Play­ing catch-up, Eli Lil­ly swoops in with $1.6B cash deal for Ar­mo Bio and its promis­ing PhI­II can­cer drug

Eli Lil­ly’s BD team is on the march, and as promised they’re stay­ing care­ful­ly fo­cused on on­col­o­gy.

This morn­ing Lil­ly $LLY an­nounced that it has ac­quired Ar­mo Bio­Sciences $AR­MO for $1.6 bil­lion in cash — just a few months af­ter their suc­cess­ful IPO de­but on Nas­daq. This is a biotech that in­de­pen­dent in­vestor Brad Lon­car re­cent­ly dubbed as the “next Nek­tar,” com­par­ing Ar­mo to one of the dar­lings in im­muno-on­col­o­gy which al­so has a strat­e­gy in­volv­ing cy­tokine im­muno-stim­u­la­to­ry ther­a­pies.

Levi Gar­raway

Lil­ly is pay­ing $50 a share, which im­me­di­ate­ly trig­gered a 67% spike on the stock this morn­ing as in­vestors rushed in to take ad­van­tage of the lat­est bolt-on deal.

The jew­el in the crown for Lil­ly here is pegilode­cakin, a PE­Gy­lat­ed IL-10 that is now in a piv­otal study af­ter demon­strat­ing ear­ly-stage suc­cess in sev­er­al tu­mor types. The Phase III is for pan­cre­at­ic can­cer, with tri­als un­der­way for lung and re­nal cell can­cer, melanoma and oth­er sol­id tu­mor types. Lil­ly al­so high­light­ed some pre­clin­i­cal can­di­dates it’s pick­ing up.

The big idea here falls right in the sweet spot of the cur­rent I/O rave. The lead drug is de­signed to spur the pro­lif­er­a­tion of CD8+ T cells in pa­tients, im­prov­ing prog­no­sis and length­en­ing the sur­vival of can­cer pa­tients. 

An­a­lysts fol­low­ing Lil­ly have been track­ing the ex­ec­u­tive team’s keen in­ter­est in plung­ing di­rect­ly in­to I/O af­ter get­ting left be­hind by lead­ers like Mer­ck and Bris­tol-My­ers Squibb. Just a few days ago the com­pa­ny added to the grow­ing ev­i­dence of a break­out move by re­cruit­ing Leena Gand­hi, an in­ves­ti­ga­tor at the Perl­mut­ter Can­cer Cen­ter at NYU Lan­gone Health and a Dana-Far­ber vet, to head up its im­muno-on­col­o­gy re­search work. Gand­hi played a big role in one re­cent Keytru­da pro­gram and she’ll now be putting her know-how to use for Lil­ly.

Lil­ly could eas­i­ly af­ford a string of these bolt-on deals, adding to a string of M&A pacts topped by Take­da’s $62 bil­lion Shire buy­out. Af­ter a lengthy drought of deals, big play­ers are clear­ly will­ing to fork over ma­jor pre­mi­ums to beef up their pipelines and add cat­a­lysts to their cal­en­dars.

And Lil­ly sig­naled it’s on­ly be­gun to wheel and deal.

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


Im­age: SHUT­TER­STOCK

Robert Bradway (Photographer: Scott Eisen/Bloomberg via Getty Images)

UP­DAT­ED: Am­gen snaps up can­cer drug play­er Five Prime, adding PhI­II-ready FGFR2b drug in $2B M&A play

Amgen is making a long-awaited move on the M&A side, buying South San Francisco-based Five Prime $FPRX for close to $2 billion and adding a slate of new cancer drugs to the pipeline.

Amgen is paying $38 a share, putting the deal value at $1.9 billion. The stock closed at $21.26 last night, giving investors a 78% premium.

The jewel in the crown of this deal is bemarituzumab, which Amgen describes as a first-in-class, Phase III-ready anti-FGFR2b antibody. Amgen was drawn to the bargaining table by Five Prime’s mid-stage data on gastric cancer, satisfied by PFS and OS data helping to validate FGFR2b as a target. Amgen researchers will now expand on the R&D program in other epithelial cancers, including lung, breast, ovarian and other cancers.

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The top 100 bio­phar­ma VCs, Bob Brad­way places $2B bet in can­cer, gene edit­ing pi­o­neer's new big idea, and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

Before diving in, we had some news to share: Endpoints is launching a premium weekly report focusing on all things regulatory. Coverage will be led by our new senior editor, Zachary Brennan, who joins us from POLITICO. Arsalan Arif has more details in his Publisher’s Note.

