Lilly Strengthens Pipeline With $960M Deal

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The deal is expected to close by the end of the first quarter. The deal is expected to close by the end of the first quarter.

Indianapolis-based Eli Lilly and Co. (NYSE: LLY) is acquiring a Massachusetts biopharmaceutical company in a $960 million deal. Lilly says the deal for CoLucid Pharmaceuticals Inc. (Nasdaq: CLCD) will strengthen its pain management portfolio.

CoLucid is developing an oral treatment for migraines. The drug, called lasmiditan, has completed the first of two Phase 3 trials, with the second expected in the second half of the year. The companies say, if the results are positive, U.S. regulatory approval could come next year.

Lilly Chief Executive Officer David Ricks calls the treatment a "novel, first-in-class molecule that could represent the first significant innovation for the acute treatment of migraine in more than 20 years." The treatment was originally discovered at Lilly and out-licensed to CoLucid in 2005. Since then, the Indianapolis company has reorganized its research and development efforts to focus on pain therapeutics, including for migraine.

CoLucid is also collaborating with Pfizer on the development of tanezumab for the treatment of pain from conditions including osteoarthritis and cancer.

The deal comes about two months after Lilly took a major hit to its pipeline. In November, the company announced it would drop further pursuit of a once-promising potential treatment for Alzheimer's disease. At the time, the company said solanezumab did not achieve "a significant slowing in cognitive decline" for patients compared to placebo. Better news came in December, when the U.S. Food and Drug Administration approved type 2 diabetes treatment Jardiance as a means to reduce the risk of cardiovascular death and and Synjardy XR to help improve blood sugar in adults with type 2 diabetes when used with diet and exercise.

The deal equates to $46.50 per share. It's expected to close by the end of the first quarter.