RARE Daily

Lilly to Acquire Sigilon Therapeutics

June 30, 2023

Rare Daily Staff

Eli Lilly and Company is buying Sigilon Therapeutics, its partner in the development of Sigilon’s lead investigational therapeutic for type 1 diabetes and a company with a discovery pipeline of cell therapies targeting rare lysosomal diseases.

Sigilon’s product candidates are non-viral engineered cell-based therapies designed to produce a wide range of functions or therapeutic molecules that may be missing or deficient in patients living with diseases such as diabetes. The engineered cells are encapsulated by Sigilon’s Afibromer biomaterials matrix, which is designed to shield them from immune rejection.

Since 2018, Lilly and Sigilon have worked together to develop encapsulated cell therapies, including SIG-002, for the treatment of type 1 diabetes. The goal of these therapies is to free patients from constant disease management by sensing blood glucose levels, restoring insulin production and releasing it over the long term.

“This agreement represents the culmination of the important work led by our research and development team to continue advancing SIG-002 at Lilly,” said Rogerio Vivaldi, CEO of Sigilon. “As a person with type 1 diabetes and a treating physician, I am a passionate believer in the potential of SIG-002 and am very proud of our team’s accomplishments in developing and optimizing this product candidate using our novel platform technology. With deep industry expertise, Lilly is well-positioned to apply its industry-leading clinical and technical capabilities to harness the full potential of SIG-002 for the benefit of patients and their caregivers.”

Under the terms of their agreement, Lilly will commence a tender offer to acquire all outstanding shares of Sigilon for a purchase price of $14.92 per share in cash (an aggregate of approximately $34.6 million) payable at closing, plus one non-tradeable contingent value right (CVR) per share that entitles the holder to receive up to an additional $111.64 per share in cash, for a total potential consideration of up to $126.56 per share in cash without interest (an aggregate of up to approximately $309.6 million excluding shares held by Lilly).

CVR holders would become entitled to receive the following contingent payments: $4.06 per share in cash, upon first dosing of a specified product in the first human clinical trial; $26.39 per share in cash, upon first dosing of a specified product in the first human clinical trial for registration purposes; and $81.19 per share in cash, upon receipt of the first regulatory approval of a specified product. There can be no assurance that any payments will be made with respect to the CVRs.

The transaction is not subject to any financing condition and is expected to close in the third quarter of 2023, subject to customary closing conditions, including that Lilly owns a majority of the outstanding shares of Sigilon’s common stock following the tender offer.

Photo: Rogerio Vivaldi, CEO of Sigilon

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