Eli Lilly shares are trading higher in the US Thursday after the drugs firm announced it will acquire AMRO BioSciences for $1.6 billion. The move will strengthen Eli Lilly’s cancer drug pipeline in a lucrative industry.
By 1620 BST, Eli Lilly shares were 1.56% higher at $80.48. The stock fell sharply in January but has been gaining ground since then.
Eli Lilly’s cancer drug expansion
Eli Lilly said it is purchasing ARMO BioSciences for $50 per share, a premium to the $29.80 level the shares were changing hands for Wednesday, in an all-cash transaction. The deal is expected to close by the end of the second quarter.
ARMO shares soared to $49.84 in Thursday morning trading.
ARMO BioSciences is developing a number of cancer drugs which will bolster Eli Lilly’s future offerings in the area.
Eli Lilly bets on Pegilodecakin
Pegilodecakin, a PEGylated IL-10, is ARMO’s lead drug candidate. Testing has shown it has clinical benefit on its own and in combination with other cancer treatments, including chemotherapy.
“At Lilly Oncology, we are dedicated to developing cancer medicines that will make a meaningful difference for patients,” said Sue Mahony, Ph.D., Lilly senior vice president and president of Lilly Oncology.
“The acquisition of ARMO BioSciences adds a promising next generation clinical immunotherapy asset to Lilly's portfolio of innovative oncology medicines,” Mahony said.
ARMO was also upbeat on the news.
“RMO is proud of the work we have done to advance the study of immunotherapies and of the development of pegilodecakin to-date," said Peter Van Vlasselaer, Ph.D., President and Chief Executive Officer of ARMO BioSciences.
“Given the resources that Lilly, a leader in oncology R&D, can bring to bear to maximize the value of pegilodecakin and the rest of the ARMO pipeline, we believe it is in the best interest of ARMO, our stockholders and the patients we serve, to execute this transaction,” Van Vlasselaer said.