Lilly opens the checkbook for another big biotech deal

Making another move to boost its pipeline, Eli Lilly and Co. is preparing to spend more than $600 million in a three-year deal with a New Hampshire biotech that it hopes will lead to development of a new antibody for treating immune diseases.

The deal, announced March 26, could give Lilly another shot at finding new therapies for a huge disease area that includes arthritis, lupus and multiple sclerosis.

Under the terms of the deal, ImmuNext will receive an upfront payment of $40 million from Lilly, and is eligible to receive up to approximately $565 million in development and commercialization milestones, as well as royalties ranging from the mid-single to low double-digits on product sales.

In return, ImmuNext will grant Lilly an exclusive, worldwide license to develop and commercialize “a novel immunometabolism target.” The companies did not identify the target.

Lilly has been pushing hard to boost its product line of immunology medicines to help the body boost its own natural defenses against allergy, cancer, rheumatoid arthritis and other maladies. The company’s immunology product line now includes Olumiant for rheumatoid arthritis and Taltz for plaque psoriasis. But Lilly has more than a dozen immunology compounds in its pipeline for such ailments as stiffening of the spine, dermatitis, ulcerative colitis and Crohn’s disease.

Lilly also has been chasing immunology deals with gusto. Last year, for example, it bought ARMO Biosciences Inc., which is developing compounds that activate the immune system of cancer patients, for $1.6 billion.

Lilly CEO David Ricks said last year that he is looking to boost the company’s pipeline with drug partnerships and acquisitions, especially for compounds in early-stage development. For years, Lilly preferred to develop most of its drugs in-house, but has shown a willingness lately to open its wallet and do big deals. In January, it spent $8 billion to buy a startup drugmaker, Loxo Oncology, that is focusing on cancer drugs.

The latest move, with ImmuNext, will give Lilly its latest shot in the immunology area.

“Immunology is an important area of research for Lilly, and we seek novel targets that could develop into new medicines for patients suffering with autoimmune diseases,” said Dr. Ajay Nirula, Lilly’s vice president of immunology.

ImmuNext, founded in 2012, is located in the Dartmouth-Hitchcock Medical Center in Lebanon, New Hampshire. It focuses on the development of antibodies that target immunology proteins. The private company has signed deals with other big pharmaceutical companies, including Janssen, Roche and Sanofi.