Pharmaceutical giant Eli Lilly is expanding its cancer treatment portfolio into a promising new area by acquiring POINT Biopharma, a company developing radioactive drugs that precisely target tumors, for $1.4 billion.
POINT specializes in radioligand therapies, an emerging approach to cancer treatment that uses radioactive particles linked to molecules that bind to receptors on cancer cells. This enables the radiation to selectively kill tumors while limiting damage to healthy tissue.
Lilly is paying $12.50 per share in cash for POINT, an 87% premium over the stock’s latest closing price. The deal will give Lilly control of POINT’s pipeline of radioligand therapy candidates, which includes two late-stage experimental drugs.
One drug, PNT20021, targets prostate cancer tumors by binding to a protein called PSMA. Study data expected later this year will show whether it extends the lives of men with metastatic castration-resistant prostate cancer.
The other late-stage drug, PNT20031, homes in on neuroendocrine tumor cells via their somatostatin receptors. It may provide a new option for patients with advanced gastroenteropancreatic neuroendocrine tumors.
Beyond these lead programs, POINT has several earlier stage radioligands in development for cancers of the breast, lung, and brain. Lilly gains full access to progress these toward human testing.
The deal also gives Lilly two specialized facilities Point has built to produce and research radioligands. Manufacturing the drugs involves linking medical radioisotopes like actinium-225 to the targeting molecules, which requires nuclear expertise.
Jacob Van Naarden, head of Lilly’s oncology division, touted the promise of radioligands to safely destroy cancer while avoiding the side effects of traditional chemo. “We are excited by the potential of this emerging modality,” he said.
Lilly has been growing its cancer treatment business in recent years through deals for other firms’ drug candidates and technologies. The POINT acquisition similarly expands Lilly’s footprint into an area well-suited for precision medicine.
The U.S. Food and Drug Administration has already approved over a half dozen radioligand therapies from Lilly competitors like Novartis. Their success is driving a surge of investment and deal-making in the radiopharmaceutical field.
But analyst Geoffrey Porges of SVB Securities thinks Lilly overpaid for POINT. “We believe the valuation fails to reflect the very high risks inherent in drug development,” he wrote in a note to investors.
Porges added that Lilly may need to invest over $2 billion more to fully develop POINT’s pipeline over the next 5-7 years, with no certainty the drugs will pan out.
Lilly expects the acquisition to close by the end of 2023 after gaining required antitrust and regulatory approvals. The majority of POINT shareholders also must tender their shares as part of the agreement.
The deal marks Lilly’s second major oncology purchase in 2022. It paid $1.1 billion earlier in the year access to cancer drug candidates from China’s Zymeworks. With POINT, Lilly is now positioned as a leader across multiple next-wave approaches in the high-stakes race to develop better cancer treatments.