Eli Lilly has finalized an agreement to procure an innovative treatment directed at breast cancer and other advanced solid tumors from Scorpion Therapeutics for a total consideration that could reach up to $2.5 billion. This acquisition price encompasses an initial payment joined by additional amounts that Scorpion's shareholders will earn contingent upon meeting specific regulatory benchmarks and sales milestones.
Following this news, Eli Lilly's stock experienced a decline, falling 1.7% in midday trading. As per the terms of the arrangement, Eli Lilly will secure Scorpion's STX-478, an investigational oral medication that is currently being assessed in clinical trials. Concurrently, Scorpion plans to separate its non-phosphoinositide 3-kinase alpha pipeline assets into a novel entity which will be held by Scorpion's existing shareholders, whilst Eli Lilly will maintain a minority stake in this new company. Jacob Van Naarden, President of Lilly Oncology, remarked, "Phosphoinositide 3-kinase alpha mutations are prevalent in a significant percentage of hormone-positive breast cancers, indicating a considerable unmet need for novel treatment alternatives that can effectively and safely target this pathway." Furthermore, STX-478 is designed for use in combination with established treatment therapies, promising to make a significant impact in early treatment scenarios, as explained by Van Naarden. Adam Friedman, Scorpion's Chief Executive, expressed confidence in the deal, stating, "We believe Lilly's global competencies and strong commitment to providing for breast cancer patients will hasten our objective of advancing STX-478 to enhance treatment outcomes for numerous patients suffering from solid tumors linked to phosphoinositide 3-kinase alpha mutations." The current management framework at Scorpion, under Friedman's leadership, will be responsible for running the newly established company.
Although an exact closure timeline for the deal has not been disclosed, both companies indicated that the transaction is contingent upon standard closing conditions. Eli Lilly has scheduled to report its fourth-quarter earnings on February 6. For its third-quarter results, the pharmaceutical powerhouse revealed a remarkable 17% surge in sales across its non-incretin division, which encompasses portfolios related to oncology, immunology, and neuroscience.
Notably, Eli Lilly's stock was priced at 785.08, with a change of -14.82, reflecting a percent change of -1.85..