There was a rumor in the market last night that Eli Lilly may seek to acquire Abivax, a developer of oral inflammatory bowel disease (IBD) treatments. Given the vast market potential for IBD overseas, as well asAbivax, with a market value approaching tens of billions of US dollars, clearly indicates that if the rumors are true, a takeover proposal exceeding tens of billions of US dollars is a done deal.If estimated based on Abivax's market value of nearly 10 billion USD plus a premium, the transaction amount is likely to exceed 100 billion RMB.。We believe that the rumor did not come out of nowhere, especially when it comes to Eli Lilly. Based on two points: Eli Lilly is relatively new in the IBD field, and currently, two of the top three MNCs in the IBD market have secured their positions with IL-23 antibodies. If Eli Lilly wants to make a leapfrog advancement, it must find a stronger biologic or break through with potent oral molecules. Secondly, from the BD or M&A moves in recent years, Eli Lilly has shown ambition to make significant strides in the IBD field.Currently, the top three players in the global IBD market by market share are AbbVie, Johnson & Johnson, and Takeda:1) AbbVie'sIL-23 Monoclonal Antibody Skyrizi and JAK1 Inhibitor Rinvoq Combined Sales Surpass $17.6 Billion in 2024, with IBD Indications Contributing $4.4 Billion and $2.0 Billion Respectively, Accounting for Over 36%;2）Johnson & Johnson's IL-12/23 monoclonal antibody Stelara and IL-23 monoclonal antibody Tremfya achieved sales of $10.36 billion and $3.67 billion, respectively, with the former contributing about 40% from IBD, and the latter having been recently approved at the end of last year for moderate to severe ulcerative colitis.3）Takeda achieved success in 2024 with its α4β7 integrin monoclonal antibody Entyvio.$5.841 billionIn contrast, Eli Lilly currently has only one commercialized product in the IBD field.Mirikizumab（IL-23 p19 Antagonist Approved for Moderate to Severe Ulcerative Colitis in 2023), which must BD or acquire a blockbuster product to break into the first tier of IBD.In the past two years, Eli Lilly has been very aggressive in its BD activities in the IBD field.In July 2024, the acquisition of Morphic Therapeutic brought in the oral small-molecule α4β7 integrin inhibitor MORF-057, followed by a collaboration with Organovo in early 2025 to develop the farnesoid X receptor (FXR) agonist FXR314.Taking MORF-057 as an example, its currently demonstrated clinical data:25.7% clinical remission rate, with a reduction of 2.3 points in the Mayo Endoscopic Score and a decrease of 6.4 points in the Robarts Histopathology Index (RHI), comparable to Takeda.Historical Data of Entyvio.
As shown in the figure below, although it is an oral small molecule, this data wants to PK offRinvoq alsoIt is not quite enough to fight, so the acquisition of one of the strongest oral small molecules currently availableAbivaxObefazimod has a strong driving rationale (since Eli Lilly is not involved in the current competition for biologic TL1A-targeted assets, possibly seeking more differentiated positioning).Obefazimod in the 8-week induction period treatmentABTECT-1 and ABTECT-2 studies achieved placebo-adjusted clinical remission rates of 19.3% and 13.4%, respectively, which are already very excellent.What the market is most concerned about next isThe maintenance phase data of Obefazimod, scheduled for release in Q2 2026, might not be waited for by the acquirer as the acquisition cost could potentially keep increasing.FromIn the Phase II long-term extension study of Obefazimod, patientsThe clinical remission rate in the 48th week was as high as 67%, which has boosted some investors' confidence inConfidence in the maintenance period data. Although there are differences at baseline, overseas institutions generally believeIf Obefazimod can achieve a clinical remission rate exceeding 30% after placebo adjustment during the maintenance phase, then this drug will be an oral Best in class (benchmarking...Data on Rinvoq,Obefazimod has better safety and no black box warning.）。Of course, the final transaction result depends onAbivax Management's Balancing of Deal Price and Long-term Corporate Strategy: With the Market Value Now Approaching $10 Billion, Further Increases in Value and Premiums Could Lead to Even More Prolonged Negotiations. After All, There Have Been Similar Cases in the Past Where Biotech Firms Lost the Optimal M&A Window Due to Factors Such as Large Size and Pricing Disagreements.If Abivax can really be sold at a high price, it will be a strong boost for companies in China that are developing innovative oral drugs for IBD, such as oral IL-23 peptides, PDE4 inhibitors, and TYK2 inhibitors, among others.Disclaimer:
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