Eli Lilly
has agreed to buy
DICE Therapeutics
in a $2.4 billion cash deal that reflects Lilly’s ambitions in immunology, a hot market where the company has lagged behind its coompetitors.
Lilly
(ticker: LLY) said that its acquisition of
DICE
(DICE) would allow it to leverage the company’s developing treatments aiding chronic diseases in immunology, marking a push into treating autoimmune disorders from the 147-year-old healthcare company.
Shares in Lilly shed 0.2% in premarket trading on Tuesday. DICE stock jumped 38% to $46.59.
Lilly, which runs neck-and-neck with
Johnson & Johnson
(JNJ) for the title of largest biopharma firm by market capitalization, is a dominant player in treatments for diabetes and obesity. But it has trailed behind rivals in marketing treatments for autoimmune conditions, an area that has produced many of the industry’s biggest blockbusters over the past decade.
Lilly’s Taltz, which treats a number of conditions including plaque psoriasis, sold $2.5 billion last year, far short of
AbbVie
‘s (ABBV) megablockbuster Humira, which sold $21.2 billion last year. The drugs address similar conditions.
“We are aiming to be a top player in immunology,” Lilly’s head of immunology, Patrik Jonsson, told investors at a
Bank of America
conference in May.
The
DICE Therapeutics
deal seems aimed at helping Lilly get there. DICE is developing two drugs in the category known as IL-17 inhibitors as treatments for psoriasis and other chronic immunology indications. One of them, DC-806, is in a Phase 2 trial.
“We’re eager to see our pipeline, including our oral IL-17 inhibitors, DC-806 and DC-853, benefit from Lilly’s resources and global reach,” DICE CEO Kevin Judice said in a statement.
The deal, for $48 a share, has been approved by the boards of both companies and represents a represents a premium of around 40% to the 30-day volume-weighted average trading price of DICE stock. The takeover is expected to close in the third quarter of 2023 subject to conditions including antitrust clearance.
“In combination with its novel technology and expertise in drug discovery, Dice’s talented workforce and passion for innovation will enhance our efforts to make life better for people living with devastating autoimmune diseases,” Patrik Jonsson, president of Lilly Immunology and Lilly USA, as well as the company’s chief customer officer, said in a statement.
Write to Jack Denton at [email protected]
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