STX-478 is a once-daily oral, mutant-selective PI3Kα inhibitor currently being evaluated in a Phase 1/2 clinical trial for breast cancer and other advanced solid tumors. Photo courtesy of Lilly.

News Release

INDIANAPOLIS — Eli Lilly and Company and Scorpion Therapeutics, Inc., a private biotechnology company developing small molecule precision oncology therapies, announced on Jan. 13 a definitive agreement for Lilly to acquire Scorpion’s PI3Kα inhibitor program STX-478.

STX-478 could represent the next generation of PI3Kα targeting agents by selectively targeting the pathway in cancerous but not healthy cells, thus overcoming a key limitation of currently available medicines that target the PI3Kα pathway. This approach could potentially offer better disease control through deeper pathway inhibition, as well as improved tolerability.

“PI3Kα mutations occur in a meaningful proportion of hormone-positive breast cancers, and there is significant unmet need for new treatment options that effectively and safely target this pathway,” said Jacob Van Naarden, executive vice president and president of Lilly Oncology. “The selectivity profile of STX-478 has led to a differentiated clinical profile, enabling use in combinations with standard-of-care therapies to potentially deliver meaningful impact in earlier treatment settings when there is the best opportunity to improve outcomes for patients. We look forward to leveraging the great work of the Scorpion team to date, along with Lilly’s deep expertise in breast cancer, to further advance STX-478 with speed and focus.”

Under the terms of the agreement, Lilly will acquire Scorpion and Scorpion shareholders could receive up to $2.5 billion in cash, inclusive of an upfront payment and subsequent payments upon achievement of certain regulatory and sales milestones. Additionally, as part of the transaction, Scorpion will spin out a new entity to hold its employees and non-PI3Kα pipeline assets. The new, independent company would be owned by Scorpion’s current shareholders with Lilly holding a minority equity interest. The new company will be led by Dr. Friedman and members of the current Scorpion management team and will focus on discovering and delivering a portfolio of precision medicines to patients, accelerated by Scorpion’s discovery capabilities and non-PI3Kα pipeline of medicines.

“Lilly has advanced scientific breakthroughs for some of the most difficult-to-treat cancers,” said Adam Friedman, M.D., Ph.D., president and chief executive officer of Scorpion. “We believe Lilly’s global capabilities and strategic commitment to patients with breast cancer will accelerate our goal of developing STX-478 to improve outcomes for the many patients with solid tumors driven by PI3Kα mutations. This acquisition is a testament to the expertise of the Scorpion team and our drug discovery capabilities, which will become the foundation of our new company.”

The transaction is subject to customary closing conditions. Lilly will determine the accounting treatment of this transaction in accordance with Generally Accepted Accounting Principles upon closing. This transaction will thereafter be reflected in Lilly’s financial results and financial guidance.

For Lilly, Citi is acting as exclusive financial advisor and Ropes and Gray LLP is acting as legal counsel. For Scorpion, Centerview Partners LLC is acting as lead financial advisor with additional financial advisory from Morgan Stanley, and Kirkland and Ellis LLP is acting as legal counsel.