Eli Lilly/Loxo Oncology
Deal value: $8 billion
Date announced: Jan. 7, 2019
Eli Lilly’s $8 billion takeover of Loxo Oncology was one of several mergers and acquisitions focused on cancer treatments in 2019 and the Indianapolis drugmaker’s largest bet in the field ever. The $235-per-share price marked a decent 68% premium over Loxo’s previous close.
Even though there wasn’t a fierce bidding war for a buyout, Loxo was engaged in licensing discussions ahead of the deal announcement, according to a securities filing. Those rejected licensing tie-ups suggest Lilly paid plenty to satisfy Loxo, SVB Leerink analysts argued. “In our view, this indicates broad industry interest in late clinical/early commercial targeted oncology stories,” they wrote in a note last January.
On the face of it, the deal would have given Lilly Vitrakvi, a first-in-class oral TRK inhibitor approved by the FDA in 2018 to treat tumors with a specific genetic mutation regardless of their location. But the buyout triggered an option for Loxo partner Bayer to take full control of the drug, along with a follow-on TRK drug, LOXO-195. The German conglomerate, already under investor pressure to beef up its pharma pipeline, jumped on the opportunity.
But Lilly had probably seen that day coming. When showcasing Loxo’s offerings in the deal announcement on Jan. 7, 2019, the Indianapolis drugmaker instead featured potential first-in-class oral RET inhibitor LOXO-292 and BTK inhibitor LOXO-305 at the top of its list.
Both those drugs have turned up positive results recently. In the case of LOXO-292, or selpercatinib, a 68% objective response rate (ORR) in heavily treated RET fusion-positive non-small cell lung cancer was observed in the phase 1/2 Libretto-001 trial, according to data presented in September at the World Conference on Lung Cancer. At the data cutoff, these pretreated patients had lived a median of 18.4 months without cancer progression or death. In the treatment-naïve arm, the ORR hit 85%. The company is also planning a phase 3 study in previously untreated patients.
As for LOXO-305, early phase 1/2 data showed an ORR of 77% in 13 evaluable chronic lymphocytic leukemia patients for whom an average of four prior lines of treatment had failed. In the mantle cell lymphoma cohort, Lilly put the ORR at 50% for six patients up for assessment. If eventually successful, the drug would enter a crowded BTK realm, with AbbVie and Johnson & Johnson’s market-leading Imbruvica, AstraZeneca’s fast-growing Calquence and BeiGene’s newly approved Brukinsa.
Oncology has been one of Lilly’s key focus areas alongside diabetes, immunology and neuroscience. But not all its investments there have paid off. Pegilodecakin, the centerpiece of its $1.6 billion buyout of immuno-oncology biotech Armo Biosciences in 2018, recently failed a pancreatic cancer trial. Lilly soon canned that project, but it's keeping the drug’s potential use in other cancer types open.
Now, Lilly has tapped Loxo’s team to steer its oncology R&D warship. After its former cancer research chief Levi Garraway, M.D., Ph.D., left, Lilly combined Lilly Research Laboratories with Loxo Oncology. The new R&D organization, taking Loxo’s name, is led by Josh Bilenker, M.D., Jacob Van Naarden and Nisha Nanda, Ph.D., who were the biotech’s CEO, chief operating officer and chief development officer, respectively.
Lilly also brought on David Hyman, M.D., most recently Memorial Sloan Kettering Cancer Center's chief of early drug development service, as the new unit’s chief medical officer.