INDIANAPOLIS?and?SOUTH SAN FRANCISCO, Calif.,?Aug. 25, 2021?/PRNewswire/ --?Eli Lilly and Company?(NYSE: LLY) and?Lycia Therapeutics, Inc.?today announced a multi-year research collaboration and licensing agreement focused on the discovery, development and commercialization of novel targeted therapeutics using Lycia's proprietary lysosomal targeting chimera, or LYTAC, protein degradation technology. Lycia uses its next-generation degradation approach to target the untapped extracellular proteome, including cell surface receptors and secreted proteins. The LYTAC platform may enable the development of several therapeutic modalities, including antibodies and small molecules, with the potential to inhibit many targets previously considered intractable across a spectrum of therapeutic areas and diseases. Under the terms of the agreement, the companies will utilize Lycia's LYTAC platform to discover and develop novel degraders for up to five targets that aim to address key unmet medical needs in?Lilly's therapeutic areas of focus, including immunology and pain.?Lilly?will be solely responsible for preclinical and clinical development of candidates and receives an exclusive worldwide license to commercialize potential medicines resulting from the agreement. "This collaboration with Lycia furthers?Lilly's strategy to utilize innovative new technology to treat challenging disease areas, such as immunology and pain," said?Ajay Nirula, M.D., Ph.D., vice president of immunology at?Lilly. "We believe Lycia's technology may allow us to develop targeted therapeutics that were not previously feasible and make advances for patients in areas of high unmet need." "We are extremely pleased to establish this strategic collaboration with?Lilly, a global leader in therapeutic innovation," said?Aetna Wun Trombley, Ph.D., President and CEO of Lycia. "With our differentiated LYTAC platform for targeted extracellular protein degradation, we look forward to collaborating with?Lilly?to advance novel therapies against challenging targets in underserved disease areas while we simultaneously advance our in-house pipeline of first-in-class LYTAC-based therapeutics." Lycia will receive an upfront payment of?$35 million. The company is also eligible to receive over?$1.6 billion?in potential milestone payments based on the achievement of prespecified preclinical, development and commercial milestones, as well as tiered royalties from mid-single to low double-digits on sales resulting from the agreement. This transaction will be reflected in?Lilly's reported results and financial guidance according to Generally Accepted Accounting Principles (GAAP). There will be no change to?Lilly's 2021 non-GAAP earnings per share guidance as a result of this transaction. About?Lycia Therapeutics, Inc. Lycia Therapeutics, Inc.?is a biotechnology company using its proprietary lysosomal targeting chimeras (LYTACs) platform to discover and develop first-in-class therapeutics that degrade extracellular and membrane-bound proteins that drive a range of difficult-to-treat diseases, including cancers and autoimmune conditions. Headquartered in?South San Francisco, Lycia was established in 2019 within founding investor?Versant Ventures'?Inception Therapeutics Discovery Engine in collaboration with academic founder?Carolyn Bertozzi, Ph.D., professor of chemistry and HHMI investigator at?Stanford University.?For more information, please visit?www.lyciatx.com. About?Eli Lilly and Company Lilly?is a global healthcare leader that unites caring with discovery to create medicines that make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe,?Lilly?employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. To learn more about?Lilly, please visit us at?www.lilly.com. C-LLY Lilly?Forward-Looking Statement This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) about the benefits of a collaboration between?Lilly?and Lycia Therapeutics,?Lilly's research and development strategy, and potential payments to Lycia in connection with the collaboration, and reflects?Lilly's current beliefs and expectations. However, as with any such undertaking, there are substantial risks and uncertainties in the process of drug research, development and commercialization. Among other things, there can be no guarantee that?Lilly?will realize the expected benefits of the collaboration, that the collaboration will yield commercially successful products or that?Lilly?will execute their strategy as expected. For a further discussion of these and other risks and uncertainties that could cause actual results to differ from?Lilly's expectations, please see?Lilly's most recent Forms 10-K and 10-Q filed with the?U.S. Securities and Exchange Commission.?Lilly?undertakes no duty to update forward-looking statements.