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The pharmaceutical giant announced Tuesday it has agreed to acquire three vaccine development companies in deals worth a combined total of nearly $4 billion in cash, marking a significant push into infectious disease prevention as the company looks to diversify beyond its enormously profitable weight loss franchise.
Lilly shares edged up as much as 1.6% in premarket trading on the news.
The three targets are Curevo, LimmaTech Biologics and Vaccine Co. Curevo shareholders stand to receive up to $1.5 billion, including an upfront payment and a subsequent milestone-based payment. The company is developing a vaccine aimed at preventing shingles in adults.
LimmaTech, which is working on vaccines against bacterial pathogens, will be acquired for up to $780 million in cash, again structured as an upfront payment with additional sums tied to the achievement of specified milestones.
The largest of the three deals involves Vaccine Co, which is developing a vaccine against the Epstein-Barr virus, a highly common and contagious infection. Lilly has agreed to pay up to $1.55 billion for that company, inclusive of upfront and potential clinical and commercial milestone payments.
Together the three acquisitions signal a deliberate shift in strategy for one of the world's most valuable drugmakers.
"These acquisitions reflect a deliberate strategy to prevent disease at its source rather than treat its consequences," said Daniel Skovronsky, Lilly's chief scientific and product officer, in a statement Tuesday.
The deals are the latest in a string of acquisitions Lilly has pursued on the back of surging revenues from its obesity and diabetes drug portfolio, which has generated enormous cash flows and sent the company's valuation soaring in recent years. The company has been steadily expanding into new therapeutic areas, and the vaccine push represents one of its most ambitious moves into a field it has not historically dominated.
The Wall Street Journal first reported the deals earlier Tuesday.
