Jan. 29 (Bloomberg) -- John Lechleiter, chief executive officer of Eli Lilly & Co., said he is shopping for acquisitions much smaller than Pfizer Inc.’s $68 billion offer to buy Wyeth, adding that large purchases don’t boost profits.

Lilly, which bought ImClone Systems Inc. in November for $6.3 billion, is looking to buy companies with small to mid-sized market values, Lechleiter said in an interview today. His comments reflect similar statements by the heads of Bristol-Myers Squibb Co., Novartis AG, Abbott Laboratories and GlaxoSmithKline Plc. Pfizer, by contrast, agreed to acquire Wyeth in the biggest pharmaceutical deal in almost a decade.

“We have been clear that we do not believe these large combinations in the long term have sustained value,” Lechleiter said today in the interview. “Consolidation is obviously happening and there may be additional consolidation. If we see a small or mid-cap opportunity, like ImClone, we’ll go for it.”

Lilly, based in Indianapolis, bought ImClone to add the cancer medicine Erbitux and experimental drugs. That will bolster revenue before the 2011 patent expiration of the antipsychotic Zyprexa, Lilly’s top product, with $4.7 billion in sales last year. Lilly faces a U.S. Food and Drug Administration panel on Feb. 3 to discuss its experimental blood thinner, prasugrel.

Lilly today reported a fourth-quarter loss of $3.63 billion, or $3.31 a share, because of the ImClone purchase. The company has cash and marketable securities of $6.12 billion.

The shares fell $1.12, or 2.9 percent, to $37.97 at 4:01 p.m. in New York Stock Exchange composite trading.

Fifth Largest Biotech

The acquisition of ImClone makes Lilly the fifth-biggest biotechnology company in the world, and it “makes sense” that the company would consider creating a unit to develop generic versions of biological drugs, Lechleiter said. The company wants to both expand products similar to its current offerings and target “new avenues of growth.”

Lechleiter declined to comment on the potential cost of pending claims over illegal sales practices Zyprexa. The company may face another $2 billion in lawsuits after it pleaded guilty to criminal charges of improper marketing and agreeing to spend more than $2.6 billion to settle claims, according to Taxpayers Against Fraud, which tracks the suits.

“The company deeply regrets the past actions covered by the plea,” said Phil Johnson, executive director of investor relations, in a call to investors.

Today Lilly reiterated its 2009 earnings forecast of $4 to $4.25 a share, or $4.35 to $4.55 if the ImClone purchase is excluded.

To contact the reporter on this story: Tom Randall in New York at trandall6@bloomberg.net.

Last Updated: January 29, 2009 16:21 EST