Eli Lilly to acquire biotech firm in deal that could grow to more than $1.3B

Eli Lilly and Co. on Thursday announced that it has agreed to acquire Disarm Therapeutics, a private biotechnology company that is developing therapies that could be used to treat multiple sclerosis, glaucoma, Alzheimer’s disease and ALS.

Indianapolis-based Lilly said it would make an upfront payment of $135 million to acquire the 4-year-old Cambridge, Massachusetts-based firm, but it could be responsible for an additional $1.23 billion in payments if Disarm reaches other milestones that help Lilly develop and commercialize new medicines.

Disarm is working to develop disease-modifying therapeutics to prevent axonal degeneration. Axonal degeneration is a common, yet unaddressed, pathology in a broad range of common neurological diseases. It is known to cause severe sensory, motor and cognitive symptoms.

“Lilly continues to seek medicines to treat the debilitating pain and loss of function associated with nerve damage,” said Dr. Mark Mintun, vice president of pain and neurodegeneration research at Lilly, in written remarks. “The scientific team at Disarm discovered an important and highly promising approach to combat axonal degeneration. We will move quickly to develop their SARM1 inhibitors into potential medicines for peripheral neuropathy and neurological diseases, such as ALS and multiple sclerosis.”

Disarm was founded by Atlas Venture snd Dr. Jeffrey Milbrandt and Dr. Aaron DiAntonio of Washington University School of Medicine in St Louis. Lightstone Ventures and AbbVie Ventures later joined Atlas to provide additional scientific and financial support.

“Lilly is ideally suited to advance this exciting new approach to treating axonal degeneration, and we look forward to seeing patients benefit from the work that Disarm initiated,” said Disarm CEO Alvin Shih in written comments.

Lilly shares slipped 1.1% on Thursday, to $146.78 each.