While New Yorkers have their famed duo of bagels and lox, Eli Lilly is making its own combo with its $8B purchase of Loxo Oncology. The cancer-focused biopharma just recently had its first US approval in Vitrakvi, which can target multiple cancers by focusing on tumor biomarkers instead of the affected tissue area. The deal cements Eli Lilly’s presence in the oncology space, but follows the trend noted in a recent report by EY that says drugmakers have been spending too much on stock buybacks and bolt-on acquisitions instead of megamergers like Takeda/Shire and BMS/Celgene. Loxo stockholders should be pretty happy with the deal—when Loxo shares went public in 2014 they cost $13, and Eli Lilly will be purchasing them for $235 a pop.
Bristol-Myers Squibb has started off the 2019 season of M&A with a huge proposal: buying the biotech Celgene in a $74B deal. If completed, it would be the largest pharma acquisition to date, blowing the previous-record holder—Takeda’s pending Shire acquisition for $62B—out of the water. Both companies are oncology giants, specifically in immunology and blood cancers, but BMS will be acquiring a decent amount of risk with the purchase. Celgene’s market cap has gone down $70B in the past 14 months partly due to poor financial forecasts for when the company’s top drug Revlimid loses patent protection. BMS likely hopes to make that up with six possible product launches in the next few years. Okay, enough numbers. To round out this New Jersey-focused blurb, here’s some New Jersey would-you-rathers.
The FDA has approved the “chemo combo” of Merck & Co.’s Keytruda with Eli Lilly’s Alimta for treatment for patients with non-squamos non-small cell lung cancer who have not been previously treated. That’s great news for the patients, but not the best news for Bristol-Myers Squibb and AstraZeneca who have their own combo and are attempting to get it approved. The announcement brings “the first true endorsement of the general ‘chemo combo’ approach,” according to Bernstein analyst Tim Anderson. Anderson says it is “not yet clear” how BMS and AZ’s product will perform. What is clear? Merck is trying to pull far, far away from the competition.
Cancer…the c-word is cancer. Grail, a Silicon Valley startup, is developing a blood test similar to a liquid biopsy that works proactively to spot cancer. According to Business Insider, the goal is to “identify the tiny bits of cancer DNA that are hanging out in our blood but are now undetectable.” A test like that will take time, massive clinical trials and, of course, money. Lucky for them, Grail just raised more than $900M in funding from big names like Johnson & Johnson Innovation, Bristol-Myers Squibb, Celgene, McKesson Ventures, Merck, Tencent Holdings Limited, Varian Medical Systems, and even Amazon. Who knows, maybe Prime members can get test results delivered to their front door in less than two business days.