Lilly Acquires Loxo Oncology in $8 Billion Deal

Daniel Skovronsky, MD, PhD

Eli Lilly and Company has announced that it will acquire the biopharmaceutical company Loxo Oncology for $235 per share in cash or an estimated $8 billion. The transaction is expected to close by end of March 2019.¹

The merger will add the recently FDA-approved oral TRK inhibitor larotrectinib (Vitrakvi), the investigational oral RET inhibitor LOXO-292, the investigational BTK inhibitor LOXO-305, and LOXO-195, a follow-on TRK inhibitor, to Lilly’s oncology portfolio.

"Using tailored medicines to target key tumor dependencies offers an increasingly robust approach to cancer treatment," said Daniel Skovronsky, MD, PhD, chief scientific officer of Lilly and president of Lilly Research Laboratories, in a press release. "Loxo Oncology's portfolio of RET, BTK and TRK inhibitors targeted specifically to patients with mutations or fusions in these genes, in combination with advanced diagnostics that allow us to know exactly which patients may benefit, creates new opportunities to improve the lives of people with advanced cancer."

Following the closing of the tender offer, Lilly will acquire any shares of Loxo Oncology that are not tendered into the tender offer through a second-step merger at the tender offer price.

The offer represents a premium of approximately 68% to Loxo Oncology's closing stock price on January 4, 2019, which was the last trading day before the transaction was announced. Additionally, a Loxo Oncology shareholder, beneficially owning approximately 6.6% of Loxo Oncology's outstanding common stock, has agreed to tender its shares in the tender offer.

The transaction will be reflected in Lilly's financial results and financial guidance according to Generally Accepted Accounting Principles. Additionally, Lilly will update its 2019 financial guidance, including the expected impact from the Loxo Oncology acquisition, as part of its fourth-quarter and full-year 2018 financial results announcement on February 13, 2019.

Lilly’s oncology portfolio includes the FDA-approved agents abemaciclib (Verzenio), pemetrexed, ramucirumab (Cyramza), cetuximab (Erbitux), gemcitabine, olaratumab (Lartruzo), and necitumumab (Portrazza).

Regarding Loxo Oncology’s products, the FDA granted an accelerated approval to larotrectinib for the treatment of adult and pediatric patients with solid tumors that have an NTRK gene fusion without a known acquired resistance mutation, are metastatic or where surgical resection is likely to result in severe morbidity, and have no satisfactory alternative treatments or that have progressed following treatment in November 2018.

The approval was based on findings from patients with TRK-positive tumors enrolled across 3 clinical trials. In results that were published in the New England Journal of Medicine in February 2018, the agent led to a 75% objective response rate (95% CI, 61-85) by independent review and 80% (95% CI, 67-90) by investigator assessment in 55 evaluable patients. Per the independent assessment, there were 7 complete responses (13%), 34 partial responses (62%), and 7 patients (13%) with stable disease.

Seventy-one percent of responses were ongoing at 1 year, and 55% of patients remained progression-free at 1 year. At a median follow-up of 8.3 months, the median duration of response had not been reached. Also, at a median follow-up of 9.9 months, the median progression-free survival had not been reached.

Data have also been reported with LOXO-292, which was granted a breakthrough therapy designation for the treatment of patients with advanced RET fusion—positive thyroid cancer who require systemic therapy, have progressed on prior treatment, and have no other acceptable alternative treatment options in October 2018.

This designation supplements 2 other breakthrough therapy designations granted to LOXO-292 in September 2018 for the treatment of patients with RET fusion—positive non–small cell lung cancer (NSCLC) or RET-mutant medullary thyroid cancer (MTC).

The decision is based on results from the ongoing phase I/II LIBRETTO-001 trial (NCT03157128), which is the basis for the other 2 breakthrough therapy designations. Updated interim data of the study, which included patients with RET-mutant MTC and RET fusion-positive thyroid cancer (n = 38), had an additional 3.5 months of follow-up. At a median follow-up of 8.4 months, results showed that 94% (n = 16) responding of patients with RET-mutant patients with MTC remained on therapy. A total 100% (n = 7) of responding patients with RET fusion-positive thyroid cancer remained on therapy, with a median follow-up of 8.5 months.

Moreover, the inclusion of new restaging data for the most recently enrolled patients demonstrated a 59% ORR (56% confirmed ORR) in the presented subset of patients with RET-mutant MTC, and a 78% confirmed ORR (95% CI, 40-97) in the RET fusion-positive thyroid cancer subset.

"We are gratified that Lilly has recognized our contributions to the field of precision medicine and are excited to see our pipeline benefit from the resources and global reach of the Lilly organization," said Josh Bilenker, MD, chief executive officer of Loxo Oncology. "Tumor genomic profiling is becoming standard-of-care, and it will be critical to continue innovating against new targets, while anticipating mechanisms of resistance to available therapies, so that patients with advanced cancer have the chance to live longer and better lives."

References

1. Lilly Announces Agreement To Acquire Loxo Oncology. Eli Lilly and Company. Published January 7, 2018. https://bit.ly/2C8cFd8?rel=0" . Accessed January 7, 2018.
2. Drilon A, Laetsch TW, Kummar S, et al. Efficacy of larotrectinib in TRK fusion—positive cancers in adults and children. N Engl J Med. 2018;378:731-739. doi: 10.1056/NEJMoa1714448.
3. Drilon AE, Subbiah V, Oxnard GR, et al. A phase 1 study of LOXO-292, a potent and highly selective RET inhibitor, in patients with RET-altered cancers. J Clin Oncol. 2018;36(suppl; abstr 102).