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Lilly buys Armo for $1.6bn to bolster immuno-oncology pipeline

Armo is developing IL-10 drugs for potential combination with established immunotherapies

Eli Lilly

Eli Lilly is looking to keep pace with the leaders in immuno-oncology sector, and has just agreed a $1.6bn acquisition of Armo BioSciences to help close the gap.

The $50-per-share cash deal will give Lilly access to Armo’s lead cancer immunotherapy pegilodecakin, a long-acting, pegylated formulation of interleukin-10 currently in a phase III trial in pancreatic cancer, as well as earlier-stage trials in other advanced solid tumours including melanoma, non-small cell lung cancer (NSCLC), and renal cell carcinoma (RCC).

High concentrations of IL-10 are thought to activate an immune response against cancer cells and – as both IL-10 receptors and PD-1 are both expressed on CD8+ T lymphocytes – Armo has said it thinks that the drug will increase the activity of PD-1/PD-L1 checkpoint inhibitors. Lilly already has a PD-L1 drug in phase I testing, while Armo also has a PD-1 antibody heading for clinical trials as well as recombinant IL-12 and IL-15 drugs in preclinical development.

For years, Lilly’s presence in cancer has been led by lung cancer chemotherapy drug Alimta (pemetrexed), which brought in $2bn in sales last year but has been gradually declining from a peak of around $2.8bn in 2014 as a result of patent expirations. It also sells gastrointestinal cancer antibodies Erbitux (cetuximab) and recently launched Cyramza (ramucirumab).

It doesn’t feature among the first wave of immuno-oncology players such as Merck & Co, Bristol-Myers Squibb and Roche, and most of its cancer immunotherapy candidates are in phase I with only one – type II multikinase inhibitor merestinib – in phase II for biliary tract cancer.

The deal with Armo gives it a late-stage candidate that could piggyback on established PD-1/PD-L1 drugs, as well as fleshing out its early pipeline, and comes just a few weeks after the company appointed New York University School of Medicine clinician Leena Gandhi to spearhead its immuno-oncology R&D unit.

“As we develop our immuno-oncology portfolio, Lilly will pursue medicines that use the body's immune system in new ways to treat cancer," said Levi Garraway Lilly Oncology’s senior vice president, global development and medical affairs. “We believe that pegilodecakin has a unique immunologic mechanism of action that could eventually allow physicians to offer new hope for many cancer patients.”

For Armo, the deal marks the culmination of a lightning-fast transition from launch in 2013 as a vehicle to develop Merck cast-off pegilodecakin, to becoming a public company after an IPO just four months ago, and now set to be subsumed into a big pharma group. The takeover is expected to close by the end of the second quarter.

Article by
Phil Taylor

10th May 2018

From: Research

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