Eli Lilly said Thursday it will buy its diabetes treatment partner, Sigilon Therapeutics, and the biotech stock skyrocketed by triple-digits.
On the stock market today, Sigilon shares soared 438.2% to close at 21.15. Shares of Lilly rose 1.3% to finish at 464.49.
The deal values Sigilon stock at $14.92 per share, or about $34.6 million total. Shareholders also will receive a contingent value right worth up to an additional $111.64 per share in cash. The CVR is tied to clinical and regulatory milestones, and brings the total value of the deal up to $309.6 million.
Lilly and Sigilon first forged an alliance in 2018 to test encapsulated cell therapies. They are currently working on a cell therapy for type 1 diabetes.
Ruth Gimeno, Lilly's group vice president for diabetes, obesity and cardio-metabolic research, noted the difficulties patients with type 1 diabetes still face.
"By combining Sigilon's talent and expertise in cell therapy with the knowledge and skills of Lilly's research and development teams, we will enhance opportunities to create innovative islet cell therapy solutions to improve the care of people living with diabetes," she said in a written statement.
The news took biotech stock Sigilon to its highest point since January 2022.
Sigilon also is working on treatments for lysosomal and liver diseases.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
