Eli Lilly to Buy Skin Treatment Company Dermira for $1.1 Billion

Eli Lilly reaches an agreement to buy Dermira for $1.1 billion in cash, or $18.75 a share.
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Eli Lilly (LLY) - Get Report reached a definitive agreement to buy skin treatment company Dermira (DERM) - Get Report for $1.1 billion in cash, or $18.75 a share.

The price is 2.2% higher than Dermira's closing price Thursday of $18.34. The stock was up 5.29% in trading Friday to $19.31. The shares have jumped more than 234% over the past three months.

In a statement, Eli Lilly said the acquisition of Dermira would expand its immunology pipeline with the addition of dermatitis treatment lebrikizumab, which is being evaluated in a Phase 3 clinical development program in adolescent and adult patients.

"People suffering from moderate-to-severe atopic dermatitis have significant unmet treatment needs, and we are excited about the potential that lebrikizumab has to help these patients," said Patrik Jonsson, an Eli Lilly senior vice president and president of Lilly Bio-Medicines.

"Since Dermira's inception, we have been focused on applying strong science to medical dermatology with the goal of finding new ways to treat some of the most common skin conditions that affect millions of people every year," said Tom Wiggans, chairman and chief executive at Dermira, in a statement. 

"We also believe this proposed transaction is in the best interests of and our stockholders and affirms the dedication and important groundwork established by talented employees since the founding of the company nearly 10 years ago," Wiggans added.

The acquisition isn't subject to any financing condition and is expected to close by the end of the first quarter of 2020, Eli Lilly said.

The company said it would provide an update to its 2020 financial guidance, including the expected impact from the Dermira acquisition, when it reports fourth-quarter results on Jan. 30.

Eli Lilly shares rose 0.91% to $137.16.