The ‘mystery buyer’ waiting to pounce on biotech firm ImClone has been revealed as Eli Lilly.

Lilly has trumped rival firm Bristol-Myers Squibb with an offer of $70 per share, or $6.5 billion all told. The offer has been approved by the directors of both companies. In the month before Bristol-Myers made its move with an initial $60 a share offer (later raised to $62) ImClone stock was trading at around $40-45.

“We think very highly of ImClone’s ground-breaking work in oncology, particularly its success with ERBITUX, a blockbuster targeted cancer therapy, and its ability to advance promising biotech molecules in its pipeline,” says John Lechleiter, Lilly’s president and CEO (press release).

Writing in Nature last week about the struggle for the company, Derek Lowe said:

Erbitux and its potential progeny lie at the intersection of two areas of great interest to the drug industry: oncology and biological products. Both are potentially very profitable. Oncology is an area of huge unmet medical need (as the phrase has it, accurately), and the few therapies that actually show a benefit command a high price.

But David Moskowitz, an analyst for Caris & Co. in Washington, told Bloomberg, “This is an act of desperation on the part of Eli Lilly. Lilly will drain substantially all of its cash on the deal. Lilly is already bidding outside the range of what you think would be rational, but these companies are losing big products early next decade.”

However Bristol-Myers already owns 17% of ImClone’s stock and may come back with a new offer. “Bristol is very keen on acquiring this company,” Cowen & Co analyst Eric Schmidt told Reuters. “I think the Lilly thing probably came to them out of left field and I’m not sure that they are going to take it lying down.”