01:04 PM EST, 01/13/2025 (MT Newswires) -- Eli Lilly ( LLY ) agreed to acquire an experimental treatment for breast cancer and other advanced solid tumors from Scorpion Therapeutics for up to $2.5 billion.

The purchase price includes an upfront payment and subsequent amounts that Scorpion's shareholders would receive as certain regulatory and sales milestones are achieved. Shares of Eli Lilly ( LLY ) were down 1.7% in midday trade.

As part of the deal, Eli Lilly ( LLY ) will acquire Scorpion's STX-478, an investigative once-daily oral medication being evaluated in a trial. Scorpion would spin out its non-phosphoinositide 3-kinase alpha pipeline assets into a new company that would be owned by Scorpion's existing shareholders, with Lilly retaining a minority interest.

Phosphoinositide 3-kinase alpha "mutations occur in a meaningful proportion of hormone-positive breast cancers, and there is significant unmet need for new treatment options that effectively and safely target this pathway," Jacob Van Naarden, president of Lilly Oncology, said in a statement.

STX-478 can be used in combinations with standard-of-care therapies, which could "deliver meaningful impact in earlier treatment settings," according to Van Naarden.

"We believe Lilly's global capabilities and strategic commitment to patients with breast cancer will accelerate our goal of developing STX-478 to improve outcomes for the many patients with solid tumors driven by" phosphoinositide 3-kinase alpha mutations, Scorpion Chief Executive Adam Friedman said.

Scorpion's existing management team led by Friedman will operate the new company. The companies did not provide an estimate on when the deal is expected to close, but said the transaction is subject to customary closing conditions.

Eli Lilly ( LLY ) is expected to report fourth-quarter results on Feb. 6. For the third quarter, the pharma giant reported 17% sales growth in its non-incretin division, which includes its oncology, immunology and neuroscience portfolios.

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