Eli Lilly to buy biotech Armo Biosciences for $1.6bn

Eli Lilly has agreed to buy biotech Armo Biosciences for around $1.6bn in cash, or $50 per share.

The deal will boost Lilly's clinical portfolio with the biotech's lead immuno-oncology asset, pegilodecakin, which is being studied in multiple tumour types, the company said on Thursday. Pegilodecakin is currently being studied in a phase 3 clinical trial in pancreatic cancer, as well as earlier-phase trials in lung and renal cell cancer, melanoma and other solid tumour types.

The business also has a number of other immuno-oncology product candidates in various stages of pre-clinical development.

Senior vice president and president of Lilly Oncology, Sue Mahony said: "At Lilly Oncology, we are dedicated to developing cancer medicines that will make a meaningful difference for patients. The acquisition of Armo BioSciences adds a promising next generation clinical immunotherapy asset to Lilly's portfolio of innovative oncology medicines."

Levi Garraway, senior vice president of global development and medical affairs, Lilly Oncology, said: "As we develop our immuno-oncology portfolio, Lilly will pursue medicines that use the body's immune system in new ways to treat cancer.

"We believe that pegilodecakin has a unique immunologic mechanism of action that could eventually allow physicians to offer new hope for many cancer patients."

The deal is expected to close by the end of the second quarter and Lilly said it will not have any impact on the group's 2018 non-GAAP earnings per share guidance.