Lilly builds in radiopharma with $140m Radionetics deal

Eli Lilly has lined up another deal in the radiopharmaceutical sector, paying $140 million to partner drugs developed by Radionetics Oncology and taking an option on buying the company outright for $1 billion.

Radionetics is working on small-molecule drugs that target G protein-coupled receptors (GPCRs), a fertile source of drug targets for the pharma industry and the target of around a third of all marketed drugs, but which, according to the company, is a “largely unexplored” class for radiopharma.

The San Diego-based biotech is tasked by Lilly with generating a pipeline of radioligand therapeutics for solid tumours based on small molecules tethered to either alpha- or beta-particle-emitting radioisotopes.

The agreement is just the latest of a lengthening list of partnerships and takeovers in radiopharma by large pharma groups, seeking to tap into a market that is expected to almost triple in size in the next decade to reach more than $13 billion, according to market research firm Precedence.

Just a few months ago, Lilly snapped up POINT Biopharma for around $1.4 billion, adding a PSMA-targeted radioligand therapy called PNT2002, which is in the phase 3 SPLASH trial in patients with metastatic castration-resistant prostate cancer (CRPC) after they have progressed on standard hormone-based therapy. If approved, it would compete with Novartis’ Pluvicto (lutetium Lu 177 vipivotide tetraxetan), which is on track to breach the $1 billion-a-year sales threshold in 2024.

Meanwhile, in May, Lilly paid $60 million upfront to use Aktis Oncology's technology to generate radiopharma candidates for solid tumours in a deal that could be worth up to $1.1 billion.

The market for radionuclide-based cancer therapeutics is particularly attractive because there is relatively limited competition in the market, in part because the hurdles to enter the category are set fairly high. However, the category is seeing record levels of venture capital investment for start-ups at the moment, pointing to a much more crowded sector in the coming years.

Radionetics’ recently appointed chief executive Paul Grayson, who said Lilly is a great partner, given its global development capability, oncology expertise, and the radiopharma experience and capabilities it is building via the POINT acquisition.

Grayson joined the company in January as it raised $52.5 million in a Series A financing led by Frazier Life Sciences, 5AM Ventures, and DCVC Bio, bringing the total raised to date to $82.5 million.

At the time, Grayson said the “spatial biology and pharmacology of GPCRs makes them ideal for small molecule radiopharmaceutical development, opening a new chapter for the field.”