Lilly gambles on Dice

Lilly follows others into the oral autoimmune space, not long after its leader questioned the future of small molecules.

When Dice Therapeutics said in October that its oral IL-17 inhibitor DC-806 could rival Bristol Myers Squibb’s Sotyktu in psoriasis based on phase 1 data, the claims looked a little premature. But Lilly has clearly seen promise here, today acquiring Dice for $2.4bn.

The move reflects a broader shift in the autoimmune space from biologicals towards orals. It also comes a week after Lilly’s chief executive, David Ricks, complained that the Inflation Reduction Act was discouraging investment in small molecules.

The right small molecules can still command a good price, judging by today’s deal, which came at a 42% premium to Dice’s closing share price on Friday. As well as DC-806, Lilly will also gain Dice’s next-generation oral IL-17 DC-853, which looks more potent, and preclinical candidates including oral integrin inhibitors and a PD-L1 blocker. The first phase 1 data on DC-853, in healthy volunteers, are due in the second half of this year.

Roll on phase 2

Dice’s lead project, DC-806, is now in the phase 2 Illuminate dose-ranging trial in psoriasis, with results expected next year.

IL-17 is an established autoimmune target, with injectable antibodies including Novartis’s Cosentyx and Lilly’s own Taltz already approved. Companies have been trying to develop oral IL-17 inhibitors in a bid to improve compliance and push use into mild disease.

These attempts have not always succeededLilly previously discontinued its own oral contender, LY3509754, after discovering liver toxicity. DC-806 has so far sidestepped such issues.

Despite the existence of Taltz, Stifel analysts wrote today that they did not see any obvious FTC concerns – the antitrust regulator has been clamping down on deals recently. Lilly’s only other approved autoimmune product is Olumiant, an oral Jak inhibitor.

Jaks have been held back by their side effects, but other oral options are coming through, including drugs inhibiting Tyk2, a member of the Jak family. This space is led by the aforementioned Sotyktu, while Takeda paid Nimbus $4bn to get a Tyk2 contender last year.

Other targets of interest for oral developers include IL-23. Here, phase 2 psoriasis data are due at next month’s World Congress of Dermatology on Protagonist’s Johnson & Johnson-partnered JNJ-2113 (PN-235); the companies toplined the Frontier 1 trial as positive in March.

Competition in psoriasis is fierce, from injectables as well as orals, so Lilly will need its new projects to keep delivering in the clinic. In going early, the big pharma is taking a gamble – but if this pays off the group will end up looking canny.

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