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As most of us kicked off Monday morning as usual, it looks like biotechs have been busy, after three major companies announced deals.
The announcements came from Johnson & Johnson, Eli Lilly, and GSK after a report from consulting firm PwC projected 2025 would be a big year for mergers and acquisitions (M&A) in healthcare, as annual deal numbers through November 15 were 70% higher than pre-Covid-19 trends.
Here’s the breakdown.
Johnson & Johnson
J&J announced it had entered into a definitive agreement to acquire Intra-Cellular Therapies, another biotech working to make drugs for central nervous system disorders. The deal is worth $14.6 billion, or $132 per share in cash, according to a release.
Under the agreement, J&J will own Intra-Cellular Therapies’s Caplyta, an oral treatment for adults with schizophrenia and bipolar depression, as well as ITI-1284, a drug in Phase 2 trials for generalized anxiety disorder and Alzheimer’s-related psychosis and agitation, according to the release.
Intra-Cellular Therapies was founded in 2002 and has performed well financially. In its Q3 earnings reported in October, the company’s revenue totaled $175.4 million, compared to $126.2 million for the third quarter of 2023.
The company’s stock shot up 34.2% to $127.33 per share around 2pm on Monday following the announcement.
Eli Lilly
Eli Lilly has entered a definitive agreement to acquire a treatment from biotech Scorpion Therapeutics for $2.5 billion. The firm’s medication, STX-478, is an oral daily treatment for breast cancer and other solid tumors, and is currently in Phase 1/2 trials, according to a release.
The medication is a type of treatment called a PI3K inhibitor, a cancer medication. Following the acquisition, Scorpion would create a new company for its non-PI3K assets that would be owned by its shareholders; Eli Lilly would have a minority equity interest in that company and would hold the PI3K business.
Scorpion Therapeutics is a private company founded in 2020. It raised $150 million in Series C funding in July, after a $162 million Series B in 2021 and a $108 million Series A in 2020.
GSK
GSK entered into an agreement to buy IDRx, a biotech founded in 2022 that is in the clinical stages for gastrointestinal stromal tumor (GIST) treatments. The $1 billion deal, which includes possible success-based milestone payments up to $150 million, includes the purchase of IDRX-42, a GIST drug in early Phase 1 trials.
IDRX-42 has received the FDA’s orphan drug designation used for medications that treat rare conditions, as well as the fast track designation, which is applied to pharmaceuticals that address “serious conditions and fill an unmet medical need,” according to the FDA.
The deal comes after a $120 million Series B funding round in August.