Dicerna Soars After Eli Lilly Invests $100M In Licensing, Research Deal - Eli Lilly and Co (NYSE:LLY)

Dicerna Pharmaceuticals Inc DRN, a biopharma company involving in discovery of subcutaneously delivered RNAi-based therapies, soared in pre-market trading.

What Happened

Eli Lilly And Co LLY announced Monday it entered into a licensing and research collaboration with Dicerna, under which both companies will focus on discovery, development and commercialization drugs for cardio-metabolic diseases as well as for neurodegeneration and pain using the latter's GalXC RNAi technology platform.

The companies will also collaborate to generate next-gen oligonucleotide therapeutic agents.

For licensing its platform, Dicerna stands to receive an upfront payment of $100 million as well as an equity investment of $100 million at a premium. Dicerna is also eligible to receive up to about $350 million per target in development and commercialization milestones as well as tiered royalty of mid-single to low-double digits on product sales.

"The two companies anticipate collaborating on more than ten targets," Eli Lilly said in a press release.

Why It's Important

RNA interference, or RNAi, is a novel approach of using a biologic process in which certain RNA molecules inhibit/suppress the expression of disease-causing genes by destroying the messenger RNAs, and has the potential to treat diseases by reaching previously inaccessible drug targets.

Dicerna's technology to silence the expression of disease-driving genes, according to Eli Lilly, will help cement its leadership position in cardio-metabolic diseases, while also allowing a foray into new fields including neurodegeneration and pain.

What's Next

The collaboration agreement is subject to antitrust clearance. Eli Lilly said this deal will be reflected in its GAAP financial results for 2018 but will not impact its non-GAAP EPS.

At time of publication, Dicerna shares were up 20.7 percent to $15.70.

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