Eli Lilly has agreed to pay around $1.1 billion cash to buy Dermira, a biopharma focused on developing therapies for chronic skin conditions. The acquisition will add lebrikizumab to Lilly’s immunology pipeline as well as Qbrexza to its portfolio of dermatology medicines.

Granted Fast Track designation by the US Food and Drug Administration (FDA) in December 2019, lebrikizumab is a novel, investigational monoclonal antibody that is currently in Phase 3 trials to treat moderate-to-severe atopic dermatitis in adults and children over 12 years.

Qbreza is an FDA-approved medicated cloth for the topical treatment of primary axillary hyperhidrosis, or uncontrolled excessive underarm sweating.

“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, Lilly senior vice president and president of Lilly Bio-Medicines. “The acquisition of Dermira is consistent with Lilly's strategy to augment our own internal research by acquiring clinical phase assets in our core therapeutic areas and leveraging our development expertise and commercial infrastructure to bring new medicines to patients.”

Commenting on the acquisition, Cantor Fitzgerald analysts said the combination of the phase 3 program and Dermira’s approved product make it a “smart strategic deal” for Lilly.

The transaction is expected to close by the end of the first quarter, subject to customary closing conditions, including regulatory approvals and the tender of a majority of the outstanding shares of Dermira's common stock. Following the closing of the tender offer, Lilly will acquire any shares that are not tendered through a second-step merger.