Eli Lilly Considers Viking Therapeutics Acquisition Amid 40-Year Bond Issuance

Eli Lilly is considering an acquisition, with Viking Therapeutics as a potential target. The company recently issued a 40-year bond, a rare move in the corporate bond market, sparking speculation about a strategic play. Chief Market Strategist Shay Boloor believes Lilly is setting up for something big, citing underwhelming Phase 3 GLP-1 data and recent billionaire investor Stanley Druckenmiller's acquisition of Viking shares.

Eli Lilly and Company (LLY) recently issued a 40-year bond, a rare move in the corporate bond market that has sparked speculation about a potential acquisition. The pharmaceutical giant's unusual bond issuance, which includes a 40-year note, has prompted analysts to suggest that LLY might be preparing for a major acquisition, with Viking Therapeutics Inc. (VKTX) emerging as a potential target.

The issuance of a 40-year bond is unusual, as most companies are hesitant to lock in long-term rates. According to GuruFocus, in 2025, bonds with maturities of 30 years or more constituted only 11% of investment-grade corporate bond sales [1]. LLY's decision to issue a multi-tranche debt deal, including the 40-year note, is a significant outlier in this context. The deal is being managed by a syndicate of top banks, including Citi, Goldman Sachs, and JPMorgan, and is expected to receive high-grade ratings.

Chief Market Strategist Shay Boloor of Futurum Equities believes that a company like Lilly "doesn’t issue a 40-year bond unless they’re setting up for something BIG" [1]. The speculation intensified as Boloor pointed to LLY’s recent "underwhelming Phase 3 GLP-1 data" and added that it was "hard not to wonder if they’re lining up dry powder for a move on $VKTX" [1]. The recent news that billionaire investor Stanley Druckenmiller's Duquesne Family Office LLC has acquired 549,295 shares worth $15 million in Viking adds weight to this theory [1].

The proceeds of the bond issuance are listed as "general corporate purposes," but the scale and timing of the move suggest a more strategic play. By securing a massive amount of capital at current rates, LLY could be positioning itself for a significant acquisition. The whispers about Viking Therapeutics, a company making waves in the highly competitive weight-loss drug market, have become more compelling.

Price action for LLY has been volatile. The stock fell 0.45% to $698.05 on Monday and declined 0.24% in after-hours trading. It has lost 10.28% on a year-to-date basis and 24.27% over the past year [1]. Despite the recent decline, LLY maintains a weaker price trend in the short, medium, and long terms but scores well on growth and quality rankings [1].

The bond issuance comes as the Federal Reserve is expected to deliver a pivotal Jackson Hole address, which could have significant implications for the market [2]. The S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, ended slightly below the flat line on Monday [1].

In conclusion, Eli Lilly's 40-year bond issuance is a strategic move that has sparked speculation about a potential acquisition. While the official use for the proceeds is listed as "general corporate purposes," the timing and scale of the move suggest a more strategic play. Viking Therapeutics is a potential target, given the recent acquisition of shares by billionaire investor Stanley Druckenmiller and LLY’s recent underwhelming Phase 3 GLP-1 data.

References:
[1] https://www.benzinga.com/markets/equities/25/08/47201502/eli-lilly-considering-viking-therapeutics-acquisition-expert-says-theyre-setting-up-for-something-big-as-lly-issues-40-year-bond
[2] https://finance.yahoo.com/news/eli-lilly-just-did-almost-211923152.html