Lilly to Acquire Dice for $2.4B: Boosting Immunology Pipeline


Eli Lilly has made headlines with its acquisition of DICE Therapeutics for a striking $2.4 billion. This deal is set to enhance Lilly’s immunology pipeline, primarily through two advanced clinical-stage programs that are focused on oral interleukin-17 (IL-17) inhibitors.

One of the key highlights of DICE’s portfolio is DC-806, a mid-stage clinical candidate for treating psoriasis. Notably, this drug is undergoing a Phase II trial aimed at evaluating various doses against a placebo over 12 weeks. The trial involves around 225 patients with moderate-to-severe psoriasis. The study’s goals include assessing peak efficacy and determining induction and maintenance doses for Phase III.

Despite the progress of DC-806, DICE has ambitious plans to extend its reach into other IL-17 targeted indications. These extensions may include treatment areas like psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondyloarthritis. These areas are already serviced by rival drugs such as Novartis’ Cosentyx (secukinumab) and Lilly’s own Taltz (ixekizumab). Remarkably, Cosentyx earned $4.788 billion in net sales last year, while Taltz generated $2.482 billion, highlighting the potential market size.

Considering the success of injectable IL-17 drugs, which collectively achieve over $6 billion annually in psoriasis alone, the sales potential for DC-806 could be enormous if later-stage trials are favorable. The potential for DC-806 to be a major player in the industry hinges on forthcoming Phase II data expected by mid-2024.

Another IL-17 inhibitor from DICE, DC-853, is noted for potentially offering improved potency and metabolic stability over DC-806. Topline data from a Phase I trial involving healthy volunteers is anticipated later this year.

Both drugs represent small molecule solutions to chronic immunological diseases. DICE’s innovation lies in its DELSCAPE technology platform, which uses DNA-encoded libraries. This platform enhances the ability to target historically difficult proteins, such as protein-protein interactions, through oral small molecule inhibitors.

DICE has demonstrated a forward-thinking approach with its diverse portfolio:

  • Novel scaffold program: This program includes small molecule IL-17 inhibitors aimed at treating psoriasis and other autoimmune and inflammatory diseases, seeking compounds with increased structural diversity.
  • Oral α4β7 program: Small molecule inhibitors targeting inflammatory bowel disease fall under this initiative.
  • Oral αVβX program: Targeted at treating fibrosis, this program features inhibitors with various selectivity profiles.
  • Oral PD-L1 program: This program is focused on developing small molecule inhibitors of PD-L1 to treat different cancers.

Investors have reacted positively to the merger, lifting DICE’s stock by nearly 37% to $46.44 after the announcement. Lilly’s commitment to the acquisition at $48 per share represents a 42% premium over DICE’s previous share price. Analysts acknowledge that while this is not the largest premium in recent deals within this sector, it reflects a fair valuation given the timeline for the next significant milestone in DICE’s pipeline.

Lilly’s collaboration with DICE is poised to address unmet needs in autoimmune disease treatment. The combined resources, talent, and technology of both companies hold promise for significant advancements in the field. DICE’s workforce, known for its innovation, is expected to galvanize Lilly’s efforts for better treatments in chronic diseases.

In the words of Patrik Jonsson of Lilly, the union is not just a strategic expansion but a commitment to improving lives. DICE’s CEO, J. Kevin Judice, echoed this sentiment, looking forward to leveraging Lilly’s robust clinical development capabilities to benefit patients globally.

In summary, the merger between Eli Lilly and DICE Therapeutics marks a significant stride in the quest for better, more efficient treatments for autoimmune diseases. With both companies joining forces, the future looks promising for the development of innovative therapies that could potentially transform the landscape of immunological treatments.

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