Eli Lilly Is Getting Into the Hearing Loss Market in a $1.12 Billion Deal With Seamless Therapeutics

Much of Eli Lilly's (NYSE: LLY) recent popularity as a stock is due to its obesity drug Zepbound. While it's understandable that investors are excited about how quickly and effectively the company has become a powerhouse in the hot weight loss segment, it's also quietly building its presence in another high-potential healthcare niche. This is genetic medicine, which harnesses technology that uses the body's DNA to diagnose and treat health issues.

It was announced recently that Lilly had entered into a collaboration and licensing deal with biotech Seamless Therapeutics to develop medicines targeting hearing loss disorders. Let's take a brief look at this deal and determine whether it can be beneficial for Lilly stock.

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Tools of the trade

Germany-based Seamless is a producer of programmable recombinases -- proteins and enzymes that can be used as molecular "tools" to edit DNA. These are essentially used to repair the genetic mutations that are frequently the cause of disease. They do their work outside the native mechanisms cells use to fix themselves.

Near the end of January, Seamless announced a partnership with Lilly, under which the former will design and program recombinases for hearing loss. Lilly is to receive an exclusive license to those recombinases to develop them into commercialized drugs.

The American pharmaceutical company is on the hook for more than $1.12 billion in payments under this partnership; an undisclosed portion is an up-front payment, with the remainder based on developmental and commercial milestones that have not been made public.

In its press release trumpeting the deal, Seamless quoted CEO Albert Seymour as saying, "Lilly is invested in advancing novel treatment approaches for genetic diseases and shares our vision of bringing genetic medicines to patients who currently have limited treatment options."

Capital to spend

This shows clearly that Lilly is continuing to expand its already considerable presence in the genetic medicines segment. Last July, it closed a $1.3 billion deal to acquire Verve Therapeutics. That once-independent company is a developer of gene-editing therapies for heart disorders.

Lilly's stock didn't pop on the Seamless news. I feel this is because genetic medicine is still a rather nascent segment of the massive healthcare industry. Although medicines developed with such therapies have hit the market, there hasn't been a blockbuster drug developed and commercialized via this method.

I feel there undoubtedly will be, whether it's an atherosclerosis (clogged arteries) drug developed by Verve or a powerful hearing loss treatment developed with Seamless' recombinases. Lilly is smart to pour capital into such ventures, and with its bulging coffers (it held nearly $9.8 billion in cash alone at the end of September 2025), it has the financial firepower to do so.

Given that, I would view Seamless, together with other gene medicine plays, as a smart move by Lilly management. It gives this powerful pharmaceutical company even more potential.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.