BMO says Eli Lilly ‘well-priced deal’ to expand presence in pain a positive

BMO Capital notes Eli Lilly (LLY) is expanding its presence in pain and looking to compete with the likes of Vertex Pharmaceuticals (VRTX) with this morning’s announced deal to acquire privately held SiteOne Therapeutics for as much as $1B inclusive of upfront and potential milestone payments. In the deal, Lilly could get access to SiteOne’s Phase 2 ready Nav 1.8 inhibitor STC-004, which has the same mechanism as Vertex’s suzetrigine, the analyst tells investors. The “well-priced” deal and decision to expand its presence in the non-opioid pain space continues Lilly’s trend of diversification beyond its recent success in obesity into therapeutic areas that the company knows well, says the analyst, who argues that the agreement “reads as a positive for our coverage of Lilly.”