Eli Lilly and Company and Scorpion Therapeutics
Type: Acquisition agreement
Buyer: Eli Lilly and Company
Seller: Scorpion Therapeutics, Inc.
Focus: STX-478
Deal value: $2.5 billion
Financial impact: Since its 2020 launch, Scorpion Therapeutics has raised over $400 million across three funding rounds to advance precision oncology, recently spinning off non-PI3Kα assets while partnering with Eli Lilly on its PI3Kα program.
Eli Lilly and Company has agreed to acquire Scorpion Therapeutics, Inc., a privately held biotechnology firm focused on small-molecule precision oncology therapies. Lilly will acquire Scorpion’s PI3Kα inhibitor program, STX-478, through this transaction. The deal includes potential payments of up to $2.5 billion to Scorpion shareholders, comprising an upfront cash payment and additional milestone-based payments tied to regulatory and commercial achievements.
As part of the agreement, Scorpion will spin out a new, independent company that will retain its employees and non-PI3Kα pipeline assets. This newly formed entity will be owned by Scorpion's existing shareholders, with Lilly holding a minority equity stake. The new company will be led by Dr. Axel Hoos and members of Scorpion’s current management team and will continue advancing a portfolio of precision oncology therapies, leveraging Scorpion’s established discovery platform and development expertise.
STX-478: Targeted Cancer Therapy
STX-478, developed by Scorpion Therapeutics, is a mutant-selective, allosteric inhibitor of PI3Kα designed to precisely target mutations within the helical and kinase domains, while sparing the wild-type form of the protein.
Currently in clinical trials for advanced solid tumors, including breast cancer, STX-478 represents a potential next-generation PI3Kα inhibitor. By selectively inhibiting the cancer-associated pathway without affecting healthy cells, it aims to address a major limitation of existing therapies. This targeted approach may enable more effective pathway suppression and improved tolerability, potentially leading to better disease control.
Five years’ market revenue of Eli Lilly’s oncology drugs
Over the past five years, Eli Lilly has demonstrated consistent growth in revenue from its oncology drug portfolio, reflecting its strategic focus and investment in cancer therapeutics. The recent acquisition of Scorpion Therapeutics’ PI3Kα inhibitor program, including the promising candidate STX-478, is poised to further strengthen Lilly’s position in the oncology space. While such acquisitions come with upfront costs, the long-term potential of STX-478 could be substantial. If clinical trials confirm its efficacy, particularly in breast cancer and other advanced solid tumors, STX-478 may become a significant revenue driver. Its mutant-selective design offers a differentiated approach that could enhance treatment outcomes and tolerability, positioning it as a next-generation PI3Kα inhibitor with strong commercial prospects.
Five years market revenue of Eli Lilly's oncology drugs (2020-2024)
Fig 12: Market revenue of Eli Lilly's oncology drugs
Scorpion Therapeutics' Financial Trajectory: From Seed Funding to Strategic Acquisition
Scorpion Therapeutics has demonstrated a robust financial trajectory since its inception in 2020, underpinned by strategic funding rounds and a clear focus on advancing precision oncology.
Key Funding Milestones
- Series A Financing (October 2020): The company launched with $108 million in Series A funding, led by Atlas Venture, Omega Funds, and Vida Ventures. This capital was earmarked to advance its "Precision Oncology 2.0" initiative, aiming to deliver next-generation cancer therapies.
“Scorpion Therapeutics, backed by over $400M in funding, remains focused on precision oncology through a strategic spin-off with Eli Lilly, retaining its core team and pipeline while Lilly takes over the PI3Kα program.”
- Series B Financing (January 2021): Scorpion secured an oversubscribed $162 million in Series B funding, bringing its total capital raised to approximately $270 million. This round was led by Boxer Capital, EcoR1 Capital, LLC, Omega Funds, and Vida Ventures, with participation from several institutional investors. The funds were allocated to enhance its drug discovery engine and advance its growing portfolio of therapeutic candidates.
- Series C Financing (2022): The company raised $150 million in Series C funding to support the development of its clinical-stage candidate STX-478 and its EGFR inhibitor programs, STX-721 and STX-241. These funds also supported the co-development of STX-721 with French pharmaceutical company Pierre Fabre.
Scorpion Therapeutics did not have any marketed drugs to date. As part of its agreement with Eli Lilly, Scorpion Therapeutics established a new spin-off entity, retaining its team and non-PI3Kα pipeline assets. Led by Scorpion’s existing management, the new company remains focused on advancing precision oncology therapies. Meanwhile, Eli Lilly assumes control of the PI3Kα inhibitor program, with a minority equity stake in the newly formed entity. This structure enables Scorpion to preserve its scientific expertise and continue developing its remaining pipeline, while facilitating the transfer of the PI3Kα program to Lilly.