Eli Lilly Secures Option to Acquire Radiopharma Startup

Eli Lilly has taken another significant step into the radiopharmaceutical sector by entering an agreement with Radionetics Oncology. This deal grants Lilly the option to acquire the San Diego-based biotechnology firm for $1 billion. Initially, Lilly will make a payment of $140 million for the option rights, as announced on Monday. During the option period, Radionetics will continue to advance its pipeline of radiopharmaceutical drugs, and Lilly will decide afterward whether to purchase the company.

Radionetics is at the forefront of developing small molecule radiopharmaceuticals designed to target G protein-coupled receptors. These receptors are a prominent family of proteins that serve as appealing targets for various diseases, with a particular focus on solid tumors.

The radiopharmaceuticals sector, which offers a targeted alternative to traditional radiation therapy, has seen considerable investment from major pharmaceutical companies. Giants like Eli Lilly, Bristol Myers, and AstraZeneca have made strategic acquisitions to enter this field, driven by recent advancements in technology, clinical success stories, and regulatory approvals.

Historically, the production and distribution of radiopharmaceuticals have been complicated due to the need for tightly controlled supply chains to prevent the decay of the radioisotopes they contain. However, the recent surge in investment has spurred a boom in biotech capabilities and infrastructure.

Eli Lilly has actively participated in this sector throughout the year. In May, Lilly paid $60 million to startup Aktis Oncology for rights to develop treatments discovered by the company, targeting specific areas identified by Lilly. Lilly’s most significant investment came last year when it acquired Point Biopharma for $1.4 billion. This acquisition provided Lilly with three clinical-stage candidates, including two that could rival radiopharmaceuticals developed by Novartis. These therapies, Pluvicto and Lutathera, generated over $1.5 billion in sales for Novartis last year.

Radionetics itself emerged from Crinetics Pharmaceuticals in 2021, starting with a $30 million fund to develop nonpeptide radiopharmaceuticals for various oncology indications. Earlier this year, Radionetics secured an additional $52.5 million through a Series A funding round. The company enjoys the backing of investors such as 5AM Ventures, Frazier Life Sciences, DCVC Bio, GordonMD Global Investments, and Crinetics Pharmaceuticals.

As the landscape of radiopharmaceuticals evolves, Eli Lilly’s strategic moves, including its latest deal with Radionetics Oncology, highlight the pharmaceutical industry's growing commitment to this promising area of cancer treatment. The combination of technical innovation, successful clinical outcomes, and the potential for high revenue continues to attract substantial investment and interest, setting the stage for further advancements and acquisitions in the field.