INDIANAPOLIS—Taking its innovation-based strategy to heart, Eli Lilly & Co. has signed an agreement to acquire Avid Radiopharmaceuticals Inc., a privately held company developing novel molecular imaging compounds intended for the detection and monitoring of chronic human diseases.
Based in Philadelphia, Avid's lead program in development is florbetapir F 18, a molecular imaging agent under investigation for detecting the presence of amyloid plaque in the brain.
Under the terms of the agreement, Lilly will acquire all outstanding shares of Avid for an upfront payment of $300 million, subject to adjustment based on existing cash on hand at closing. Avid stockholders will also be eligible for up to $500 million in additional payments contingent upon potential future regulatory and commercial milestones for florbetapir.
After the deal is completed, Avid will continue to operate from its facility in Philadelphia, and will provide uninterrupted support for ongoing academic clinical trials, including the Alzheimer's Disease Neuroimaging Initiative (ADNI), as well as ongoing clinical trials for other pharmaceutical companies.
"The acquisition of Avid Radiopharmaceuticals aligns well with Lilly's innovation-based strategy, offers a potential near-term revenue opportunity, leverages our neuroscience expertise and will immediately bolster our diagnostics capabilities," says John Lechleiter, Lilly's chairman and CEO. "We look forward to partnering with Avid's experts during the regulatory process for florbetapir, and are intent on gaining FDA approval for this promising diagnostic intended to help clinicians and researchers identify the presence of beta-amyloid plaque in the brain."
Beta-amyloid plaque is a defining pathology of Alzheimer's disease, a chronic neurodegenerative condition that currently affects more than 5 million Americans. Alzheimer's is a fatal form of dementia that causes progressive decline in memory and other aspects of cognition. It occurs when neurons in the brain begin dying prematurely. Researchers do not know exactly what causes Alzheimer's, but one hypothesis is that the amyloid beta protein plays an important role.
Florbetapir, used with positron emission tomography (PET) technology is being assessed for the ability to detect beta amyloid plaque deposits in living patients. Florbetapir was the first beta amyloid imaging compound to enter multicenter, IND clinical studies in the United States, and has now been studied in more than a dozen trials in over 700 subjects ranging from cognitively normal individuals to those with Alzheimer's dementia.
Jan Lundberg, Lilly's research head, said in an interview with Reuters that the company is pinning its hopes on conducting smarter and cheaper research in-house, while adding in promising compounds from the outside through bolt-on deals.
"We are looking into a number of opportunities," Lundberg said, noting these could range from outright acquisitions to licensing deals to partnering tie-ups with other pharmaceutical companies. "A very high priority would be to get products or late-stage compounds with high quality that could bring in income in the short term before we have the launches of the greater magnitude of the current portfolio."
While the acquisition of Avid doesn't fill a specific void in Lilly's pipeline, it does provide some near-term benefits, according to Judy Kay Moore, a Lilly spokesperson.
"Lilly currently has a pipeline of nearly 70 potential new medicines, the largest in its history," she says. "With that said, florbetapir represents a potential near-term revenue opportunity for Lilly as we continue to innovate and also pursue deals that are in the best interest of patients and our company. If it's approved, this test could be an important diagnostic to help physicians and researchers identify the presence of amyloid beta plaque in living patients."
Moore notes that amyloid beta plaque is a key characteristic Alzheimer's disease, regardless if the amyloid hypothesis is correct or not.
"Because of this, there would be a benefit to patients, their families and their physicians to be able to accurately detect plaques in the brain of living patients," she says.
The acquisition also opens up myriad opportunities for Avid, according to the company's founder and CEO, Dr. Daniel Skovronsky.
"We are very excited to join the great scientific team at Lilly and continue our work to develop new molecular imaging agents capable of changing the medical management of significant chronic human diseases," he says. "We've had a productive and longstanding relationship with Lilly, and believe in their approach to providing improved outcomes for individual patients."
Avid is also developing diagnostic agents for other areas, including Parkinson's disease and diabetes. Lilly has a potential Alzheimer's treatment in late-stage testing and others under development.
The transaction is contingent upon clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions, including requisite approval of Avid stockholders.
