Dicerna Pharmaceuticals Inc. (NASDAQ: DRNA) and Eli Lilly and Co. (NYSE: LLY) are partnering up in a global licensing and research collaboration focused on the discovery, development and commercialization of potential new medicines in the areas of cardio-metabolic disease, neurodegeneration and pain.

These companies will utilize Dicerna’s proprietary GalXC RNAi technology platform to progress new drug targets toward clinical development and commercialization. In addition, the partners will collaborate to move beyond the current technical paradigm in order to generate next-generation oligonucleotide therapeutic agents.

RNA interference (RNAi) is an emerging new approach to drug discovery, focused on a biologic process in which certain RNA molecules inhibit the expression of disease-causing genes by destroying the messenger RNAs (mRNAs) of those genes.

Under the terms of the agreement, Dicerna will receive an upfront payment of $100 million, as well as an equity investment of $100 million at a premium. Dicerna is also eligible to receive up to approximately $350 million per target in development and commercialization milestones, as well as tiered royalties ranging from the mid-single to low-double digits on product sales. Dicerna will work exclusively with Eli Lilly in the neurodegeneration and pain fields, and on select targets in cardio-metabolic diseases. The two companies anticipate collaborating on more than ten targets.

Daniel M. Skovronsky, M.D., Ph.D., Eli Lilly senior vice president and chief scientific officer, commented:

At Lilly, we go to where breaking science meets unmet medical needs. We are excited to collaborate with Dicerna and utilize their RNAi expertise to study targets that up until now have proven to be very technically challenging. RNAi has the potential to treat an array of diseases that are of strategic importance to Lilly. Together with Dicerna, we aim to employ this emerging modality for greater success in drug development.

Shares of Dicerna were last seen up about 21% at $15.70, with a consensus analyst price target of $18.86 and a 52-week trading range of $5.16 to $17.98.

Eli Lilly traded at $106.39 a share, in a 52-week range of $73.69 to $116.61. The consensus price target is $112.06.

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