Lilly further boosts cancer pipeline with $8bn Loxo acquisition

In the second big M&A deal of the year following BMS’s acquisition of Celgene, Eli Lilly has announced it will acquire precision cancer medicine specialists Loxo Oncology in a deal worth $8 billion.

The acquisition is the largest and latest in a series of transactions by Lilly to broaden its cancer treatment efforts, which include its $1.6 billion purchase of ARMO BioSciences in May last year.

Loxo is a biopharmaceutical company focused on targeted medicines for cancers that are uniquely dependent on single gene abnormalities that can be detected by genomic testing. It won its first approval in November when its Vitrakvi (larotrectinib) became the first TRK inhbitor to be approved by the FDA.

Vitrakvi and its follow-on TRK inhibitor LOXO-195 were co-developed by Bayer, who paid $400 million for the rights to the drug.

Loxo’s other drugs include LOXO-292, a first-in-class oral RET inhibitor that has been granted Breakthrough Therapy designation by the FDA for three indications. LOXO-292 targets cancers with alterations to the rearranged during transfection (RET) kinase. RET fusions and mutations occur across multiple tumour types, including certain lung and thyroid cancers as well as a subset of other cancers.

Another pipeline product, LOXO-305, is an oral BTK inhibitor currently in phase 1/2 that targets cancers with alterations to the Bruton's tyrosine kinase (BTK), and is designed to address acquired resistance to currently available BTK inhibitors.

“Using tailored medicines to target key tumor dependencies offers an increasingly robust approach to cancer treatment”, said Daniel Skovronsky, Lilly's chief scientific officer and president of Lilly Research Laboratories. “Loxo Oncology's portfolio of RET, BTK and TRK inhibitors targeted specifically to patients with mutations or fusions in these genes, in combination with advanced diagnostics that allow us to know exactly which patients may benefit, creates new opportunities to improve the lives of people with advanced cancer.”

“We are gratified that Lilly has recognised our contributions to the field of precision medicine and are excited to see our pipeline benefit from the resources and global reach of the Lilly organisation”, said Josh Bilenker, chief executive officer of Loxo Oncology.

“Tumor genomic profiling is becoming standard-of-care, and it will be critical to continue innovating against new targets, while anticipating mechanisms of resistance to available therapies, so that patients with advanced cancer have the chance to live longer and better lives.”

Under the terms of the agreement, Lilly will commence a tender offer to acquire all outstanding shares of Loxo Oncology for a purchase price of $235.00 per share in cash, or approximately $8 billion. Following the successful closing of the tender offer, Lilly will acquire any shares of Loxo Oncology that are not tendered into the offer through a second-step merger at the tender offer price.