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Eli Lilly to buy cancer pharma company for $8bn

Posted on 13 days ago by Laurentina Kennedy The RFT Group 012302400

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Eli Lilly to buy cancer pharma company for $8bn

The move to buy Loxo Oncology is the second multibillion-dollar cancer deal of the year by a major US pharma giant

Loxo is developing cancer treatments that target a tumors’ genetic markers regardless of where in the body they’re located

 Eli Lilly to buy cancer pharma company for $8bn 
 
US pharma giant Eli Lilly is to buy Loxo Oncology for about $8 billion (€7 billion) in cash, the second multibillion-dollar cancer deal of the year by a major US pharmaceutical company. The purchase is Lilly’s biggest takeover ever. Loxo will get $235 per share in cash, the companies said in a statement Monday. The biotechnology company is developing cancer treatments that target a tumors’ genetic markers regardless of where in the body they’re located. Lilly is offering a rich premium – 68 percent above Loxo’s closing stock price Friday and far above Loxo’s previous all-time high of $189.96, reached in July 2018. 
 
It’s another sign that drugmakers are willing to pay rich prices for assets after Bristol-Myers Squibb and Celgene announced a $74 billion cash-and-stock deal last week. Loxo shares rose 64 per cent to $230.05 before the market opened in New York. Lilly shares dropped 3.2 per cent to $111. Cancer focus Cancer has become a major area of focus for Lilly. Long a stalwart in diabetes, the company suffered a series of costly setbacks in efforts to develop what would have been the first treatment for Alzheimer’s disease. Under chief executive Dave Ricks, the company also spun off its animal-health unit, focusing the company further on human drugs. Unlike some past high-profile deals in cancer – like Celgene’s 2018 takeover of Juno Therapeutics and Gilead Sciences’s 2017 acquisition of Kite Pharma – Celgene and Loxo have approved products already on the market. While that might sound mundane by the standards of other industries, biotechnology companies can research their therapies for years before their first product begins bringing in sales. 
Marketed drug Loxo’s one marketed drug, Vitrakvi, or larotrectinib, is the leader in the field of TRK inhibitors, medicines that aim to shrink tumors by targeting a rare genetic anomaly. Partnered with German drugmaker Bayer AG, it won US Food and Drug Administration approval last year. Analysts expect Loxo to generate $1.14 billion in sales in 2023, according to estimates compiled by Bloomberg. They expect about $200 million in revenues this year. The deal is expected to close by the end of March, the companies said in the statement. 
 
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