Eli Lilly and Company (NYSE: LLY) has signed a worldwide collaboration and exclusive licensing agreement with Abbisko Therapeutics Co., Ltd., a subsidiary of Abbisko Cayman Limited.
Through the partnership, the companies will focus on the discovery, growth, and potential commercialization of novel molecules against an undisclosed target for cardiometabolic diseases. The research will combine Abbisko’s proprietary drug discovery platform with Eli Lilly’s disease and discovery expertise.
Terms of the Agreement
As per the terms of the deal, pre-conditioned milestone payments worth $258 million will be made to Abbisko. That’s in addition to tiered royalties on sales, following clinical development and commercialization by Eli Lilly and vice-versa.
Per the terms, each party has equal rights to fully leverage both companies’ existing compounds, platforms, and technologies to provide ample treatment options globally.
Official Comments
The CEO of Abbisko, Dr. Yao-Chang Xu, said, “During the past five years, Abbisko Therapeutics has established a world-class discovery engine with a proprietary platform that has delivered ten drug candidates including four already in clinical trials. We are excited to leverage this platform to collaborate with Lilly on this truly novel R&D collaboration to develop innovative medicines against a critical drug target. This collaboration could significantly expand our pipeline and strengthen our capabilities as we strive to bring novel therapies to patients and their families.”
Analysts’ Recommendations
Recently, Mizuho Securities analyst Vamil Divan maintained a Buy rating on Eli Lilly and increased the price target to $302 (23.71% upside potential) from $272.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 9 Buys and 4 Holds. The average Eli Lilly price target of $294.69 implies 20.72% upside potential to current levels. Shares have gained 24.9% over the past year.
Success in the companies’ endeavors is likely to boost investors’ confidence in the healthcare sector.
News Sentiment
News Sentiment for Eli Lilly is currently positive, based on 45 articles over the past seven days. 83% of the articles on LLY have a Bullish sentiment, compared to a sector average of 56%, while 17% are Bearish, compared to a sector average of 44%.
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