Eli Lilly to expand in obesity drugs with $1.925 billion acquisition of Versanis Bio
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Shares of Eli Lilly & Co (NYSE: LLY) gained nearly 4.0% today after the pharmaceutical behemoth said it will buy Versanis Bio for up to $1.925 billion.
Other financial details are yet to be disclosed
The aforementioned consideration includes both upfront payment and future instalments based on achieving certain milestones, as per the press release.
Eli Lilly did not divulge the financial details of the agreement beyond that. According to its Vice President Ruth Gimeno:
By unifying knowledge and expertise in incretin biology at Lilly with deep understanding of activin biology at Versanis, we aim to harness potential benefits of such combinations for patients.
The New York listed firm is expected to earn $1.96 a share in its current financial quarter versus $1.25 per share a year ago.
Why is Eli Lilly buying Versanis Bio?
Lilly is buying Versanis primarily for its “bimagrumab” – a monoclonal antibody that is currently being tested for obesity both alone as well as in combination with Wegovy (Novo Nordisk).
The market for anti-obesity drugs is estimated to grow at a compound annual rate of 15%. In the press release today, Mark Pruzanski – the Chief Executive of Versanis Bio said:
Lilly is ideally positioned to realise the potential of bimagrumab in combination with its incretin therapies to benefit people living with cardiometabolic diseases.
The merger is subject to meeting customary closing conditions. The stock market news arrives only weeks after Eli Lilly & Co said its retatrutide, in a Phase 2 study, helped reduce weight on average by 24.2% at 48 weeks.
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