ARMO BioSciences, Inc. (NASDAQ: ARMO) shares rose after Eli Lilly and Company (NYSE: LLY) announced plans to acquire ARMO BioSciences for $50 per share, or approximately $1.6 billion, in an all-cash transaction.
ARMO is a late-stage immuno-oncology company that is developing a pipeline of novel, proprietary product candidates designed to activate the immune system of cancer patients to recognize and eradicate tumors.
The acquisition will bolster Lilly's immuno-oncology program through the addition of ARMO's lead product candidate, pegilodecakin, a PEGylated IL-10 which has demonstrated clinical benefit as a single agent, and in combination with both chemotherapy and checkpoint inhibitor therapy, across several tumor types.
Pegilodecakin is currently being studied in a Phase 3 clinical trial in pancreatic cancer, as well as earlier-Phase trials in lung and renal cell cancer, melanoma and other solid tumor types. ARMO also has a number of other immuno-oncology product candidates in various stages of pre-clinical development.
Said Lilly Senior Official Sue Mahony, "At Lilly Oncology, we are dedicated to developing cancer medicines that will make a meaningful difference for patients.
"The acquisition of ARMO BioSciences adds a promising next generation clinical immunotherapy asset to Lilly's portfolio of innovative oncology medicines."
The transaction is expected to close by the end of the second quarter of 2018, subject to customary closing conditions, including receipt of required regulatory approvals and the tender of a majority of the outstanding shares of ARMO's common stock. Very shortly after the closing of the tender offer, Lilly will acquire any shares of ARMO that are not tendered into the tender offer through a second-step merger at the tender offer price.
ARMO shares vaulted $19.99, or 67%, to $49.81, while Lilly shares gained $1.32, or 1.7%, to $80.59.
