What was Lilly's rush on Loxo?

On Dec. 20, 2018, a bunch of Eli Lilly executives flew to Connecticut to meet with Loxo Oncology about a potential deal. And within 10 business days, the former had agreed to pay $8 billion for the latter, concluding a process that had no outside bidders and almost certainly ruined the holidays for a team of bankers.

Why so hasty? In an SEC filing posted yesterday, Loxo revealed that, at that Dec. 20 meeting, “representatives of Lilly stated Lilly’s interest in announcing the acquisition at the J.P. Morgan Healthcare Conference,” which began Jan. 7. Over the ensuing days, Lilly’s offer went from $230 to $235 per share, and eventually Lilly got its wish with a big splash on Day One of the conference.

What’s strange about Lilly’s apparent rush is that it’s not like an $8 billion transaction would have gone unnoticed on, say, Jan. 18. Arguably, waiting until after the sensory overload of J.P. Morgan would have attracted more attention. And a little patience might have revealed that no one was willing to top that $230 offer, saving Lilly hundreds of millions of dollars in the process.