Dicerna Stock Surges On RNAi Deal With Lilly

(RTTNews) - Eli Lilly and Company (LLY) and Dicerna Pharmaceuticals (DRNA) announced a global licensing and research collaboration focused on the discovery, development and commercialization of potential new medicines in the areas of cardio-metabolic disease, neurodegeneration and pain.

In the Monday's pre-market, DRNA is trading at $17.72, up $4.72 or 36.31 percent.

The companies will utilize Dicerna's proprietary GalXC RNAi technology platform to progress new drug targets toward clinical development and commercialization.

In addition, the partners will collaborate to move beyond the current technical paradigm in order to generate next-generation oligonucleotide therapeutic agents.

RNA interference (RNAi) is an emerging new approach to drug discovery, focused on a biologic process in which certain RNA molecules inhibit the expression of disease-causing genes by destroying the messenger RNAs (mRNAs) of those genes. RNAi has the potential to treat diseases by silencing some of the most well-validated, yet previously inaccessible drug targets.

As per the terms of the agreement, Dicerna will receive an upfront payment of $100 million, as well as an equity investment of $100 million at a premium. Dicerna is also eligible to receive up to about $350 million per target in development and commercialization milestones, as well as tiered royalties ranging from the mid-single to low-double digits on product sales.

Dicerna will work exclusively with Lilly in the neurodegeneration and pain fields, and on select targets in cardio-metabolic diseases. The two companies anticipate collaborating on more than ten targets.

The transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The transaction will be reflected in Lilly's reported results and financial guidance. There will be no change to Lilly's 2018 non-GAAP earnings per share guidance as a result of this transaction, Eli Lilly said.