Eli Lilly to acquire Scorpion Therapeutics’ mutant-selective PI3Kα inhibitor program

Eli Lilly and Company and Scorpion Therapeutics, a private biotechnology company developing small molecule precision oncology therapies, 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 tumours.  

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 VP and president, 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.”

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.

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 is acting as legal counsel. For Scorpion, Centerview Partners is acting as lead financial advisor with additional financial advisory from Morgan Stanley, and Kirkland & Ellis is acting as legal counsel.