Eli Lilly & Co. will pay $960 million to purchase CoLucid Pharmaceuticals Inc. of Cambridge — a company with just seven employees — in a deal that will result in the drug giant buying back an experimental migraine headache treatment discovered in Lilly’s labs and licensed to CoLucid in 2005.
The sale, expected to be completed next month, reflects the rich premiums being paid for promising drug candidates, as well as the constantly shifting priorities of drug makers.
Lilly, based in Indianapolis, decided 12 years ago to spin off its migraine research programs, but in recent years it has sought to rebuild a franchise around pain management treatments. In 2014, it repurchased another experimental migraine therapy it had licensed to another Cambridge biotech company, paying an undisclosed sum to acquire the compound from Arteaus Therapeutics Inc.
CoLucid, founded in Durham, N.C., in 2005, moved to Cambridge in 2015 and went public that year in an initial public offering that raised $55 million. The company relied on a network of contract research and manufacturing organizations to advance its experimental drug to treat migraines, called lasmiditran, into late-stage clinical trials.
“This has the opportunity to be the first new mechanism approved for acute migraines in two decades,’’ CoLucid chief executive Thomas P. Mathers said in an interview. “We’ve carried the ball a long way, and we felt Lilly had a great opportunity to pick up the ball and run with it.’’
Shares of CoLucid climbed $11.35 to $46.25 on Wednesday, gaining 32.5 percent. Lilly’s shares closed up 67 cents at $77.52, an increase of 0.8 percent.
More than 36 million Americans suffer from debilitating migraine headaches. Lasmiditran works to relieve pain without constricting blood vessels. It is aimed at patients who have, or are at risk for, cardiovascular disease along with those who are dissatisfied with current treatments.
“This is a great fit with our portfolio,’’ said Rob Conley, global business development leader for pain and core therapeutics at Lilly, which in 2015 opened an innovation center in Cambridge’s Kendall Square. He noted that Lilly has its own preventive treatment for chronic migraines in late-stage trials. “The two [drugs] together provide a more complete solution for patients,’’ Conley said.
CoLucid, which reported positive clinical results for lasmiditran last year, was on track to file a new drug application with the Food and Drug Administration in 2018 and launch the medicine as early as 2019, Mathers said. It’s not clear whether that timetable would change under Lilly.
Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.
