Eli Lilly acquires Organovo’s FXR program for IBD treatment

SAN DIEGO - Organovo Holdings, Inc. (NASDAQ:ONVO), a biotech firm specializing in 3D human tissue models, has reached an agreement to sell its FXR program, including the lead asset FXR314, to pharmaceutical giant Eli Lilly and Company (NYSE:LLY), a $794 billion market cap company currently trading above its InvestingPro Fair Value. This move marks a significant progression in the treatment of inflammatory bowel disease (IBD).

Under the terms of the acquisition, Organovo will receive an upfront payment and is eligible for additional payments contingent on the achievement of certain regulatory and commercial milestones. Eli Lilly, which has demonstrated strong revenue growth of 32% over the last twelve months with an impressive 81% gross profit margin, will gain worldwide rights to the commercial and intellectual property aspects of the FXR program.

Keith Murphy, Executive Chairman of Organovo, expressed optimism about the transition, stating that Eli Lilly’s expertise in development will benefit the FXR314 program and ultimately the patients. According to InvestingPro analysis, Eli Lilly maintains a "GOOD" financial health score and is recognized as a prominent player in the pharmaceuticals industry, with 17 additional key insights available to subscribers. Organovo’s proprietary technology creates 3D human tissues that closely replicate the natural composition, architecture, and function of human tissues, aiding in the development of effective drugs.

The transaction is expected to bolster Eli Lilly’s portfolio in the treatment of IBD, a chronic condition that affects millions worldwide. Organovo’s approach, which utilizes insights from their 3D human tissue models, has been instrumental in identifying promising drug candidates like FXR314. Detailed analysis of this acquisition and its potential impact on Eli Lilly’s market position is available in the comprehensive Pro Research Report, part of the InvestingPro subscription.

Organovo’s public filings with the SEC, including its Annual Report on Form 10-K filed on May 31, 2024, and the most recent Quarterly Report on Form 10-Q filed on February 19, 2025, outline the risks and uncertainties associated with forward-looking statements. The company cautions against placing undue reliance on such statements, which reflect expectations as of their original dates.

This strategic acquisition is based on a press release statement and aligns with the growing trend of biotechnology companies leveraging advanced technologies to develop new treatments for complex diseases. The financial terms of the deal were not disclosed.

In other recent news, Eli Lilly and Company has announced the issuance of $6 billion in new debt across six tranches, with maturities ranging from 2028 to 2065. This financial move is supported by an underwriting agreement with a consortium of banks, and the funds are expected to be used for general corporate purposes. Additionally, Moody’s (NYSE:MCO) Ratings has upgraded Eli Lilly’s issuer rating to Aa3, reflecting expectations of robust earnings growth driven by its incretin portfolio, including drugs like Mounjaro and Zepbound.

The company’s recent launch of new Zepbound vials under the Self Pay Journey Program aims to make obesity treatment more affordable, with prices for the 7.5 mg and 10 mg doses reduced to $499 per month. Furthermore, Bernstein analysts have maintained an Outperform rating on Eli Lilly, with a price target of $1,100, highlighting the resolution of a semaglutide shortage as beneficial for Eli Lilly’s diabetes drugs.

The company has also filed for a six-part note offering totaling $6.5 billion, with the notes due between 2028 and 2065, and has received stable ratings from Moody’s and S&P. Eli Lilly’s strategic initiatives and product expansions, including its late-stage pipeline, are expected to sustain its growth and solidify its market position.

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