Eli Lilly & Co. has announced a $2.5 billion cash deal to acquire rights to STX-478, an experimental cancer therapy developed by Scorpion Therapeutics, marking the pharmaceutical giant's latest major oncology investment. The agreement was unveiled on the first day of the JP Morgan healthcare conference.
Next-Generation PI3K Alpha Inhibitor Shows Promise
STX-478 is described as a next-generation PI3K alpha inhibitor designed for breast cancer and other advanced solid tumors. The oral drug is currently undergoing phase 1/2 trials in patients with locally advanced or metastatic hormone receptor-positive, HER2-negative breast cancer and other solid tumors driven by PI3K alpha mutations.
According to Lilly, STX-478 has the potential to be a new generation of PI3K-targeting agents as it selectively binds to a pathway that is present in malignant cells, but absent in healthy cells. This selectivity could make it easier to tolerate, with fewer off-target side effects, than current drugs in the class.
The trials are evaluating STX-478 both as a monotherapy and in combination with CDK4/6 inhibitors and AstraZeneca's selective estrogen receptor degrader Faslodx (fulvestrant).
Addressing Significant Patient Population
Jacob Van Naarden, head of Lilly Oncology, noted that STX-478 could potentially address 30%-40% of people with HR-positive breast cancer, with a profile that could allow it to be used more readily in combination with other therapies. These combinations could "potentially deliver meaningful impact in earlier treatment settings when there is the best opportunity to improve outcomes for patients," Van Naarden commented.
Deal Structure and Strategic Implications
The $2.5 billion transaction includes an undisclosed upfront payment with subsequent payments upon reaching certain regulatory and commercial milestones. As part of the agreement, Scorpion will spin its non-PI3K pipeline assets – which include a pair of EGFR inhibitors codenamed STX-721 and STX-241 – into a new, as-yet-unnamed independent company that will be majority-owned by Scorpion's current shareholders, with Lilly retaining a minority stake.
Eli Lilly will integrate Scorpion's assets into its oncology business unit, which the company began expanding in 2019 after acquiring Loxo Oncology for $8 billion. Despite the limited return on that deal, the company's success with the new Zepbound and Mounjaro weight loss and diabetes drugs has provided additional resources to close deals.
Competitive Landscape in PI3K Inhibitors
The agreement represents Lilly's renewed attempt to make a mark in the PI3K inhibitor class, having previously worked on LOXO-783, a drug it acquired as part of its Loxo Oncology takeover but abandoned last year after concluding it would not be sufficiently competitive with its rivals. Notably, Loxo was co-founded by Keith Flaherty, who also established Scorpion.
The first PI3K inhibitor to reach the US market for a breast cancer indication was Novartis' Piqray/Vijoice (alpelisib), cleared in 2019 as a second-line therapy alongside fulvestrant for patients with advanced HR-positive, HER2-negative breast cancer with a PIK3CA mutation whose cancer has progressed on or after endocrine-based therapy. It was joined last year by Roche's Itovebi (inavolisib), the company's second candidate after its lead drug in the class (taselisib) was abandoned on safety grounds.
Other drugs in the PI3K class are on the market for hematological cancers, but as a whole the group is known to carry a risk of serious side effects including infections, diarrhea, liver damage, skin problems, and lung inflammation.
Company Profiles
Eli Lilly & Co. is the largest pharmaceutical company with a market capitalization of $720 billion. The company produces medicines for human diseases and veterinary drugs, supplying to 120 countries. Eli Lilly is known for the development and first industrial production of insulin in 1923, with headquarters in Indianapolis, Indiana. Revenue in the fourth quarter of 2024 increased by 45% to $13.5 billion.
Scorpion Therapeutics, Inc. is a Boston, Massachusetts-based company that manufactures and develops drugs for cancer treatment using a proprietary and fully integrated platform of advanced technologies in cancer biology and medicinal chemistry.
