intelligencer that
“essentially all employees have been notified…that if the transaction
closes, they would not stay on.” She added that members of staff are to
receive fair and competitive severance packages and can apply for jobs
with Lilly, noting that the elimination of jobs “is an outcome of the
transaction, and we are communicating the status to employees as specified in the merger agreement.”
When announcing plans to acquire Icos, Lilly chief executive Sidney Taurel
had said that a significant number of jobs would be eliminated, but the
scale of the cuts has surprised many people, particularly in Washington
state where over 500 people are employed.
Last month, state governor Christine Gregoire wrote to Mr Taurel asking
that Lilly work with her office to “ensure the best possible outcome.” The
letter stated that “Washington state has been a good home to Icos,
supportive of both the company and the industry. I extend this spirit of
cooperation to Eli Lilly as you implement this important business
decision.”
There is still a chance that shareholders will block the deal and some
have expressed the view that the Lilly bid undervalues Icos. However, the
company’s board of directors has already unanimously approved the sale.
The acquisition will give Eli Lilly full control over the erectile dysfunction treatment Cialis (tadalafil), which was launched in 2003 and claims over 25% of the US erectile dysfunction market.