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The 2021 top 100 bio­phar­ma in­vestors: As the pan­dem­ic hit and IPOs boomed, VCs swung in­to ac­tion like nev­er be­fore

The global pandemic may have roiled economies, killed hundreds of thousands and throttled entire industries, but the only effect it had on biopharma venture investing was to help turbocharge the field to giddy new heights.

Below you’ll find the new top 100 venture investors in the industry, ranked by the number of deals they were publicly involved in, as tracked by DealForma chief Chris Dokomajilar. The numbers master then calculated the estimated amount of money they put into each deal — divvying up the cash by the number of players — to indicate how they managed their syndicates.

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Bruce Cozadd, Jazz CEO (Jazz Pharmaceuticals)

Jazz CEO Bruce Cozadd cam­paigned for 6 months to buy GW Phar­ma. A 90% pre­mi­um sealed the deal — along with $17.6M in ‘re­ten­tion’ in­cen­tives

Jazz CEO Bruce Cozadd didn’t beat around the bush.

In his first video meeting with GW Pharma chief Justin Gover last July 8, he offered to pay $172 a share to get the company, which had beaten the odds in getting its remarkable cannabinoid drug Epidiolex across the regulatory finish line for epilepsy. GW’s stock closed at $129 that day.

Cozadd had already done his homework on the financing to make sure he could swing it the way he wanted. He just needed to do some due diligence before making the non-binding bid firm.

Af­ter three years of courtship (and turn­downs), Mer­ck pounced on the first glance of clin­i­cal da­ta in $1.85B Pan­dion takeover

It’s almost become cliché for biotech executives to talk about the importance of keeping your options open and being prepared to go all the way. But when it comes to negotiating with a giant like Merck, a little patience can indeed go a long way.

Just ask Pandion Therapeutics.

Days ago we already learned that Merck is shelling out $1.85 billion to pick up the biotech and its slate of autoimmune hopefuls. What we didn’t know until the SEC disclosure dropped Thursday is that the deal comes after Pandion turned down two other proposals from Merck over the past three years and held out until the last minute for a sweetened deal.

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David Liu (Casey Atkins Photography courtesy Broad Institute)

David Liu has a new big idea: pro­teome edit­ing. It could one day shred tau, RAS and some of the worst dis­ease-caus­ing pro­teins

Before David Liu became famous for inventing new forms of gene editing, he was known around academia in part for a more obscure innovation: a Rube Goldberg-esque system that uses bacteria-infecting viruses to take one protein and turn it into another.

Since 2011, Liu’s lab has used the system, called PACE, to dream up fantastical new proteins: DNA base editors far more powerful than the original; more versatile forms of the gene editor Cas9; insecticides that kill insecticide-resistant bugs; enzymes that slide synthetic amino acids into living organisms. But they struggled throughout to master one of the most common and powerful proteins in the biological world: proteases, a set of Swiss army knife enzymes that cut, cleave or shred other proteins in everything from viruses to humans.

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UP­DAT­ED: Not 3 weeks af­ter tak­ing Hu­ma­cyte pub­lic, Ra­jiv Shuk­la launch­es an­oth­er blank check com­pa­ny

One of biotech’s earliest SPAC investors is back with another blank-check company, less than a month after his last effort announced its intent to merge.

Rajiv Shukla is intending to take a third lucky winner public with Alpha Healthcare Acquisition III, filing to go public Thursday with a $150 million raise penciled in. The move comes just a couple of weeks after Shukla’s second SPAC said it would jump to Nasdaq in tandem with Laura Niklason’s Humacyte in a $255 million new investment.

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Paul Hudson, Getty Images

How does Paul Hud­son's $13.5M comp pack­age stack up against oth­er CEOs? He's in the 'first quar­tile'

Paul Hudson arrived at Sanofi like a hurricane, chopping off duds in the pipeline, shaking up the C-suite, striking big M&A deals and jumping into the Covid-19 vaccine race — all in an attempt to reboot a pharma giant notorious for its setbacks.

Now, we’re getting a look at what the CEO brought home in his first year on the job.

When all is said and done, Hudson will have made about $6.7 million in 2020, about $2.5 million of which has already been paid. The bigger figure includes a $2.3 million bonus that’s subject to approval at an April meeting, and another $1.8 million in variable compensation that has yet to be paid.

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Thank you, next: Take­da hands Ovid $196M cash to rein back in Phase III-ready seizure drug, re­viv­ing bat­tered stock

Soticlestat made it.

Takeda is bringing the drug back into its fold more than four years after first entrusting the team at Ovid with the mid-stage clinical work. For all that — generating what they saw as positive Phase II data in Dravet syndrome and Lennox-Gastaut syndrome — the biotech has been rewarded with $196 million in upfront cash, with another $660 million reserved for regulatory and commercial milestones.

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