Lilly announced a new program to expand its R&D reach through a new program that has established three VC funds to help allay risk. Lilly will contribute $50 M to each fund and will rely on VC partners to raise an additional $600 M. See Fierce Biotech.
Targeted experimental drugs will be explored by virtual drug companies, with Lilly geting first right of refusal at licensing any properties that come out of the development program. In this manner, Lilly can expand its early stage pipeline without bearing all the financial risk. It can also cherry-pick the most promising candidates for advancement into phase II and III trials.
Said John Lechleiter, LIlly CEO, "This way we are not limited by our own resources and we can have more 'shots on goal'."
Posted by Bruce Lehr Feb 15th 2011.