Eli Lilly And Company (LLY) shares climbed Wednesday after reports surfaced that the pharmaceutical heavyweight is nearing a deal to acquire Ventyx Biosciences (VTYX), a move that could expand Lilly's footprint in inflammatory disease treatments.

The Deal Details

According to the Wall Street Journal, Eli Lilly is in advanced discussions to buy Ventyx for more than $1 billion, citing people familiar with the matter. That's a significant premium over Ventyx's market cap, which stood at just over $500 million as of Tuesday afternoon. For context, Indianapolis-based Lilly weighs in at roughly $1 trillion in market value, so this would be a relatively modest addition to its portfolio.

What Ventyx Brings to the Table

San Diego-based Ventyx focuses on developing oral drugs for inflammatory diseases like Crohn's disease and rheumatoid arthritis. But the company's pipeline extends beyond traditional inflammatory conditions—its drug candidates have shown potential in treating neurodegenerative diseases such as Parkinson's, along with certain heart-related conditions. One particularly interesting candidate is currently in mid-stage testing for cardiovascular disease associated with obesity.

The company's specialty is targeting the NLRP3 protein complex, which plays a critical role in inflammatory and immune responses. Ventyx has two experimental drugs designed to inhibit the excessive inflammatory activity that drives immune-related diseases, making it an attractive target for a pharma giant looking to bolster its immunology pipeline.

Market Reaction

At the time of writing, Eli Lilly shares were trading 3.81% higher at $1,104.45.