Eli Lilly to Acquire Loxo Oncology for $8 Billion to Strengthen Oncology Pipeline

VCBeat (WeChat Official Account: vcbeat) has learned that Loxo Oncology (NASDAQ: LOXO), an anti-cancer drug development company, issued an official announcement on January 7, announcing its acquisition by Eli Lilly. According to the final agreement announced by both companies, Eli Lilly will acquire Loxo Oncology for $235 per share in cash, amounting to approximately $8 billion. The transaction is expected to be completed in the first quarter of 2019.

Loxo Oncology is a biopharmaceutical company focused on developing and commercializing highly selective medicines for patients with genomically defined cancers. The company is developing a portfolio of targeted therapies, primarily treating cancers driven by single-gene alterations that can be detected through genomic testing. For cancer patients harboring these genomic alterations, targeted therapies hold significant potential for treatment.

Loxo Oncology’s pipeline of drug combinations for targeted cancer therapy includes:

--LOXO-292: Loxo-292 is an oral RET inhibitor that has received FDA Breakthrough Therapy designation for three indications and is expected to be launched in 2020. Loxo-292 targets cancers driven by rearranged during transfection (RET) kinase alterations. RET fusions and mutations occur in various tumor types, including certain lung and thyroid cancers, as well as other malignancies.

--LOXO-305 is an oral BTK inhibitor currently in Phase I/II clinical trials. LOXO-305 modulates Bruton's tyrosine kinase to influence cancer progression, aiming to address acquired resistance to currently available BTK inhibitors. BTK is a potent molecular target identified in numerous B-cell leukemias and lymphomas.

--Vitrakvi is an oral TRK inhibitor developed and commercialized in collaboration with Bayer, which has recently received approval from the U.S. Food and Drug Administration (FDA). Upon its initial FDA approval, Vitrakvi became the first gene abnormality-targeting therapy demonstrated to be effective across multiple cancer types.

--LOXO-195: Loxo Oncology and Bayer are also investigating LOXO-195, a next-generation TRK inhibitor, for the treatment of resistance to TRK inhibition. The product is expected to be launched in 2022.

Anne White, President of Lilly Oncology, stated, “Lilly is committed to developing innovative, breakthrough medicines that will bring meaningful change to cancer patients, helping them live longer and healthier lives. The acquisition of Loxo Oncology expands our portfolio into the areas of precision medicines and cancers driven by specific genetic abnormalities. The ability to target tumor dependencies in these populations will be a key component of Lilly Oncology’s strategy.”

Under the terms of the agreement, Eli Lilly will acquire all outstanding shares of Loxo Oncology for $235 per share in cash (approximately $8 billion). The transaction is not subject to any financing conditions and is expected to be completed by the end of the first quarter of 2019, subject to customary closing conditions, including obtaining necessary regulatory approvals and tendering a majority of Loxo Oncology’s issued ordinary shares. Upon successful completion of the tender offer, Eli Lilly will effect a second-step merger at the same price as the tender offer to acquire any remaining shares of Loxo Oncology not tendered in the offer.

The tender offer represents a premium of approximately 68% over Loxo Oncology’s closing share price on January 4, 2019, the last trading day prior to the announcement of the transaction. The Board of Directors of Loxo Oncology has recommended that Loxo Oncology’s shareholders tender their shares in the tender offer. Furthermore, shareholders of Loxo Oncology who beneficially own approximately 6.6% of its outstanding common stock have agreed to tender their shares in the tender offer.

This acquisition marks the largest and most recent in a series of deals by Eli Lilly to expand its oncology portfolio, enabling the company to secure leading cancer treatment solutions. VCBeat will continue to monitor this development.