On a Roll: Eli Lilly to Buy Aurka that Could Hit $575M

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Only days after Eli Lilly and Company agreed to pay $1.6 billion for ARMO BioSciences, the Indianapolis-based drug company is acquiring AurKa Pharma, an oncology company.

AurKa Pharma was founded by TVM Capital Life Science to develop AK-01, an Aurora kinase A inhibitor originally discovered at Lilly. It is currently in Phase I clinical trials in multiple forms of solid tumors.

Under the terms of the deal, Lilly is paying AurKa $110 million upfront with up to $465 million in various regulatory and sales milestones.

Aurora kinases are linked to cellular division by controlling chromosomal segregation. When there are problems in chromosomal segregation, this can cause genetic instability, which is associated with tumor development. There are three Aurora kinases, A, B and C, all which play a role in regulating mitosis. AK-01 is highly selective for Aurora A.

“The acquisition of AurKa Pharma supports Lilly’s external innovation strategy, in which we seek to partner with leading life science venture capital firms in order to identify, support and access promising innovation in areas of unmet medical need,” said Darren Carroll, Lilly’s senior vice president of corporate business development, in a statement. “We are excited with the value TVM created for this compound through its early-phase studies, and we look forward to more opportunities in the future.”

These two deals reflect Lilly’s strong interest in oncology. ARMO BioSciences, headquartered in Redwood City, California, is an immuno-oncology company. One of its lead compound is pegilodecakin, which is currently in clinical trials as a monotherapy and in combination with traditional chemotherapy. One of those trials is in pancreatic cancer. Others are evaluating the drug in melanoma, lung, and renal cell cancers.

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

In acquiring AurKa Pharma, Lilly is buying all shares of the company. AurKa Pharma shareholders will receive $110 million as an upfront payment. The deal will be reflected in Lilly’s reported financial results and guidance, but there will be no change to its 2018 non-GAAP earnings per share guidance as a result of this deal.

“Through the unique healthcare venture capital model pioneered by TVM Capital Life Science, companies such as AurKa have been established to more quickly and efficiently bring promising compounds to clinical proof-of-concept,” said Luc Marengere, managing partner at TVM Capital Life Science, in a statement. “We are pleased that the scientific advances made by AurKa could contribute to the development of AK-01 and hopefully help deliver a potential new medicine for cancer patients.”

TVM Capital Life Science is a group of independent investment advisories and fund managers for Venture Capital funds. Their teams are based in Munich, Germany and Montreal, Canada. Since its inception in 1984, it has invested in more than 140 life science companies in Europe, Canada and the U.S.

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