June 20 (Reuters) – Eli Lilly & Co ( LLI.N ) will buy Dice Therapeutics Inc ( DICE.O ) for $2.4 billion in cash, the company said on Tuesday, bolstering its immunotherapy portfolio with experimental pills. Treatment of psoriasis.
The company has been looking to bulk up its vaccine pipeline despite talk of a blockbuster obesity drug, tirzepatide, also known as Mounjaro, to boost future growth.
The deal will help Lilly acquire Dice’s lead drug DC-806, an oral pill in mid-stage trials to treat the skin disease.
A class of drugs that target the inflammatory protein interleukin-17 (IL-17) plays a central role in psoriasis.
The drug’s mechanism of action is similar to Lilly Taltz’s injection, but Dice is developing drugs on a proprietary technology platform for oral medications.
Lilly abandoned development last year and tried unsuccessfully to develop its own oral IL-17 drug.
Indianapolis-headquartered Lilly offered Dice $48 per share in cash, a premium of about 42% to the stock’s last close.
Dice shares rose 37 percent in early trading Tuesday, while Lilly shares were flat. Since the start of 2022, Lilly’s shares are up 62 percent, largely on hopes for Monjaro.
The companies expect to close the deal in the third quarter, subject to regulatory approval.
Analysts expect little confidence risk in the acquisition.
The Dice deal comes as the U.S. Federal Trade Commission’s attempt to block Amgen’s ( AMGN.O ) $27.8 billion acquisition of Horizon Therapeutics ( HZNP.O ) comes amid tighter scrutiny of acquisitions in the pharmaceutical sector.
BMO analyst Evan Seigerman said: “These are the deals that we expect in the near future, the FTC’s investigation – early stage and, therefore, small in size, and they protect against therapeutic weaknesses.”
Reporting by Leroy Leo and Khushi Mandowara in Bengaluru, Editing by Sriraj Kaluvila
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