Lilly to Acquire ARMO BioSciences for $1.6 Billion

On May 10, 2018, Eli Lilly announced an agreement to acquire ARMO BioSciences for $50 per share, or approximately $1.6 billion, in an all-cash transaction. ARMO is a late-stage immuno-oncology company based in Redwood City, CA, that is developing a pipeline of proprietary product candidates designed to activate the immune system of cancer patients to recognize and eradicate tumors.

Under the terms of the agreement, Lilly will commence a tender offer to acquire all shares of ARMO BioSciences for a purchase price of $50 per share in cash, or approximately $1.6 billion. The transaction is expected to close by the end of the second quarter of 2018, subject to customary closing conditions, including receipt of required regulatory approvals and the tender of a majority of the outstanding shares of ARMO's common stock. After the closing of the tender offer, Lilly will acquire any shares of ARMO that are not tendered into the tender offer through a second-step merger at the tender offer price. 

According to Lilly, the acquisition will strengthen its immuno-oncology program through the addition of ARMO's lead product candidate, pegilodecakin, a PEGylated interleukin (IL)-10 that has demonstrated clinical benefit as a single agent and in combination with both chemotherapy and checkpoint inhibitor therapy across several tumor types. Pegilodecakin is currently in a Phase III clinical trial in pancreatic cancer, as well as earlier-phase trials in lung and renal cell cancer, melanoma, and other solid tumor types. ARMO also has a number of other immuno-oncology product candidates in various stages of pre-clinical development.

"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, MD, PhD, senior vice president, global development and medical affairs, Lilly Oncology, in a company press release. "We believe that pegilodecakin has a unique immunologic mechanism of action that could eventually allow physicians to offer new hope for many cancer patients."

Source: Eli Lilly