A few days ago, Eli Lilly has signed a research cooperation and licensing agreement with Lycia Therapeutics to address key unmet medical needs in Eli Lilly's key therapeutic areas (including immunology and pain). The focus of the two cooperation is to use Lycia's proprietary lysosomal targeting chimera or LYTAC protein degradation technology to discover, develop and commercialize new targeted therapies.

In terms of cooperation details, Lycia will receive an advance payment of 35 million U.S. dollars and will be eligible for potential milestone payments of more than 1.6 billion U.S. dollars. Eli Lilly and Lycia will collaborate on up to five difficult indications including immunology and pain. According to the agreement, the two companies will use the LYTAC platform to develop up to 5 protein degradation agents. Eli Lilly will be solely responsible for the preclinical and clinical development of drug candidates, and will obtain the exclusive global license rights for the potential commercialization of the drug.

Lycia Biotechnology is headquartered in South San Francisco, USA. The company mainly uses its Lysosome Targeted Chimera (LYTAC) platform to develop protein-degradable therapies. These abnormal proteins can cause a series of diseases in patients, including cancer and autoimmune diseases. The next-generation degradation method used by Lycia can target unexplored extracellular proteomes, including cell surface receptors and secreted proteins. The LYTAC platform can also develop a variety of therapeutic methods, including antibodies and small molecules, which may inhibit many targets that were previously considered difficult to handle in a series of therapeutic fields and diseases.

In recent years, biotechnology companies that use protein degradation mechanisms to try to solve diseases that are difficult to treat with drugs have sprung up like bamboo shoots. Eli Lilly’s contract with a protein degradation partner once again shows that more and more pharmaceutical companies in this field are committed to the transition from undruggable to drug-free. Prior to this, large pharmaceutical companies such as Roche, Sanofi and Pfizer have jointly launched related research and development cooperation with companies such as Vividion (now part of Bayer), Kymera, Nurix and Arvinas.

In China, many companies are also actively developing protein degradation therapies. For example, Seed Therapeutics, a subsidiary of Wanchun Pharmaceuticals, and Eli Lilly have reached a licensing agreement with a potential of up to US$800 million to jointly develop new drugs for ubiquitination and targeted protein degradation; the TRK protein degradation agent CG001419 developed by Ruiyue Biotechnology is expected to be used in the treatment of cancer and others. Disease; The new external androgen receptor degrading agent GT20029 developed by Pioneer Pharmaceutical is expected to be used in the treatment of androgenic alopecia and acne.

It is worth noting that the method used by Lycia is different from the PROTAC technology used by companies such as Arvinas. PROTAC molecule is short for proteolytic targeting chimera, which can use human cells to remove unwanted or damaged proteins. However, this technology cannot effectively reach proteins outside the cell (whether on the cell surface or circulating in the blood). According to Lycia CEO Aetna Wun Trombley, the LYTAC technology "grabs" specific proteins from the cell membrane or proteins in the circulation and "drags" them into the cell, causing it to be degraded by lysosomes.

Eli Lilly said that the cooperative transaction with Lycia will not change Lilly’s previous 2021 non-GAAP earnings per share guidance.