Eli Lilly to buy Loxo Oncology for about US$ 8 billion in cancer drug bet

By PharmaCompass

2019-01-10

Impressions: 142 Article

Eli Lilly was the second major drugmaker to announce an acquisition at the start of 2019. The Indianapolis-based drug giant is acquiring a tiny startup — Loxo Oncology — for about US$ 8 billion in cash (US$ 235 per share). The offer represents a premium of about 68 percent to Loxo's January 4 close.

Loxo Oncology was founded in 2013 by oncologist Joshua Bilenker, whose idea for the company was simple — focus on cancer drugs that could kill the disease early with amazingly clear results, even if they only addressed rare diseases. With this acquisition, Eli Lilly is buying into a portfolio of targeted medicines to treat cancers.

Last year, the US Food and Drug Administration approved Loxo’s first commercial medicine — Vitrakvi — which was shown to be effective against a wide variety of cancers driven by a single, rare genetic mutation. The drug is sold in partnership with Bayer. It was approved on evidence that it can shrink tumors in 75 percent of patients whose cancer tests positive for a particular kind of genetic mutation.

Lilly said it will update its financial outlook to include the full purchase price of the acquisition when it announces its fourth-quarter earnings in February.

“We’d like to grow our presence in oncology. We have a good set of medicines there but we'd like to expand that because there’s so much exciting science for patients emerging in oncology to invest in,” Lilly CEO David Ricks told CNBC.

Loxo Oncology is developing a pipeline of targeted medicines focused on such cancers that can be detected by genomic testing.

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