Lilly makes fresh bet on IL-17 with $2.4B acquisition of Dice Therapeutics

Eli Lilly has taken a high-stakes gamble on oral IL-17 inhibitors, betting $2.4 billion upfront that acquiring Dice Therapeutics will expand its autoimmune arsenal.

The deal, which has already been signed off on by the boards of both companies, will see Lilly pay $48 per share of Dice—a 40% premium to the biotech’s 30-day volume-weighted average trading price.

For Lilly, the biggest rewards are the biotech’s two clinical assets DC-806 and DC-853. Lead candidate DC-806 is an oral small-molecule antagonist of the pro-inflammatory cytokine interleukin-17 (IL-17) that’s in phase 2 trials for psoriasis. In October, Dice used phase 1 results showing a 43.7% reduction in psoriasis area and severity to claim the therapy had best-in-class potential.

Meanwhile, DC-853 is being developed as a so-called fast follower to DC-806, meaning it should have improved potency and metabolic stability. A top-line readout from a phase 1 trial of this IL-17 antagonist in healthy volunteers is due in the second half of the year. The company is also considering branching the therapy off into indications not covered by DC-806, such as hidradenitis suppurativa.

Still in the discovery stage are an oral α4β7 program being developed for inflammatory bowel disease and an oral αVβX program being investigated for fibrosis. There’s even an oral PD-L1 program that will hopefully be applied to various cancers.

"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, president of Lilly Immunology, in Tuesday morning's release. "We welcome Dice colleagues to Lilly and, together, we can tackle the challenges ahead in finding new treatments for patients with significant unmet medical needs."

Injectable antibodies against IL-17 have made a big impact in autoimmune disease, most notably Novartis’ Cosentyx. Lilly already markets an IL-17A inhibitor for psoriasis called Taltz. Then there’s anti-IL-23p19 antibody mirikizumab that’s reached the Japanese market, with hopes of securing European and other international approvals in ulcerative colitis this year.

UCB has its own contender to Cosentyx's crown in the form of bimekizumab. The IL-17A/F antibody has already been approved for psoriasis in Europe, with an FDA decision pending after a previous rejection.

For its part, it doesn’t look like Dice Therapeutics was in need of a financial bailout. The biotech ended March with $554.5 million in cash and equivalents, which it predicted would allow it to hit its clinical milestones all the way through to 2026.

"We're eager to see our pipeline, including our oral IL-17 inhibitors, DC-806 and DC-853, benefit from Lilly's resources and global reach and I'm excited by the prospect of watching these two talented teams in a united quest for scientific innovation,” Dice CEO Kevin Judice, Ph.D., said in the release.

The deal is a further sign that big value M&A is picking up pace again this year, coming a week after Novartis paid $3.4 billion upfront for kidney-disease-focused Chinook Therapeutics and the month after Astellas forked out $5.9 billion for eye disease-focused Iveric Bio.