Eli Lilly (LLY) has signed a $1.3 billion deal with privately held biotechnology firm Superluminal Medicines that will see the two companies employ artificial intelligence (AI) for future drug discoveries.
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Specifically, the deal will see Superluminal use its existing platform to discover and optimize small-molecule therapeutics related to cardiometabolic diseases and obesity or weight-loss medicines. Eli Lilly will get exclusive rights to develop and commercialize the new prescription drugs.
In return, Superluminal will receive up to $1.3 billion from Eli Lilly through a combination of upfront and near-term payments, an equity investment, and from reaching certain milestones. Superluminal, which is based at Eli Lilly’s laboratory site in Boston, will also be able to take home royalties on net sales of any approved medications.
The new deal comes as Eli Lilly’s main competitor, Novo Nordisk (NVO), announces several milestones of its own.
Novo Nordisk Moves
On Aug. 18, European pharmaceutical giant Novo Nordisk announced that it is offering cash-paying U.S. patients access to its blockbuster diabetes treatment Ozempic for less than half its monthly list price. Going forward, American consumers can pay $499 in cash per month for three doses of Ozempic. The price cut comes as drug makers face growing political pressure to lower retail costs in America.
Also on Aug. 18, Novo Nordisk announced that its weight-loss drug Wegovy has received regulatory approval in the U.S. to treat advanced liver disease. The approval makes Wegovy the first weight-loss drug to be authorized for the treatment of liver disease, which affects about 5% of Americans. LLY stock is down 8% this year.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 22 Wall Street analysts. That rating is based on 17 Buy and five Hold recommendations issued in the last three months. The average LLY price target of $924.42 implies 31.57% upside from current levels.
