Lilly’s CEO looks to M&A, but not for CAR-T or gene therapies
Eli Lilly’s CEO David Ricks could sign more deals to strengthen its pipeline of cancer drugs, but is leaving gene cell-based CAR-T oncology drugs and rare disease gene therapies for others to develop.
In an interview with Reuters, Ricks said that the company would rather focus on conventional drugs than chimeric antigen receptor T-cell (CAR-T) therapies, which are expensive to manufacture and are limited to a small group of patients.
Ricks has been in post now for two years after taking over from John Lechleiter, and is beginning to make his mark on the company, most notably with this month’s $8 billion acquisition of cancer drugs firm Loxo.
And while there is plenty of scope for more buys, Ricks is ruling out purchasing firms developing CAR-Ts and other gene therapy based treatments, which are proving expensive and complex to make and difficult to market.
He told Reuters: “The data is amazing, but practically, it’s not reaching many people.”
CAR-Ts are manufactured by harvesting a patient’s own T-cells and modifying them to attack cancer before reinjecting them back into the patient, but so far have only been approved to tackle certain kinds of blood cancer.
Costing nearly $400,000 for a single treatment, Ricks said that Medicare reimbursement arrangements mean hospitals are covering much of the bill for these therapies.
“We have said it’s not for us right now,” said Ricks.
Reuters noted that Ricks is much bolder than his predecessors in terms of acquisitions, after years when Lilly tried to make headway using in-house R&D.
Lilly last year bought cancer immunotherapy firm Armo BioSciences for $1.6 billion, several years after the first such drugs came to market and nearly a decade after pharma companies such as Bristol-Myers Squibb and Merck & Co realised their potential.
According to Reuters, Ricks is also ruling out bets on firms making gene therapy drugs as they are likely to fall outside the company’s focus areas of neuroscience, diabetes and immunology.
Most gene therapies fix defects in single genes and as such will likely be used to treat very rare diseases – another area that is also “not an area of interest” for Lilly according to Ricks.
Gene therapies have also proved to be hugely expensive, with Spark Therapeutics’ Luxturna for a kind of inherited blindness costing $850,000 to treat both eyes.
Ricks also ruled out interest in a large-scale merger, such as the recently closed Takeda-Shire takeover, or the recently announced acquisition of Celgene by Bristol-Myers Squibb.
Big pharma mergers are often criticised for ending or hindering development of important drugs, as companies choose their R&D priorities after large deals have closed.
“I think scale probably destroys more value than it creates,” Ricks said. “What matters is really differentiation of assets.”
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