How Lilly is using its Mounjaro millions to position as biotechs' 'partner of choice'

Eli Lilly’s explosion into the weight loss space is proving fruitful for shareholders, but it’s also providing fresh opportunities for biotechs looking for a Big Pharma partnership.

Lilly’s incubator arm, Gateway Labs, already operates two sites in South Francisco. The organization is set to expand to the east coast in August via a presence at the Lilly Institute for Genetic Medicine in Boston's Seaport district. That will be followed by the opening of a permanent space in San Diego next year.

The Gateway Labs are co-working spaces for researchers that also act like accelerators. The idea is that companies or researchers that lease space have the opportunity to collaborate on mutually beneficial research and tap into Lilly’s expertise.

“We're really excited to expand this model,” Gateway Labs’ global head Julie Gilmore, Ph.D., told Fierce Biotech in an interview on Tuesday.

“I like to think this is high touch—we really engage with our companies,” she said. “So it’s not going to be one where you've got hundreds of Gateway sites around the globe. But we are excited to continue to scale this and go to geographies where we think we can make a difference.”

Gilmore spoke to Fierce Biotech on the sidelines of the LSX World Congress in London on the day that Lilly reported first-quarter earnings. When Lilly is looking to expand the Gateway model and attract new biotech partners, it can’t hurt that the company raised full-year guidance by $2 billion to a range of between $42.4 billion and $43.6 billion on the back of sales of tirezeptide-based medicines Mounjaro and Zepbound.

“We're in a great spot to be able to do this right now,” Gilmore said.

Unsurprisingly, much of the energy when Lilly is picking suitable partners remains on the pharma’s areas of strength: neurodegeneration and pain; endocrine and diabetes; obesity; immunology; and oncology.

“Those are kind of our core therapeutic areas that we will continually look for partnering opportunities,” Gilmore said.

But as part of the broader Catalyze360 initiative—unveiled by Lilly CEO David Ricks at the J.P.Morgan Healthcare Conference in January—Lilly is “increasingly” also seeking out more off-piste projects, according to Gilmore.

“This is a group that's out there looking for novel science, and it can be completely independent of our existing therapeutic areas,” Gilmore explained.

Gateway Labs falls under the Catalyze360 umbrella, which also has a venture arm. “We're out there trying to understand what do companies need to progress their science? And what can a company like Lilly offer them?” she said about the Catalyze ethos.

The final piece of the Catalyze360 jigsaw is ExploR&D, a way for Lilly to offer what it hopes is an irresistible package of investigational new drug-enabling and clinical development capabilities for drug developers. The aim is to become the “partner of choice” for biotechs, Gilmore said.

“It's a whole host of services,” she added. “Whether they need help with their clinical trial, we've got capabilities that support that. If you need help making your antibody, if you need immunogenicity testing, if you need access to some of Lilly's proprietary assays—we're looking at all the ways to help companies that have great innovation to progress.”

The bespoke offering each potential partner receives means Lilly has to be flexible about what it receives in return, with options including a service fee or payment in equity, for example.

“We can really work around the financial model in the best way that's going to help the company,” she said. “Investments often will predate a formal collaboration.”

So far, around 20 companies have made use of the Gateway Labs model, while a similar number of biotechs have signed up to ExploR&D.

Lilly has made direct investments in over half of the companies operating at its Gateway sites and has already in-licensed three programs from Gateway-based companies, according to Gilmore, although she didn’t offer specific examples.

“At the end of the day, of course, we're going to always continue to look for ways to contribute to our internal pipeline,” Gilmore added. “But we're also really interested in just helping biotechs advance innovation.”