Over $20 billion has already been spent this year! LLY.US CEO: Will target the “empty field” of pharmaceuticals and continue to seek larger mergers and acquisitions

The Zhitong Finance App learned that LLY.US (LLY.US) CEO Dave Ricks (Dave Ricks) said that investors can expect Lilly to push ahead with a larger deal similar to its move to acquire Centessa Pharmaceuticals Plc for 7.8 billion US dollars, because the company is searching extensively for assets in the “empty field” of the scientific community.

Eli Lilly is now the world's largest pharmaceutical company, and is spending heavily at a record rate to expand into new areas that could drive the next phase of its growth, using the huge benefits of its weight loss and diabetes injections.

Thanks to its Mounjaro and Zepbound injections and the diet pill Foundayo, the company is expected to have sales of $88 billion this year, almost double what it was two years ago. However, the pharmaceutical industry's brutal cycle — expensive research, high-risk development, and short sales windows to recoup the investment — never stopped. Rix is determined to act as soon as possible to avoid the sales spiral that had previously left industry leaders in trouble.

“We don't have a sense of urgency,” Rix said in an interview on the sidelines of the European Association for Diabetes Research's annual meeting in Milan. This sense of urgency will force pharmaceutical companies to close deals under financial pressure. “We call that phenomenon 'go shopping when hungry, 'and it's so easy to make mistakes.”

Ricks highlighted infectious diseases, women's health, and mental illness as areas where he sees an opportunity for Eli Lilly to make an impact. The company bought three vaccine manufacturers earlier this year for up to $3.8 billion, and recently agreed to buy psychedelic drug company AtaiBeckley Inc., for roughly the same price.

Rix said that these transactions are an example of Eli Lilly's “taking a slightly larger step”, and investors will see more such operations in the future. He pointed out that when more mature assets can solve new problems, companies prefer such assets.

According to reports, Eli Lilly's Mounjaro and Zepbound still have about ten years of patent protection. The company has historically targeted drugs that are in the early stages of development and are relatively inexpensive. Rix said he is more inclined to step in before significant data is read out and before any bidding process begins.

“Our idea is to evaluate clinical data that is not yet fully mature and bet on layout before the company's valuation reaches $5 billion. “At this point, the target's valuation is probably only $500 million,” he said. “If we make enough smart bets, the returns are often quite impressive.”

He said that this set of strategies allows Lilly to cultivate and grow pipeline projects internally before revenue pressure comes under pressure.

However, judging from recent transactions, Eli Lilly is willing to invest more money to acquire late-stage drugs in order to establish a competitive advantage in markets other than obesity. Furthermore, Rix has little interest in traditional ways of returning shareholders' capital.

“We are faced with a choice: use these returns to reinvest in productive areas other than obesity, or buy back stocks and pay dividends,” he said. “It's much more fun to invest in human health.”

Rix revealed that the Indianapolis-based company has completed around 40 deals so far this year. According to compiled data, the total amount of Eli Lilly's transactions this year has so far exceeded 20 billion US dollars, setting a record high in the company's history.