Days after a jury priced a broken Lilly partnership at $90 million, Ricks promises bigger deals

Ricks promises bigger deals from a record war chest

In Milan on 28 September, on the sidelines of the European diabetes congress, Lilly chief executive Dave Ricks said investors should expect↗ "slightly larger" acquisitions on the scale of the $7.8 billion Centessa buyout, as the world's largest drugmaker hunts the "white spaces" of science: infectious disease, women's health and psychiatric conditions ¹. Lilly has signed about 40 deals this year worth more than $20 billion, its biggest year ever, and Ricks cast the alternative as buybacks and dividends: "It's much more interesting to reinvest in human health" ¹.

A jury had just priced the last partnership

Four days earlier, on 24 September, a federal jury in San Francisco found Lilly breached the implied covenant of good faith and fair dealing↗ in its 2017 license with Nektar Therapeutics for the autoimmune drug rezpegaldesleukin, and awarded $90 million, with interest still to be set ²³. Nektar had sought about $1 billion ². The case, 3:23-cv-03943, was tried before Judge James Donato, with Kirkland & Ellis and Quinn Emanuel on the briefs ⁴⁵.

Three years, two failed trials, one rival buyout

The 2017 license paid Nektar $150 million upfront plus up to $250 million in milestones ⁵. In 2020, Lilly bought Dermira for about $1.1 billion, acquiring lebrikizumab, a rival to rezpeg that is now approved as Ebglyss ³⁶. After rezpeg missed primary endpoints in two Phase 2 trials, Lilly terminated the collaboration in 2023, and Nektar sued that August, calling it the "all-too-familiar story of a large pharmaceutical company elevating profits over all else" ⁵. Pushed off its October 2025 date by the government shutdown, the trial began 8 September 2026 ⁵⁸.

A rounding error for Lilly, 4.4 percent of Nektar

For Nektar, the award is $2.64 a share, about 4.4 percent of the stock, yet the shares closed down roughly 4 percent at $57.06 on 25 September ⁵. For Lilly it is less than half of one percent of a record $20 billion-plus deal year; the stock closed 29 September at $1,184.63, a hundredth of a percent from flat, on a market value near $1.06 trillion ¹⁶.

Lilly's answer: the correct amount is zero

Lilly says the jury confirmed it used commercially reasonable efforts on rezpeg↗ and awarded damages only on a secondary claim, and that "the correct amount is zero"; the company will seek reversal ³⁶. Canaccord Genuity analyst Edward Nash keeps any payout out of his Nektar model, since an appeal could mean months or years before a dollar arrives ⁵.

The price is still accruing

The court has yet to set the interest, and post-trial motions and an appeal clock come next ²³. Nektar has moved on regardless: a Phase 3 study of rezpeg in atopic dermatitis launched in July, and the company ended June with about $1 billion in cash ³⁶. Enforcing a Lilly partnership now has a market price: three years in federal court for less than half of one percent of a single year's deal budget.