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May 14, 2018

Lilly Continues Oncology Expansion with Plans to Buy AurKa Pharma for Up to $575M

  • Eli Lilly said today it plans to acquire AurKa Pharma for up to $575 million—the buyer’s second acquisition of a cancer drug developer in less than a week, as the pharma giant aims to expand its oncology pipeline.

    AurKa was created two years ago to develop AK-01, an Aurora kinase A inhibitor that was originally discovered at Lilly. Aurora A is one of three Aurora kinases that are required for genome stability and are frequently overexpressed in cancerous tumors—making them a potentially attractive cancer-fighting target, Lilly reasons.

    AK-01 is a potential first-in-class compound that AurKa is studying in the Phase I/II “Study of AK-01 in Solid Tumors” (NCT03092934). The two-part study consists of a Phase I dose escalation study in participants with locally advanced or metastatic solid tumors, and a Phase II portion in up to three cohorts with either small-cell lung cancer, breast cancer, and/or one other solid tumor type.

    According to Lilly, earlier Phase I studies have shown AK-01 to be highly selective for Aurora A, with potential clinical benefit observed. Future studies will seek to determine if the selectivity profile of AK-01 can improve efficacy while limiting toxicity risks to a manageable level.

    “The acquisition of AurKa Pharma expands our pipeline with a promising oncology compound targeting a distinct cell cycle pathway,” Levi Garraway, M.D., Ph.D., SVP, global development and medical affairs, Lilly Oncology, said in a statement. “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.”

    AurKa was launched when Lilly sold AK-01 in 2016 to TVM Capital Life Sciences, which established AurKa as part of its TVM Life Sciences Ventures VII Fund. The fund’s “cornerstone” investors included Lilly when the fund raised $201.6 million at its final closing two years earlier.

  • Commitment to Cancer R&D

    Lilly’s selloff of AK-01 followed a review of pipeline priorities during the tenure of Lilly's then-CEO John C. Lechleiter, Ph.D., who has since retired.

    Dr. Lechleiter’s successor, David A. Ricks, last year committed Lilly to overhauling its oncology pipeline—a commitment reinforced when Lilly announced on April 30 the appointment of Leena Gandhi, M.D., Ph.D., to lead Lilly Oncology’s immuno-oncology development efforts, effective June 25. Dr. Ghandi is now director of thoracic medical oncology and an associate professor of medicine at New York University (NYU) School of Medicine.

    Ricks has also led Lilly in a series of initiatives to build its cancer pipeline—including an up-to-$1.795 billion-plus collaboration with CureVac launched last year and a partnership with Cancer Research UK on a Phase I trial for the cell division cycle 7 kinase inhibitor LY3143921 hydrate.

    “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,” added Darren Carroll, J.D., SVP of corporate business development at Lilly. “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.”

    AurKa is the second oncology drug developer acquired by Lilly in the past five days. On May 10, Lilly disclosed plans to acquire Armo BioSciences for approximately $1.6 billion, in a deal that would add to the buyer’s pipeline AM0010 (pegilodecakin), a long-acting form of recombinant human interleukin-10 (IL-10) linked to polyethylene glycol (PEG). AM0010 is a Phase III pancreatic cancer candidate that is also being developed to treat other solid tumors.

    Lilly agreed to acquire all shares of AurKa. In return, AurKa shareholders will receive $110 million upfront and are eligible for up to $465 million in payments tied to achieving milestones that include AK-01 gaining approval in the U.S. and elsewhere, as well as achieve prespecified sales levels.

    Lilly said the deal is subject to customary closing conditions and will not result in any change in its 2018 non-GAAP earnings per share (EPS) guidance. Lilly raised its 2018 guidance to investors on April 24 after reporting what it termed strong first-quarter results, increasing its non-GAAP EPS forecast range to between $5.10 to $5.20 per share, from $4.81 to $4.91.

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