Indianapolis drug maker Eli Lilly & Co. (NYSE:LLY) has agreed to pay up to $800 million for Avid Radiopharmaceuticals, the Philadelphia developer of a tracing agent that can help diagnose Alzheimer’s disease.
The tracing agent, florbetapir F 18 — which last week topped the Cleveland Clinic’s Top 10 Medical Innovations list for 2011 — is coupled with a PET scan to allow doctors to see inside patients’ brains to detect beta-amyloid plaques, the tell-tale signature of Alzheimer’s.
The acquisition of florbetapir, for which Avid is expected to file a New Drug Application with the Food and Drug Administration by the end of the year, could help Lilly step back from the patent cliff and associated revenue dropoff it faces over the next five years as its patents on blockbuster drugs expire.The Avid acquisition also would gain Lilly entree to the fast-growing market for radiopharmaceuticals that can diagnoses diseases in earlier stages and help doctors better monitor treatment. And it would provide Lilly with a diagnostics development platform covering several disease areas, including Parkinson’s disease and diabetes, the Indianapolis company said in a release.
“The acquisition of Avid Radiopharmaceuticals aligns well with Lilly’s innovation-based strategy, offers a potential near-term revenue opportunity, leverages our neuroscience expertise and will immediately bolster our diagnostics capabilities,” John Lechleiter, Lilly chairman and chief executive officer, said in the release.
The combination offers Avid the deep pockets of a strategic partner to push florbetapir into the market.
“We are very excited to join the great scientific team at Lilly and continue our work to develop new molecular imaging agents capable of changing the medical management of significant chronic human diseases,” Dr. Daniel M. Skovronsky, Avid’s founder and chief executive officer, in the release. “We’ve had a productive and long-standing relationship with Lilly, and believe in their approach to providing improved outcomes for individual patients.”
Avid was spun out of the University of Pennsylvania, according to the Philadelphia Business Journal. Wayne, Pennsylvania-based Safeguard Scientifics Inc. owns 13 percent of Avid, investing $12 million since May 2007, the business journal reported.
Safeguard (NYSE:SFE) said it expects to receive at least $36 million from Lilly’s upfront payment of $300 million for Avid, the journal said. Safeguard could get a lot more if Avid meets performance milestones, for which Lilly has agreed to pay an additional $500 million.
The Avid Radiopharmaceuticals announcement even has an Ohio connection: Drug and medical products distributor Cardinal Health Inc. (NYSE:CAH) in Dublin and its nationwide network of radiopharmacies have partnered with Avid over the last two years (pdf) to help develop florbetapir.
Disclosure: No positions.