Eli Lilly and Co (NYSE:LLY) announced on Friday that it will buy privately held drug developer Versanis for up to $1.93 billion, in a bid to improve its portfolio of obesity drugs.
Under the terms of the deal, Versanis shareholders could receive $1.93 billion in cash, which includes an upfront payment and subsequent payments upon achieving certain development and sales milestones.
Bimagrumab, Versanis's lead drug, is being evaluated in a mid-stage trial alone as well as in combination with Novo Nordisk (NYSE:NVO)'s Wegovy or semaglutide in adults who are overweight or obese, Reuters reported.
The media outlet noted that Wegovy belongs to a class of drugs known as incretins that are designed to mimic the action of the GLP-1 hormone, which helps regulate blood sugar, slow stomach emptying and decrease appetite.
Versanis said bimagrumab acts directly on fat cells without reducing appetite and without prompting lean mass loss.
The company added that combining incretins with bimagrumab has the potential to further reduce fat mass, while preserving muscle mass and may lead to better outcomes for people living with obesity and obesity-related complications.
Shares of Eli Lilly rose 3% to $447.05 in early Friday trading and have gained 23% year to date.
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