- Eli Lilly needed some good news on the neurological drug front since the failure of its Alzheimer's candidate, solanezumab, late last year. The company got some on Wednesday, announcing it would acquire CoLucid Pharmaceuticals and take on the company's late-stage migraine treatment.
- The big pharma will acquire all of CoLucid shares for $46.50 a pop, or about $960 million in total. Shares of the clinical-stage company traded at $34.90 at market close Tuesday.
- Founded in 2005, CoLucid has one molecule under investigation, lasmiditan. The company is developing the drug in an oral and intravenous (IV) form. The oral version has completed one pivotal Phase 3 trial, with the results of another expected later this year.
Eli Lilly was the original developer for lasmiditan, licensing it out to CoLucid in 2005. Bringing it home will strengthen the company's pain management portfolio, according to a Jan. 18 statement, and could beef up neurological drug revenues, which were $708.5 million during the third quarter — a 2% decline from the same period in 2015.
"We are excited that lasmiditan will be back at Lilly, where it was originally discovered, for the conclusion of Phase 3 development and potential commercialization," CoLucid CEO Thomas Mathers said in the statement. "We are proud of the work that CoLucid has done to develop lasmiditan, and we believe Lilly's expertise in pain and commitment to innovation are a natural fit to potentially bring this medicine to patients."
Among adults aged 18 to 65, as many as 75% worldwide have reported a headache in the last year, and at least 30% of those people experienced migraine, according to estimates from the World Health Organization.
Eli Lilly plans to pay for the deal with cash only. The company will still have plenty left over, however, as it maintained $3.49 billion in cash and cash equivalents as of Sept. 30. Still, the transaction will result in an $850 million research and development charge in the first quarter, which will lower 2017 earnings per share guidance, according to the Jan. 18 statement.
The deal is expected to close before March 31.