What happened
Shares of Dice Therapeutics (DICE) were up more than 37% early Tuesday morning after the healthcare company announced it was being bought out by pharmaceutical company Eli Lilly (LLY 1.19%). Dice's shares are up more than 48% this year.
So what
Dice is a clinical-stage biotech company that uses its proprietary Delscape platform to produce therapies to treat chronic autoimmune disorders. The move helps shore up a weakness for Eli Lilly, allowing it to expand beyond its stronger obesity and diabetes franchises. Lilly's global reach and its marketing and manufacturing prowess will help deliver Dice's drugs to market. Lilly's shares were up nearly 2% on the news. Dice has six programs in its pipeline, including two oral IL-17 inhibitors, DC-806 and DC-853, in trials to treat psoriasis and other chronic immunology indications. The idea is that by blocking the pathway for the pro-inflammatory signaling molecule IL-17, Lilly's therapies can be effective for a number of inflammatory conditions.
Now what
In the $2.4 billion deal, Lilly will pay $48 a share for Dice's shares, a premium of 40% over what the company's shares closed at last week. It's likely, then, that Dice's shares will continue to rise a bit. The deal is not subject to any financing agreement and is expected to be completed in the third quarter of the year. Dice had, as of the first quarter, $554.5 million in cash, enough, it said at the time, to fund operations into 2026. It didn't have any revenue and lost $25.6 million in the first quarter.
