Sosei Heptares Adds Lilly To Big Pharma Client List

The Japan-UK group is ending the year on a high, banking $37m upfront from a pact with Eli Lilly that will focus on finding small molecules which modulate G protein-coupled receptor (GPCR) targets.

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Sosei Heptares has added Eli Lilly and Company to its lengthy list of big pharma partners with the signing of a potentially lucrative metabolic disease pact.

The Japan-UK company is teaming up with Lilly to discover, develop and commercialize small molecules that modulate novel G protein-coupled receptor (GPCR) targets associated with diabetes and metabolic diseases, using Sosei Heptares’ StaR technology. The Tokyo headquartered group, which has its research site in Cambridge, will pocket an upfront payment of $37m and be eligible to receive development and commercial milestones totalling up to $694m, plus tiered royalties.

 Matt Barnes, head of UK R&D at Sosei Heptares, said the agreement with Lilly "further reinforces our position as a global partner of choice for GPCR-focused drug discovery targeting major diseases where patients remain in need of new and effective therapies." He added: "We provide a highly attractive approach that is recognized by many of the world’s leading biopharmaceutical companies," and this pact is a clear fit, given that "Lilly is a recognized world leader in diabetes and metabolic diseases.”

Ruth Gimeno, head of diabetes and metabolic research at the US major, said that continued innovation in this therapeutic area had been a key priority for Lilly for many years. “This requires us to access cutting-edge expertise and technologies... and we are confident that this new partnership will enable us to unlock new targets and generate novel treatments."

The alliance with Sosei Heptares comes a couple of days after Lilly held a call pledging to invest behind its next round of incretin agonists given the early commercial success of glucagon-like peptide-1 (GLP-1)/glucose-dependent insulinotropic polypeptide (GIP) agonist Mounjaro (tirzepatide) and the general enthusiasm for the GLP-1 drug class in type 2 diabetes and obesity. The company revealed early Phase II results for its oral GLP-1 agonist orforglipron and for retatrutide (LY3437943) – a GLP-1, GIP and glucagon agonist and unveiled plans to move both drugs into Phase III in 2023. (Also see "Lilly Revenue Guidance Rises Along With Diabetes, Obesity Investments" - Scrip, 14 Dec, 2022.)

As for Sosei Heptares, the pact adds another major player to its roster of partners that includes AstraZeneca PLC, Roche Holding AG, GSK plc and Novartis AG. Also on the list is Pfizer Inc. and part of that particular pact is an oral once-daily GLP-1 agonist called PF-07081532, which is in mid-stage trials for diabetes and obesity and has shown potential best-in-class efficacy. (Also see "Pfizer Lays Out A Growth Plan To Offset $17bn In Coming Exclusivity Losses" - Scrip, 13 Dec, 2022.)

Another big pharma deal is with AbbVie Inc. which earlier this week made a $10m milestone payment to Sosei Heptares in connection with a 2020 alliance focused on inflammatory and autoimmune medicines that modulate GPCR targets of interest to the US firm. The two companies also have a multi-target neurology collaboration underway (signed in August 2022) which could be worth up to $1.2bn to Sosei Heptares, plus royalties. (Also see "Sosei Bolsters GPCR Focus With AbbVie Neurology Deal" - Scrip, 3 Aug, 2022.)

The company has had a good year financially, with revenues for the first nine months of 2022 reaching JPY8.64bn ($67.5m), an increase of $34.6m compared with the like, year-earlier period and helped by the $40m upfront fee received from its latest pact with AbbVie. Unveiling the results last month, CEO Chris Cargill said that Sosei Heptares was building "an agile, world-leading drug discovery and translational medicine capability [and] our position continues to be reinforced by the quality of the partners we attract and the progress of the candidates that result from these partnerships."

Moving To Prime

Analysts at Jefferies, who said that "the overall impression was positive" regarding the Lilly deal, noted that the upfront would contribute to Sosei Heptares achieving the criteria for a transfer from its Tokyo Mothers listing (for start-ups) to the Tokyo Stock Exchange Prime bourse. The move, which the broker believes could happen in the first quarter of 2023, would help to attract large Japanese institutional investors and help the firm "realize a strong capital position ... and lead to a stable upward stock price trend."