Pharmaceutical giant Eli Lilly announced Monday it will acquire Loxo Oncology for around $8 billion, the latest big transaction aimed at developing and monetizing new treatments for cancer.
The deal supplements Eli Lilly’s pipeline of cancer-oriented medicines with assets from Loxo, which was incorporated in 2013 and has a number of promising treatments at various stages of development.
Under the terms of Monday’s deal—which follows last week’s $74 billion announced takeover of Celgene by Bristol-Myers Squibb—Eli Lilly will pay $235 per share in cash, or about $8 billion, for Stanford, Connecticut-based Loxo.
The deal, which represents a premium of some 68 percent over Loxo Oncology’s closing share price on Friday, is expected to close by the end of the first quarter, the companies said in a statement.
Loxo’s product pipeline is centered on treating patients when there is an inappropriate DNA change that can be discovered through genomic testing. The company aims to develop targeted therapies that can impede the progression of these diseases.
A key driver for the deal because of near-term commercial potential is a treatment for lung, thyroid and some other tumors, Eli Lilly executives said on a conference call.
Eli Lilly executives said the company could still do additional acquisitions in the coming period.
“We’ll continue to look in oncology, as well as other therapeutic areas,” Eli Lilly Chief Executive David Ricks said on a conference call with analysts.