Loxo Oncology, a cancer drug specialist, has been acquired by El Lilly, a pharmaceuticals giant, for a deal that was valued at $8 billion (£6.27 billion). The acquisition marks the second multibillion-dollar drug merger in the United States of America since the start of the new year.
This afternoon, El Lilly disclosed that it has acquired Loxo as it aims to bolster its treatment portfolio. It is considered a sign of the fast-growing market for cancer drugs.
Today’s purchase marks the biggest takeover ever of Lilly. According to a joint statement that was issued by the companies, It implies that the shareholders of Loxo will receive $235 per share in cash.
The deal comes just several days after New York-based Bristol-Myers Squibb was able to close one of the largest pharma deals in history after acquiring Celgene for approximately $74 billion. The merged company is set to have nine products with more than $1 billion in annual sales.
These kinds of mergers have sparked expectations for another seismic year of healthcare acquisitions and mergers. It comes weeks after GlaxosmithKleine, a constituent of the FTSE 100, also revealed its plans to acquire Tesaro, an oncology-focused US company, for the sum of $5.1 billion.
For several years, El Lilly has been ramping up its focus around oncology. Alimta, its cancer treatment, is becoming one of its top-selling products.
In May 2018, the drugmaker also revealed its plans to acquire Armo Biosciences for $1.6 billion as part of its cancer drug portfolio ambitions.
Today’s deal is anticipated to close by the end of the first quarter this year.
Deutsche Bank serves as the financial adviser of Lilly while Weil, Gotshal & Manges LLP serves as its legal adviser. On the other hand, Goldman Sachs & Co LLC serves as the financial adviser of Loxo, while Fenwick & West LLP serves as the legal adviser of the company.