Indianapolis-based pharma giant Eli Lilly (LLY) said it would acquire late-stage immune-oncology company ARMO Biosciences (ARMO) for $1.6 billion, or $50 per share, in a move to bolster its oncology pipeline. Shares of the ARMO shot up 67% in the pre-market session on this news, while Lilly shares were slightly up.
The lead product of ARMO Biosciences is pegilodecakin, a cancer treatment that is currently undergoing Phase 3 trials. The company also boasts of multiple immune-oncology products that are in various stages of clinical pipeline studies.
It’s worth noting that Eli Lilly recently appointed researcher Leena Gandhi to head its immuno-oncology work. Also, the Dave Ricks-led company commented in its first quarter earnings call that it is working on some deals to bolster its cancer pipeline.
![Cancer treatment Eli Lilly](https://news.alphastreet.com/wp-content/uploads/2018/05/Eli_Lilly_acquires_ARMO_Biosciences-300x200.jpg)
ARMO, which went public in January this year, reported its first fiscal year results in early April. For the fiscal year ended December 31, 2017, the company’s net loss widened to $42.4 million, or $28.52 per share, from $33.6 million, or $26.25 per share, in the previous year. Last month, Eli Lilly lifted its outlook for the year and reported first quarter 2018 results, which surpassed analysts’ estimates.
This all-cash transaction, which is expected to close at end of second quarter, will be reflected in Eli Lilly’s GAAP guidance, while it will not affect the non-GAAP results of the company.
Even though this deal is not as big as this week’s Takeda-Shire transaction, it shows that the big pharma players are looking for potential acquisition opportunities to strengthen their product portfolios.
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