Health and Healthcare

How This Dermira Acquisition Will Round Out Eli Lilly

xrrr / iStock

Dermira Inc. (NASDAQ: DERM) shares made a handy gain to close out the week after it was announced that Eli Lilly and Co. (NYSE: LLY) would be acquiring the firm. The transaction is expected to close by the end of the first quarter and is subject to customary closing conditions, regulatory approvals and the tender of a majority of the outstanding shares of Dermira’s common stock.

Under the terms of the deal, Dermira shareholders will receive $18.75 per share in cash for a total consideration for $1.1 billion. This is an all-cash transaction.

The purchase price represents a premium of roughly 86% to the 60-day volume-weighted average trading price of Dermira’s stock ending on January 9, 2020.

The acquisition will expand Lilly’s immunology pipeline with the addition of lebrikizumab, which is being evaluated in a Phase 3 clinical development program for the treatment of moderate-to-severe atopic dermatitis in adolescent and adult patients. Lebrikizumab was previously granted Fast Track designation from the U.S. Food and Drug Administration (FDA) in December 2019.

Also, this acquisition will expand Lilly’s portfolio of marketed dermatology medicines with the addition of Qbrexza (glycopyrronium) cloth, a medicated cloth approved by the FDA for the topical treatment of primary axillary hyperhidrosis (uncontrolled excessive underarm sweating).

Patrik Jonsson, Eli Lilly senior vice president and president of Lilly Bio-Medicines, commented:

People suffering from moderate-to-severe atopic dermatitis have significant unmet treatment needs, and we are excited about the potential that lebrikizumab has to help these patients. The acquisition of Dermira is consistent with Lilly’s strategy to augment our own internal research by acquiring clinical phase assets in our core therapeutic areas and leveraging our development expertise and commercial infrastructure to bring new medicines to patients. This acquisition provides an opportunity to add a promising Phase 3 immunology compound for atopic dermatitis, while also adding an approved dermatology treatment for primary axillary hyperhidrosis. We look forward to completing the acquisition and continuing Dermira’s excellent work.

Shares of Eli Lilly were last seen trading at $136.73, in a 52-week range of $101.36 to $137.61. The consensus price target is $133.08.


Want to Retire Early? Start Here (Sponsor)

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.