Eli Lilly and Company (LLY)

Item 8.01 Other Events.

Eli Lilly and Company today announced that it has signed a definitive merger agreement whereby Lilly will acquire Hypnion, Inc., a privately held neuroscience drug discovery company focused on sleep disorders. The transaction has received the requisite approval of Hypnion stockholders and is expected to close near the end of the first quarter of 2007, contingent upon clearance under the Hart-Scott-Rodino Anti-Trust Improvements Act and other customary closing conditions. Financial terms of the acquisition were not disclosed.

Upon closing, Lilly will incur a charge to earnings for acquired in-process research and development. The amount of the charge has not been finalized but is not expected to exceed $0.30 per share. The acquisition will not otherwise have a material impact on Lilly’s earnings per share for 2007. The transaction will be funded by existing cash balances and will not materially affect Lilly’s liquidity. Lilly expects to maintain its debt ratings from Standard & Poor’s and Moody’s of AA and Aa3, respectively.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Item 8.01. Other Events.

On June 9, 2005, Eli Lilly and Company (the "Company") announced that it had entered into an agreement in principle with plaintiffs’ attorneys involved in Zyprexa® product liability litigation to settle a majority of the claims against the Company relating to the medication. The Company's press release announcing the tentative settlement is attached as Exhibit 99 to this Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit Index