The acquisition would add Disarm's axonal degeneration therapies to expand Lilly's pain and neurodegeneration capabilities
Eli Lilly and Company (Lilly) has agreed to acquire Disarm Therapeutics, a biotechnology firm developing advanced disease-modifying drugs for axonal degeneration.
Axonal degeneration is a common, yet unaddressed, pathology in a wide range of neurological diseases and is known to cause severe sensory, motor, and cognitive symptoms.
Under the terms of the acquisition agreement, Lilly is expected to make an upfront payment of $135m to Disarm Therapeutics.
The biotechnology firm’s equity-holders may be eligible to receive an additional up to $1.225bn in future payments, based on the development, regulatory and commercial milestones.
Lilly pain and neurodegeneration research vice president Mark Mintun said: “Lilly continues to seek medicines to treat the debilitating pain and loss of function associated with nerve damage.
“The scientific team at Disarm discovered an important and highly promising approach to combat axonal degeneration. We will move quickly to develop their SARM1 inhibitors into potential medicines for peripheral neuropathy and neurological diseases, such as ALS and multiple sclerosis.”
Disarm discovered novel SARM1 inhibitors to treat neurological diseases
The biotech firm has discovered novel SARM1 inhibitors and advanced them in preclinical development, to deliver breakthrough treatments for patients with neurological diseases including amyotrophic lateral sclerosis (ALS) and multiple sclerosis.
Disarm’s scientific founders discovered that the SARM1 protein is a central driver of axonal degeneration. Disarm’s SARM1 inhibitors are designed to directly prevent the loss of axons.
Lilly is expected to expand its pain and neurodegeneration capabilities, with the addition of Disarm’s SARM therapies for axonal degeneration.
Also, the transaction is expected to reflect in Lilly’s reported results and financial guidance, under Generally Accepted Accounting Principles (GAAP), and will not impact its 2020 non-GAAP earnings per share guidance.
Aquilo Partners served as financial advisor and WilmerHale as legal advisor to Disarm for the transaction.
Disarm CEO Alvin Shih said: “Disarm’s innovative approach to treating axonal degeneration holds tremendous promise for addressing a wide spectrum of neurological diseases, and we have made significant strides toward enabling potentially transformative therapies.
“Lilly is ideally suited to advance this exciting new approach to treating axonal degeneration, and we look forward to seeing patients benefit from the work that Disarm initiated.”