Pressure was mounting on Bristol-Myers Squibb (NYSE: BMY - News) on Thursday to raise its $62 a share unsolicited offer for ImClone, the US biotech company, which said it was continuing negotiations with a second "mystery bidder".

Eli Lilly is considering making a rival takeover offer to BMS's bid at about $70 a share, or a total $6bn, according to one individual close to the discussions.

ImClone has refused to reveal the identity of the second bidder, while saying the bidder would make a proposal or withdraw by midnight next Wednesday. Neither Eli Lilly nor ImClone would comment further.

The refusal by Carl Icahn, the chairman, to reveal the identity of the second bidder has caused frustration among investors, but already prompted BMS to raise its original bid from $60 a share and say it would take its offer straight to shareholders and try to remove ImClone's board of directors.

Analysts believe that Pfizer of the US could also be interested in acquiring the company, while Karl-Ludwig Kley, head of Merck of Germany, told journalists on Monday that although he was not the mystery bidder, he might consider taking part in an approach for ImClone.

Interest in the company in spite of the current crisis among investors and financial institutions reflects the intensifying need by larger pharmaceutical companies to strengthen their portfolio of medicines to replace those going off patent, notably through expanding biotechnology activities, including oncology treatments.

The relatively weak dollar could also help improve the terms of an acquisition by a European company.

Michael King, senior biotechnology analyst at Rodman & Renshaw, the investment bank, said a purchase by Eli Lilly would allow it to become a significant player in oncology, alongside its drugs Alimta, for non-small cell lung cancer, and Gemzaar, which is used to treat breast, pancreatic, and ovarian cancer.

He estimated ImClone's value at up to $71 a share, while other analysts warned that any higher bid would raise questions about overpaying for the company's pipeline of drugs in development.

Merck of Germany has licensed ImClone's Erbitux outside North America and Japan, an arrangement that could complicate the US group's takeover by BMS, which has said previously it wanted exclusive worldwide rights to drugs.

ImClone would be by far the largest acquisition for BMS, which previously completed the purchase of ICOS in 2006 for $2.6bn.

BMS has also periodically been seen as a takeover target, including by Sanofi-Aventis (NYSE: SNY - News) of France, its partner for the blood-thinning drug Plavix.

BMS already owns 17 per cent of ImClone and has a longstanding partnership with the company to sell Erbitux in North America. Its existing $62 per share bid values the rest of the company that it does not own at $4.7bn.