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Lilly will aim for one $1bn-$5bn deal per quarter in 2020

Company seeks to bolster pipeline with a string of M&A activity

Eli Lilly

Eli Lilly has unveiled plans to amp up its M&A activity for the year, as it aims to make one $1bn-$5bn deal per quarter. 

Lilly’s senior vice president and chief financial officer Joshua Smiley announced the plans at this year’s J.P. Morgan Healthcare Conference, shortly after the company said it will acquire California-based biotech Dermira for a healthy $1.1bn.

“We are looking at Dermira-like opportunities targeting assets in the $1bn to $5bn range,” Smiley told Reuters.

“We’d like to be doing something in the range of one per quarter or so,” he added.

The Dermira deal saw Lilly gain both a marketed drug – medicated cloth Qbrexza (glycopyrronium) for uncontrolled excessive underarm sweating – as well as pipeline candidate lebrikizumab for atopic dermatitis, which is currently in phase 2b testing.

As he revealed plans to target similar assets, Smiley told Reuters that Lilly will have a particular focus on earlier stage opportunities across a number of core therapy areas such as oncology, pain, immunology and neurology.

Lilly needs to refresh its pipeline as it continues to suffer from a decline across its older, established brands – including in its diabetes franchise, where its Humalog insulin is facing generic competition and pricing pressures in the US.

The company recently announced its will launch lower-cost options for more of its insulin products, a few short months after reducing a half-price version of Humalog.

Lilly has come under fire after the price of the treatment rose from $35 to $234 per vial between 2001 and 2015. As a result of the increasing criticism, Lilly, as well as other insulin manufacturers Sanofi and Novo Nordisk, have been making cheaper products available in response.

As a result, Lilly has been working, and looks set to continue to work on expanding its portfolio to reduce its reliance on its older brands.

According to Lilly’s chief executive David Ricks, while the company has a focus on a range of therapeutic areas, most of the planned deals will be in oncology.

Last year, Lilly made its first foray into immunotherapy with an $8bn buyout of Loxo Therapeutics. From that deal, it gained rights to NTRK-inhibitor Vitrakvi, which is FDA approved to treat any solid tumour that has a NTRK gene fusion.

Another promising candidate Lilly gained from the Loxo takeover is LOXO-292, which is currently being studied in phase 3 trials for non-small cell lung cancer and medullary thyroid cancer.

Article by
Lucy Parsons

20th January 2020

From: Sales

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