Lilly taking sting out of Scorpion in $2.5bn cancer drug buyLilly taking sting out of Scorpion in $2.5bn cancer drug buy

Eli Lilly kicked off the JP Morgan (JPM) Healthcare conference by announcing it had agreed to acquire Scorpion Tx, a company focused on developing small molecule oncology therapies. The deal will see Lilly add lead program STX-478 to its oncology pipeline.

The PI3Kα inhibitor is a once-daily oral pill being studied in a Phase I/II clinical trial for breast cancer and other advanced solid tumors, and is said to have the potential to address 30-40% of patients with hormone-positive breast cancer.

"PI3Kα mutations occur in a meaningful proportion of hormone-positive breast cancers, and there is significant unmet need for new treatment options that effectively and safely target this pathway," said Jacob Van Naarden, executive vice president and president of Lilly Oncology.

"The selectivity profile of STX-478 has led to a differentiated clinical profile, enabling use in combinations with standard-of-care therapies to potentially deliver meaningful impact in earlier treatment settings when there is the best opportunity to improve outcomes for patients. We look forward to leveraging the great work of the Scorpion team to date, along with Lilly's deep expertise in breast cancer, to further advance STX-478 with speed and focus."

Multinational Lilly’s financials have been dominated by its weight loss and diabetes products of late, with GLP-1s Mounjaro and Zepbound (both tirzepatide) expected to pull in $5.4 billion in Q4 2024, representing roughly 40% of total revenue. However, CEO Dave Ricks told investors at JPM the firm’s plan is to “build out the rest of the portfolio,” focusing specifically on oncology and immunology. The Scorpion acquisition therefore fits in this strategy.

As part of the deal, worth up to $2.5 billion, Lilly will also spin out Scorpion’s non-PI3Kα assets in a new company. Scorpion’s current shareholders will own the newly created independent company and focus on finding and advancing a portfolio of precision medicines to patients. However, Lilly will hold a minority equity interest.