Why Eli Lilly Shares Are Surging Today

Eli Lilly And Company LLY plans to acquire cardiometabolic diseases drug manufacturer Versanis Bio for up to $1.925 billion in cash, bolstering its product profile of obesity-curbing drugs.

Versanis was founded in 2021 by biotech investment firm Aditum Bio to develop bimagrumab for treating metabolic diseases and obesity. European life sciences investment firm Medicxi invested in the company in August 2021 when it co-led a $70 million Series A financing with Atlas Venture.

The deal value includes an upfront payment (value not mentioned) and subsequent payments upon achieving certain sales milestones that have not been disclosed.

Versanis' bimagrumab drug is currently being assessed in the BELIEVE Phase 2b study in adults who are overweight or obese. 

Also Read: Investors Seek Improved Weight-Loss Drugs: Companies Forge Ahead In Developing Nausea-Free Alternatives To Wegovy

Bimagrumab can reduce fat mass while preserving muscle mass for people with obesity and obesity-related complications, LLY said.

"Lilly is committed to investigating potential new medicines to fight cardiometabolic diseases, including obesity, a chronic disease that affects over 100 million Americans," said Ruth Gimeno, Ph.D., group vice president of diabetes, obesity, and cardiometabolic research at Lilly. 

Earlier this year, Eli Lilly's tirzepatide (10 mg and 15 mg) achieved superior weight loss compared to placebo at 72 weeks of treatment in results from SURMOUNT-2. The trial evaluated 938 adult participants with obesity and type 2 diabetes.

Also Read: Eli Lilly Highlights Weight Loss Data For Tirzepatide In Diabetes Patients 

"By unifying the knowledge and expertise in incretin biology at Lilly with the deep understanding of activin biology at Versanis, we aim to harness the potential benefits of such combinations for patients."

LLY held cash and equivalents of $3.6 billion as of March 31, 2023.

Price Action: LLY shares are trading higher by 2.58% to $445.90 on the last check Friday.