Lilly to acquire Scorpion Therapeutics' mutant-selective PI3Kα inhibitor program

Rhea-AI Summary

Eli Lilly (NYSE: LLY) has announced a definitive agreement to acquire Scorpion Therapeutics' PI3Kα inhibitor program STX-478, a precision oncology treatment currently in Phase 1/2 clinical trials. The deal, valued at up to $2.5 billion, includes upfront payment and milestone-based subsequent payments.

STX-478 is a once-daily oral, mutant-selective PI3Kα inhibitor being evaluated for breast cancer and other advanced solid tumors. The treatment could potentially benefit 30-40% of people with hormone-positive breast cancer by selectively targeting cancerous cells while sparing healthy ones, potentially offering better disease control and improved tolerability compared to current treatments.

As part of the transaction, Scorpion will spin out a new independent entity to retain its employees and non-PI3Kα pipeline assets, with Lilly maintaining a minority equity stake. The new company will be led by Dr. Friedman and the current Scorpion management team.

Positive

• Potential to address 30-40% of hormone-positive breast cancer market
• Acquisition includes a promising Phase 1/2 clinical trial asset
• Treatment shows potential for better disease control and improved tolerability
• Strategic expansion of Lilly's oncology pipeline

Negative

• High acquisition cost of up to $2.5 billion
• Success dependent on pending clinical trial results
• Treatment still in early development phases

Insights

Biotech M&A Expert

This is a major strategic acquisition for Lilly, valued at up to $2.5 billion, targeting a highly promising oncology asset. STX-478's mutant-selective approach to PI3Kα inhibition represents a potential breakthrough in treating hormone-positive breast cancer, which affects 30-40% of patients. The deal structure is particularly noteworthy - it's effectively an asset purchase allowing Scorpion to spin out its remaining pipeline into a new entity, demonstrating sophisticated deal-making that benefits both parties.

The transaction's value suggests strong confidence in STX-478's potential market position. Current PI3Kα inhibitors face toxicity challenges due to their impact on healthy cells. STX-478's selective targeting could overcome these limitations, potentially capturing significant market share in a growing therapeutic space. For Lilly's oncology portfolio, this adds a complementary asset to their breast cancer franchise.

Oncology Research Analyst

STX-478 represents a significant technological advancement in PI3Kα inhibition. The key differentiator is its mutant-selective mechanism, which specifically targets cancer cells while sparing healthy tissue - a important improvement over existing therapies. This selectivity profile could enable more aggressive dosing and better combination strategies with standard-of-care treatments, potentially improving efficacy without compromising safety.

The clinical implications are substantial. Early-stage positioning of STX-478 could provide better outcomes when the disease burden is lower and more manageable. The once-daily oral administration also offers practical advantages for patient compliance. While Phase 1/2 data will be critical, the molecular design suggests potential for superior therapeutic window compared to current options.

The acquisition will expand Lilly's oncology pipeline with STX-478, the differentiated and potentially best-in-class, mutant-selective PI3Kα inhibitor currently in a Phase 1/2 clinical trial

STX-478 could potentially address 30-40% of people with hormone-positive breast cancer, building on Lilly's advancements against this disease

INDIANAPOLIS and BOSTON, Mass., Jan. 13, 2025 /PRNewswire/ -- Eli Lilly and Company (NYSE: LLY) and Scorpion Therapeutics, Inc. ("Scorpion"), a private biotechnology company developing small molecule precision oncology therapies, today announced a definitive agreement for Lilly to acquire Scorpion's PI3Kα inhibitor program STX-478. STX-478 is a once-daily oral, mutant-selective PI3Kα inhibitor currently being evaluated in a Phase 1/2 clinical trial for breast cancer and other advanced solid tumors.  

STX-478 could represent the next generation of PI3Kα targeting agents by selectively targeting the pathway in cancerous but not healthy cells, thus overcoming a key limitation of currently available medicines that target the PI3Kα pathway. This approach could potentially offer better disease control through deeper pathway inhibition, as well as improved tolerability.

"PI3Kα mutations occur in a meaningful proportion of hormone-positive breast cancers, and there is significant unmet need for new treatment options that effectively and safely target this pathway," said Jacob Van Naarden, executive vice president and president of Lilly Oncology. "The selectivity profile of STX-478 has led to a differentiated clinical profile, enabling use in combinations with standard-of-care therapies to potentially deliver meaningful impact in earlier treatment settings when there is the best opportunity to improve outcomes for patients. We look forward to leveraging the great work of the Scorpion team to date, along with Lilly's deep expertise in breast cancer, to further advance STX-478 with speed and focus."

