Lilly to buy migraine-drug maker for $960 million
INDIANAPOLIS — Drug manufacturer Eli Lilly and Co. will buy migraine-medicine maker CoLucid Pharmaceuticals for $960 million, both companies said in a news release Wednesday.
CoLucid (CLCD) is developing lasmiditan, a migraine medicine that could help patients with cardiovascular disease. Clinical testing on lasmiditan, which has been having trials in intravenous and oral forms, is scheduled to be completed later this year, and the new drug could get U.S. regulatory approval by 2018.
“Lasmiditan is a novel, first-in-class molecule that could represent the first significant innovation for the acute treatment of migraine in more than 20 years,” David A. Ricks, Lilly’s (LLY) president and chief executive officer, said in a statement.
Under the terms of the deal, Lilly will buy CoLucid Pharmaceuticals for $46.50 per share for a total of about $960 million.
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CoLucid's stock immediately spiked by almost a third to $46.30 and remained within a few pennies of that level the rest of the morning. Its stock price has risen ninefold in the past year with almost all of that increase coming since September when CoLucid announced that 100 mg and 200 mg doses of lasmiditan showed statistically significant decreases in headache pain after two hours vs. a placebo.
Eli Lilly's stock price was fluctuating within pennies of its $77.32 market open. It has been trending upward since its 52-week low in late November.
Within 90 minutes of the deal's announcement at 6:45 a.m. ET, a shareholder rights law firm, San Diego-based Johnson & Weaver LLP, said it was investigating whether CoLucid board members breached their fiduciary duties in not agreeing to a higher sales price. It maintains that one Wall Street analyst had valued CoLucid at $58 per share.
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Collectively, analysts rated the stock a strong buy after its success in last year's drug trials and had put its target price at $42.50, according to NASDAQ. Lilly also has been rated a strong buy with a consensus target price of $90 a share.
The deal brings the drug back to where it was created. Lilly scientists patented lasmiditan and licensed it to CoLucid in 2005.
“We are excited that lasmiditan will be back at Lilly, where it was originally discovered, for the conclusion of Phase 3 development and potential commercialization,” Thomas P. Mathers, CoLucid’s chief executive officer, said in a statement.
Lilly also acquires other CoLucid drugs including headache medication galcanezumab and the pain-killer tanezumab, which is being studied in a partnership with Pfizer.
The deal, if it clears federal anti-trust rules, is expected to close by March.
Follow Vic Ryckaert on Twitter: @vicryc
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