Lilly bets $2.4bn on Dice’s immune disease platform

Eli Lilly has struck a $2.4 billion deal to buy Dice Therapeutics and its drug discovery and development platform for oral, small molecule therapies for immunological diseases.

The big pharma is paying $48 per share for San Francisco-based Dice - a 40% premium to the biotech’s latest closing price. Dice’s lead product candidate is oral IL-17 inhibitor DC-806, which is in phase 2 testing as a treatment for plaque psoriasis.

If it makes it through development, DC-806 could offer a more patient-friendly alternative to injectable IL-17 inhibitors, like Novartis’ multibillion-dollar blockbuster Cosentyx (secukinumab), Lilly’s Taltz (ixekizumab), Bausch Health/Ortho’s Siliq (brodalumab), and UCB’s Bimzelx (bimekizumab).

The deal marks a return to Lilly in the oral IL-17 inhibitor category, after it abandoned the development of its own LY3509754 candidate when liver toxicity was seen in a phase 1 trial.

That left Dice out in front in the category, ahead of other rivals including Sanofi, which licensed a preclinical-stage oral IL-17 drug from C4X Discovery in 2021 that still hasn’t advanced into human testing. At one point, Sanofi had a wide-ranging licensing agreement with Dice, first signed in 2016, but that was dissolved last year.

Dice reported top-line results from a phase 1 proof-of-concept trial of DC-806 last October, showing a 44% reduction in the Psoriasis Area and Severity Index (PASI) compared to 13% with a placebo. In May, the biotech started dosing patients in a phase 2b trial of DC-806 in moderate-to-severe psoriasis.

Other oral therapies for this are already available; notably, Amgen’s PDE4 inhibitor Otezla (apremilast) and Bristol Myers Squibb’s Tyk-2 inhibitor Sotyktu (deucravacitinib). So, Dice’s lead drug will need to differentiate itself from those.

Dice has previously said that it thinks DC-806 could become a product that combines “Cosentyx’s benefit with Otezla’s convenience.”

A second of its oral IL-17 candidates – codenamed DC-853 and with a “differentiated potency and safety profile” – has also started phase 1 testing, with results due later this year, according to the biotech.

Meanwhile, Dice’s pipeline also includes programmes targeting integrins, with potential in inflammatory bowel disease and fibrosis, and PD-L1, which could lead to an oral alternative to checkpoint inhibitors like Merck & Co’s Keytruda (pembrolizumab).

“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, Eli Lilly’s head of immunology.

The deal – which is expected to close in the third quarter – provides further evidence of a growing appetite for M&A among pharma and biotech that has resulted in $85 billion in transactions agreed in the first five months of the year, up from $36 billion in the same period of 23022, according to analysts at Stifel.

Photo by Riho Kroll on Unsplash.