Under the terms of the agreement, Lilly will acquire Scorpion and Scorpion shareholders could receive up to $2.5 billion in cash, inclusive of an upfront payment and subsequent payments upon achievement of certain regulatory and sales milestones. Additionally, as part of the transaction, Scorpion will spin out a new entity to hold its employees and non-PI3Kα pipeline assets. The new, independent company would be owned by Scorpion's current shareholders with Lilly holding a minority equity interest. The new company will be led by Dr. Friedman and members of the current Scorpion management team and will focus on discovering and delivering a portfolio of precision medicines to patients, accelerated by Scorpion's discovery capabilities and non-PI3Kα pipeline of medicines.

"Lilly has advanced scientific breakthroughs for some of the most difficult-to-treat cancers," said Adam Friedman, M.D., Ph.D., president and chief executive officer of Scorpion. "We believe Lilly's global capabilities and strategic commitment to patients with breast cancer will accelerate our goal of developing STX-478 to improve outcomes for the many patients with solid tumors driven by PI3Kα mutations. This acquisition is a testament to the expertise of the Scorpion team and our drug discovery capabilities, which will become the foundation of our new company."

The transaction is subject to customary closing conditions. Lilly will determine the accounting treatment of this transaction in accordance with Generally Accepted Accounting Principles (GAAP) upon closing. This transaction will thereafter be reflected in Lilly's financial results and financial guidance.

For Lilly, Citi is acting as exclusive financial advisor and Ropes & Gray LLP is acting as legal counsel. For Scorpion, Centerview Partners LLC is acting as lead financial advisor with additional financial advisory from Morgan Stanley, and Kirkland & Ellis LLP is acting as legal counsel.

About Scorpion Therapeutics
Scorpion is a clinical-stage, precision oncology company developing transformational targeted therapies for patients with cancer. We have built proprietary and fully-integrated discovery capabilities leveraging the most advanced technologies across cancer biology, medicinal chemistry and data sciences. Scorpion's current pipeline, led by STX-478, our mutant-selective PI3Kα program, consists of three internally discovered clinical product candidates and multiple discovery-stage programs. Our focus is on solving current gaps in therapeutic options for patients with cancer by discovering and developing product candidates selective against well-validated, previously undruggable targets to improve patient outcomes.

About Lilly 
Lilly is a medicine company turning science into healing to make life better for people around the world. We've been pioneering life-changing discoveries for nearly 150 years, and today our medicines help tens of millions of people across the globe. Harnessing the power of biotechnology, chemistry and genetic medicine, our scientists are urgently advancing new discoveries to solve some of the world's most significant health challenges: redefining diabetes care; treating obesity and curtailing its most devastating long-term effects; advancing the fight against Alzheimer's disease; providing solutions to some of the most debilitating immune system disorders; and transforming the most difficult-to-treat cancers into manageable diseases. With each step toward a healthier world, we're motivated by one thing: making life better for millions more people. That includes delivering innovative clinical trials that reflect the diversity of our world and working to ensure our medicines are accessible and affordable. To learn more, visit Lilly.com and Lilly.com/news, or follow us on Facebook, Instagram, and LinkedIn. C-LLY

Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) about the benefits of Lilly's acquisition of Scorpion and Scorpion's product candidate for oncology, and reflects Lilly's current beliefs and expectations. However, as with any such undertaking, there are substantial risks and uncertainties in implementing the acquisition and in the process of drug research, development, and commercialization. Among other things, there can be no guarantee that Lilly will realize the expected benefits of the acquisition, that the acquisition will achieve the results discussed in this release or that the acquisition will yield commercially successful products. For further discussion of these and other risks and uncertainties that could cause actual results to differ from Lilly's expectations, see Lilly's Form 10-K and Form 10-Q filings with the United States Securities and Exchange Commission. Except as required by law, Lilly undertakes no duty to update forward-looking statements to reflect events after the date of this release.

Refer to:	Lauren Cohen; cohen_lauren@lilly.com; 617-678-2067 (Lilly Media)
	Michael Czapar; czapar_michael_c@lilly.com; 317-617-0983 (Investors)
	Emily Anderson; emily@scorpiontx.com  (Scorpion Media)

 

 

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SOURCE Eli Lilly and Company

FAQ

What is the value of Lilly's (LLY) acquisition of Scorpion Therapeutics' PI3Kα program?

Lilly will pay up to $2.5 billion in cash, including upfront payment and subsequent regulatory and sales milestone payments.

What percentage of breast cancer patients could potentially benefit from STX-478?

STX-478 could potentially address 30-40% of people with hormone-positive breast cancer.

What is the current development stage of STX-478 acquired by Lilly (LLY)?

STX-478 is currently in Phase 1/2 clinical trials for breast cancer and other advanced solid tumors.

How will Scorpion Therapeutics' remaining assets be managed after Lilly's (LLY) acquisition?

Scorpion will spin out a new independent entity to hold its employees and non-PI3Kα pipeline assets, with Lilly maintaining a minority equity stake.

What are the key advantages of STX-478 over current PI3Kα treatments?

STX-478 selectively targets cancerous cells while sparing healthy ones, potentially offering better disease control through deeper pathway inhibition and improved tolerability.