(Reuters) - Eli Lilly and Co (LLY.N) is spending $100 million for a stake in Dicerna Pharmaceuticals Inc (DRNA.O) as part of a licensing deal, making it the latest major drugmaker to bet on gene-silencing technology.
The companies expect to collaborate on developing more than 10 experimental drugs to treat pain, neuro-degenerative diseases and cardio-metabolic disorders.
For the use of Dicerna’s GalXC gene-silencing platform, Lilly will pay the company $100 million upfront and buy a $100 million equity stake at a per share price of $18.47, a 42 percent premium to Dicerna’s close on Friday, Dicerna told Reuters.
Shares of Dicerna closed at $13 on Friday on the Nasdaq.
Dicerna is also eligible to receive up to about $350 million for each developed drug in the form of milestone payments, plus mid-single to low-double digit royalties.
Given Lilly’s expertise in diabetes treatments, the company was interested in leveraging GalXC to target cardiovascular disease and liver dysfunction, conditions often related to diabetes, Dicerna’s Chief Executive Officer Douglas Fambrough said.
Gene-silencing, or RNA interference (RNAi) technology, is considered an important new frontier in medicine with the potential to treat a variety of diseases.
It works by targeting and silencing specific genetic material and blocking the production of disease-causing proteins.
Big drugmakers including Johnson & Johnson (JNJ.N) have been investing in firms with expertise in the field.
In August, Alnylam Pharmaceuticals Inc’s (ALNY.O) rare disease treatment Onpattro became the first approved RNAi drug in the United States.
Last week, Dicerna signed a licensing deal with Alexion Pharmaceuticals Inc (ALXN.O), granting Alexion exclusive worldwide rights to two of its experimental RNAi molecules and an option to buy two additional treatments.
Reporting by Tamara Mathias in Bengaluru; Editing by Sai Sachin Ravikumar