In active shopping mode, Eli Lilly plots one deal per quarter as it scouts 'Dermira-like' assets up to $5B
By delivering the only M&A news in a relatively muted deal scene at JP Morgan, Eli Lilly distinguished itself as an active buyer right at the start of the year. And, according to its CFO, you can expect more to come in the year ahead.
Lilly kicked off the annual confab — prime time for Big Pharma players to stake their claims in key areas — on the Friday before the action got going in San Francisco with the announcement that it’s bagging Dermira for $1.1 billion. The biotech had a commercial product and a suite of preclinical dermatology programs, but the crown jewel was undoubtedly the late-stage IL-13 drug lebrikizumab.
“We are looking at Dermira-like opportunities targeting assets in the $1 billion to $5 billion range,” Lilly CFO Josh Smiley told Reuters. “We’d like to be doing something in the range of one per quarter or so.”
Not all of them would have to be nearing the finish line as lebrikizumab was. In fact, Smiley added that he sees the most opportunity in earlier stages of development — and they have an appetite for a range of deal structures from licensing to acquisitions to anything in between. Drugs for pain, immunology and neurology are of high interest.
His comments echo similar strategies laid out by Josh Bilenker, the former chief of Loxo who’s now in charge of all things oncology at Lilly after the pharma giant bought out his startup for $8 billion last January.
“There’s always appetite in pharma to do that: If there’s an asset that’s interesting, go get it,” Bilenker said on a panel hosted by Endpoints days ago. “As the secondary follow on financing market softens, I think the leverage shifts a bit to the ability to transact on an asset level basis.”
Lilly has spotlighted oncology as an R&D priority as it battles heightened scrutiny on insulin pricing and fights for a place in other crowded spaces such as migraine, rheumatoid arthritis and psoriasis. Dan Skovronsky, the CSO, has also championed a renewed focus on Alzheimer’s, where the pharma giant suffered a painful retreat after the high-profile failure of solanezumab.