Eli Lilly to Expand Pain Pipeline With $1B SiteOne Buyout Offer

Eli Lilly LLY recently announced that it has entered into a definitive agreement to acquire the privately held clinical-stage company SiteOne Therapeutics in a deal valued at $1 billion.

Through this acquisition, LLY intends to strengthen its neuroscience pipeline and advance non-opioid medicines for pain management. Once the deal is closed, the company will add SiteOne’s lead asset, STC-004, to its pipeline. This investigational phase II-ready drug belongs to a class of drugs called Nav1.8 inhibitors that block the channels involved in transmitting pain signals. This approach intends to replace the highly addictive opioid-based medications.

In February, SiteOne announced positive results from an early-stage study on STC-004, which showed that the drug was safe and well-tolerated at all dose levels while also improving pain tolerance.

The deal will also add other investigational drugs to LLY’s pipeline, which are being developed to treat pain, cough and other conditions involving hyperexcitability of the peripheral nervous system.

Though Eli Lilly did not provide a breakdown of the financial details of the deal, it did mention that the sum of $1 billion is inclusive of upfront and milestone payments.

Founded in 2010, SiteOne has been garnering interest from big pharma for its non-opioid pipeline. Toward the end of last year, it closed a $100 million funding round led by Novo Holdings, the parent company of pharma giant Novo Nordisk NVO. SiteOne also has a partnership with Vertex Pharmaceuticals VRTX, signed in 2022, to advance NaV1.7 inhibitors for the treatment of pain.

LLY Stock’s Performance

As seen in the chart below, Eli Lilly’s shares are in line with the industry in the year-to-date period.

How Does the SiteOne Buyout Benefit LLY?

The transaction seems to be a strategic fit for Eli Lilly, which is advancing multiple pain candidates like SSTR4 agonist mazisotine, P2X7 inhibitor LY3857210 and epiregulin antibody LY3848575 across separate mid-stage studies. The addition of STC-004 is likely to diversify the company’s existing non-opioid pain pipeline.

Notably, the mechanism utilized by STC-004 was validated earlier this year when the FDA approved Vertex Pharmaceuticals’ Journavx — also a Nav1.8 inhibitor — for treating adults with moderate-to-severe acute pain. Following this approval, the VRTX drug is the first and only non-opioid oral pain signal inhibitor and also the first new class of pain medicine to be approved in more than 20 years.

The deal also benefits SiteOne as it lacks the commercial infrastructure and expertise needed to bring a drug to market, areas whereas Eli Lilly is already well established.

Eli Lilly and Company Price

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