Eli Lilly is buying Dice Therapeutics for $2.4 billion

Dice Therapeutics Inc (NASDAQ: DICE) opened more than 35% up this morning after Eli Lilly & Co (NYSE: LLY) said it will buy the immunology company for $2.4 billion.

Dice stock up on the all-cash agreement

The all-cash agreement values each share of Dice Therapeutics at $48 – about a 40% premium on top of its previous close.

Lilly expects the takeover to help expand its footprint in treatments for autoimmune disorders. According to Patrick Jonsson – the President of its Immunology business:

Together, we can tackle the challenges ahead in finding new treatments for patients with significant unmet medical needs.

In April, the pharmaceutical behemoth said it missed Street estimates for adjusted per-share earnings in its first financial quarter. Eli Lilly stock is also in the green following today’s announcement.  

Lilly-Dice merger to close in the third quarter

Eli Lilly expects the acquisition to complete in the third quarter of 2023 provided that it satisfies the customary closing condition, including shareholders and regulatory approval.

Boards of both companies, though, have already nodded on the merger. In the press release, Kevin Judice – the Chief Executive of Dice Therapeutics said:

Our novel approach to discovering and advancing oral, small molecules against validated protein-protein interaction targets has even greater potential with Lilly’s industry-leading clinical development capabilities.

Last month, the Nasdaq-listed firm said it had about $555 million in cash, equivalents and marketable securities, sufficient for operations through 2026. Versus its year-to-date low in early March, the biotech stock is now up a whopping 80%.