Business, M&A

Are more immuno-oncology buyouts on the menu at Eli Lilly’s executive suite?

Flush with cash following the Elanco spinoff, Eli Lilly execs are talking up the chances of executing more near-term buyouts like their $1.6 billion Armo acquisition earlier this year.

Joshua Smiley

Company CFO Joshua Smiley told Reuters that they are steering clear of the Big Pharma mergers — no surprise there — while reiterating the recent talk at Lilly about executing some new acquisitions after relying largely on its internal pipeline for new product development. 

The Armo deal signaled an aggressive move into immuno-oncology, which Lilly followed with a key new hire and Monday’s deal to sign up NextCure for an I/O discovery pact.

“The Armo deal that we did earlier this year, we’ll look to do more of those,” said the CFO. “We got a little bit less than US$4 billion in the third quarter as a function of the first step of our Elanco divestiture and we’ll put that money (to use) against our capital priorities.”

And that may well mean more moves into fresh I/O territory, where Lilly is playing catchup with the industry’s leading companies. It would also mean competing with companies that have a big yen for similar deals, which apparently includes GlaxoSmithKline, perhaps Novartis and other majors focusing increased attention on cancer therapies. 

The $2 billion to $5 billion bolt-on fits the sweet spot for most of the majors.


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