Eli Lilly boosts immunology business with $2.4 billion deal for Dice
(Reuters) -Eli Lilly and Co will buy Dice Therapeutics Inc for about $2.4 billion in cash, the company said on Tuesday, bolstering its immune disease-related portfolio with an experimental pill to treat psoriasis.
The company has been looking to bulk up its immunology pipeline, even as it bets on potential blockbuster obesity drug tirzepatide, also known as Mounjaro, to drive future growth.
The deal helps Lilly gain Dice's lead drug, DC-806, an oral pill being tested in a mid-stage trial to treat skin condition psoriasis.
It belongs to a class of drugs targeting the inflammation-causing protein interleukin-17 (IL-17), which plays a central role in psoriasis.
The drug's mechanism is similar to Lilly's Taltz injection but Dice is developing drugs on a proprietary technology platform for oral medicines.
Lilly tried and failed in developing its own oral IL-17 drug, abandoning its development last year.
Indianapolis-headquartered Lilly has offered Dice $48 per share in cash, a premium of about 42% to the stock's last close.
Shares of Dice were up 37% in early trade on Tuesday, while Lilly's stock was flat. Lilly's shares have soared 62% since the beginning of 2022, mainly on hopes for Mounjaro.
The companies expect to close the deal in the third quarter, subject to regulatory clearances.
Analysts expect little risk of antitrust concerns over the acquisition.
The Dice deal comes when the U.S. Federal Trade Commission's attempt to stop Amgen's $27.8 billion acquisition of Horizon Therapeutics has sparked worries over tighter scrutiny of pharma sector buyouts.
"These are the kind of deals we expect in the near term, given FTC scrutiny - early stage and, therefore, small in size, and avoidant of therapeutic redundancy," BMO analyst Evan Seigerman said.
(Reporting by Leroy Leo and Khushi Mandowara in Bengaluru, Editing by Sriraj Kalluvila)
