Eli Lilly Collaborating with California Firm on Therapeutics

Eli Lilly Collaborating with California Firm on Therapeutics

Eli Lilly and Company (NYSE: LLY) and Lycia Therapeutics, Inc. announced a multi-year research collaboration and licensing agreement focused on the discovery, development, and commercialization of novel targeted therapeutics using Lycia’s proprietary lysosomal targeting chimera, or LYTAC, protein degradation technology.

Lycia uses its next-generation degradation approach to target the untapped extracellular proteome, including cell surface receptors and secreted proteins. The LYTAC platform may enable the development of several therapeutic modalities, including antibodies and small molecules, with the potential to inhibit many targets previously considered intractable across a spectrum of therapeutic areas and diseases.

Under the terms of the agreement, the companies will utilize Lycia’s LYTAC platform to discover and develop novel degraders for up to five targets that aim to address key unmet medical needs in Lilly’s therapeutic areas of focus, including immunology and pain. Lilly will be solely responsible for preclinical and clinical development of candidates and receives an exclusive worldwide license to commercialize potential medicines resulting from the agreement.

“This collaboration with Lycia furthers Lilly’s strategy to utilize innovative new technology to treat challenging disease areas, such as immunology and pain,” said Ajay Nirula, M.D., Ph.D., vice president of immunology at Lilly. “We believe Lycia’s technology may allow us to develop targeted therapeutics that were not previously feasible and make advances for patients in areas of high unmet need.”

“We are extremely pleased to establish this strategic collaboration with Eli Lilly, a global leader in therapeutic innovation,” said Aetna Wun Trombley, Ph.D., President and CEO of Lycia. “With our differentiated LYTAC platform for targeted extracellular protein degradation, we look forward to collaborating with Lilly to advance novel therapies against challenging targets in underserved disease areas while we simultaneously advance our in-house pipeline of first-in-class LYTAC-based therapeutics.”

Lycia will receive an upfront payment of $35 million. The company is also eligible to receive over $1.6 billion in potential milestone payments based on the achievement of prespecified preclinical, development and commercial milestones, as well as tiered royalties from mid-single to low double-digits on sales resulting from the agreement.

This transaction will be reflected in Lilly’s reported results and financial guidance according to Generally Accepted Accounting Principles (GAAP). There will be no change to Lilly’s 2021 non-GAAP earnings per share guidance as a result of this transaction.

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