Eli Lilly (NYSE:LLY) said on Monday it would buy Loxo Oncology (NASDAQ: LOXO) for about $8 billion in cash, buying into a portfolio of targeted medicines to treat cancers.
The offer of $235 per share in cash represents a premium of about 68% to Loxo’s Friday close.
Last year, U.S. regulators 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.
Loxo Oncology is developing a pipeline of targeted medicines focused on such cancers that can be detected by genomic testing, including: LOXO-292, a first-in-class oral RET inhibitor that has been granted Breakthrough Therapy designation by the FDA for three indications, with an initial potential launch in 2020.
LOXO-292 targets cancers with alterations to the rearranged during transfection (RET) kinase. RET fusions and mutations occur across multiple tumor types, including certain lung and thyroid cancers as well as a subset of other cancers.
Deutsche Bank is Lilly’s financial adviser and Weil, Gotshal & Manges is its legal adviser. Goldman Sachs is the financial adviser, while Fenwick & West is legal adviser to Loxo.
The Lilly acquisition comes a week after Bristol-Myers Squibbannounced plans to buy Celgene in a blockbuster $74-billion deal.
Said Lilly official Daniel Skovoronsky, "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."
Lilly shares faded $1.19, or 1%, to $113.47, while Loxo shares skyrocketed $92.58, or 66.2%, to $232.45 in early Monday trading
