M&A

Eli Lilly’s oncology R&D spree continues with $576M deal to buy a startup and reel back Aurora A drug

Eli Lilly’s oncology deal spree is continuing this morning with a $576 million deal to buy out a Montreal-based startup and reel back in an early-stage cancer drug for its pipeline.

Levi Garraway

Lilly, which has been beefing up its cancer R&D group in anticipation of a burst of new projects in the field, is paying $111 million up front to buy Montreal-based AurKa Pharma with another $465 million in milestones on the table.

The deal comes just four days after Lilly $LLY announced it had acquired Armo BioSciences $ARMO for $1.6 billion in cash. Armo is one of the darlings in immuno-oncology which has a strategy involving cytokine immuno-stimulatory therapies, like Loxo.

In this new deal, Lilly wants to retrieve an Aurora kinase A inhibitor dubbed AK-01 that’s been demonstrating some early-stage promise in Phase I studies. TVM (AurKa’s parent company) bagged the drug back in 2016, when Lilly was shedding assets that didn’t fit its priority list.

The big idea here is that the Aurora A kinase — a master regulator of mitotic progression — is needed for genomic stability and disrupting it can play a role in preventing tumor progression along a couple of different pathways. As such it now fits Lilly’s sweet spot and the cancer team wants it back in their pipeline.

Lilly’s oncology group has been hiring in top talent in anticipation of gearing up in cancer drug development. The pharma giant has scored some significant approvals in recent years, but has a rep in the industry as a laggard that tends to come in last place among more aggressive rivals.

The new leadership at Lilly says they plan to correct past behaviors in a late bid to catch up with the leaders in oncology R&D. And they’ve laid out plans for do 4 or 5 of these early-stage deals every year — steering clear of big M&A.

“The acquisition of AurKa Pharma expands our pipeline with a promising oncology compound targeting a distinct cell cycle pathway,” says Levi Garraway, senior vice president, global development and medical affairs, Lilly Oncology. “The work done by AurKa will allow Lilly to leverage emerging data about cancers in which this molecule might be effective, and determine if it can be beneficial to people living with various forms of cancer.”


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