Eli Lilly Considering Acquisition of Three Vaccine Developers for up to $4 Billion

According to The Wall Street Journal, Eli Lilly has agreed to acquire three vaccine developers, Curevo, LimmaTech Biologics, and Vaccine Co., with the total value of the three deals reaching nearly $4 billion. The transactions are expected to be officially announced later on May 26th, marking the weight loss drug leader's return to the infectious disease vaccine field.

The three acquisitions focus on herpes zoster, Staphylococcus aureus, and Epstein-Barr virus (EBV), respectively. Eli Lilly's Chief Scientific and Product Officer, Daniel Skovronsky, stated that if the acquisition projects progress smoothly, vaccines could become one of the company's new core directions, alongside diabetes, obesity, cancer, immunology, and neurodegenerative diseases.

The two highest-valued deals are with Curevo and Vaccine Co. Eli Lilly will pay up to $1.5 billion in cash for Curevo, which includes an undisclosed upfront payment and subsequent payments tied to clinical milestones. Curevo's herpes zoster vaccine in development has completed mid-stage clinical trials. Skovronsky believes that the vaccine has the potential to significantly reduce side effects while maintaining high efficacy. If the subsequent Phase III trials are successful and regulatory approval is obtained, commercialization will still take several years.

Vaccine Co.'s highest transaction amount is $1.55 billion. The company's EB virus vaccine aims to prevent infectious mononucleosis and may reduce the long-term risk of multiple sclerosis. Currently, there are no approved EB virus vaccines available.

Eli Lilly is also set to acquire LimmaTech Biologics for up to $780 million, with payments including upfront and clinical and regulatory milestone payments. LimmaTech focuses on bacterial pathogen vaccines, and its core asset is the Staphylococcus aureus vaccine. The vaccine is mainly used for hospital infection prevention, and if the trials are successful, it can be administered before surgery to patients to reduce the risk of infection. Currently, no Staphylococcus aureus vaccine has been approved worldwide.

This is not Eli Lilly's first foray into the infectious disease field. The company historically owned early polio vaccines and COVID-19 antibody products, but in recent years, this area has not been a strategic focus. The re-entry into vaccine layout coincides with a significant strengthening of the company's cash flow. Benefiting from the strong sales of GLP-1 drugs Zepbound (for weight loss) and Mounjaro (for diabetes), Eli Lilly has recently made several acquisitions of biotechnology companies focused on cancer, sleep disorders, and autoimmune diseases, with all deals valued at less than $10 billion.