Lilly targets quarterly deals worth up to $5bn to boost R&D

Eli Lilly is targeting a deal worth between $1 billion to $5 billion every quarter in 2020 as it seeks to build its R&D pipeline, its chief financial officer has said.

Josh Smiley told Reuters in an interview at the JP Morgan Healthcare conference in San Francisco that the deals will focus on early stage drugs in its areas of R&D expertise.

This covers areas where Lilly already has expertise such as oncology, pain, immunology, and neurology.

Lilly has already struck a string of deals to refresh its pipeline as older products such as its insulin Humalog face pressure from biosimilars and generics.

Smiley gave the interview the week after Lilly announced its $1.1 billion deal to buy dermatology specialist Dermira.

With that deal Lilly acquired Dermira’s eczema drug lebrikizumab, which is in late stage development and could be a competitor to Sanofi’s Dupixent (dupilumab).

It also got an already-marketed medicated dressing used to treat excessive underarm sweating, Qbrexza (glycopyrronium).

Smiley told Reuters: “We are looking at Dermira-like opportunities targeting assets in the $1 billion to $5 billion range.

“We’d like to be doing something in the range of one per quarter or so.”

Chief executive David Ricks gave a presentation earlier in the week to investors showing that he expects most of the deals to be related to cancer.

Lilly is looking at late-stage assets, but Smiley said the focus will be on early stage drugs – these cost less as there is a greater risk of failure early in clinical development, but could provide better returns for investors should they make it through trials to market.

Deals could include licensing agreements, acquisitions, or other structures, Smiley said.

Lilly is bullish about the prospects for its newer medicines including diabetes drug Trulicity (dulaglutide) and inflammatory diseases drug Taltz (ixekizumab), despite pressure to reduce prices in the US.