Lilly to buy California immunology company in $2.4B deal
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Eli Lilly and Co. announced Tuesday morning it is buying a California biopharmaceutical company in a deal worth about $2.4 billion as it looks to expand its presence in skin diseases and immunology disorders.
The Indianapolis-based drugmaker said it would acquire Dice Therapeutics Inc., based in South San Francisco, for $48 a share, a 39% premium over its closing price Monday of $34.50. The transaction has been approved by the boards of directors of both companies.
Dice, formed in 2013, went public in 2021. It does not yet have any products on the market, but has several experimental drugs in its pipeline for psoriasis, inflammatory bowel disease and other chronic diseases in immunology.
The deal would boost Lilly’s portfolio of immune drugs, which includes Olumiant for rheumatoid arthritis and Taltz for plaque psoriasis (red, scaly patches of skin) and stiffening of the spine. It’s a huge opportunity for Lilly. In 2022, Taltz rang up sales of $2.48 billion while Olumiant generated $830.5 million in sales.
Shares of Dice soared 38% in premarket trading Tuesday morning to $46.50, signaling that investors believe the deal will close without any hitches and is a good move by both companies. The deal is expected to close in the third quarter.
Dice has a proprietary technology platform to build a pipeline of novel oral therapeutic candidates to treat chronic diseases in immunology.
“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,” said Patrik Jonsson, executive vice president, president of Lilly Immunology and Lilly USA and chief customer officer.
Kevin Judice, CEO of DICE Therapeutics, added: “Our novel approach to discovering and advancing oral, small molecules against validated protein-protein interaction targets has even greater potential with Lilly’s industry-leading clinical development capabilities to get these medicines to patients suffering from autoimmune diseases.”
Lilly will determine the accounting treatment of this transaction as a business combination or an asset acquisition, including any related acquired in-process research and development charges.