- Eli Lilly & Co. announced Thursday morning it will acquire Armo BioSciences for $50 per share in an all-cash deal worth $1.6 billion.
- Expected to close in the second quarter, the deal will give Lilly Armo's late-stage immuno-oncology asset pegilodecakin, a PEGylated IL-10 that the company says has shown clinical benefit as a single agent and in combination with chemotherapy as well as other immunotherapies.
- Pegilodecakin is already in Phase 3 testing as a pancreatic cancer treatment, and is being studied in earlier trials for melanoma, lung and renal cancers. Armo also has preclinical candidates.
Lilly has long been a diabetes company, but pricing pressures in the space and a glut of competition have pushed the Indianapolis pharma to branch out into other areas of growth — specifically pain and cancer. Even though it has been building a pipeline of oncology assets, Lilly is still trailing behind giants in the space like Merck & Co., Bristol-Myers Squibb and Novartis.
Last summer, the company laid out plans to focus on its CDK 4/6 inhibitor Verzenio (abemaciclib) as well as six early- to mid-stage assets in its pipeline. In February, Verzenio won a broader approval from the Food and Drug Administration as a first-line treatment for a certain metastatic disease, setting it up to better compete with drugs from Pfizer and Novartis.
The company also flagged seven assets in its oncology pipeline that it plans to partner or out-license.
Lilly's goal is to develop combination therapies that potentially could give it a shot at being either first-in-class or best-in-class. The acquisition of Armo brings Lilly one step closer to reaching that goal.
Armo's pegilodecakin showed promising data in its Phase 1/2 study, and is expected to have further trial read-outs in 2019, as well as 2020. The company began trading on the public market in January. It brought in $128 million through its IPO by selling 7.5 million share at $17 apiece, above the expected range.