Lilly to Acquire AurKa Pharma in Deal Worth Up to $575 million

On May 14, 2018, Eli Lilly announced an agreement to acquire AurKa Pharma, a company established by TVM Capital Life Science to develop an oncology compound, in a deal worth up to $575 million. AurKa Pharma is developing AK-01, an Aurora kinase A inhibitor that was originally discovered by Lilly. According to Lilly, the compound is a potential first-in-class asset that AurKa Pharma is studying in Phase I clinical trials in multiple types of solid tumors.

Under the terms of the agreement, Lilly will acquire all shares of AurKa. In return, AurKa shareholders will receive an upfront payment of $110 million and are also eligible to receive up to $465 million in regulatory and sales milestones should AK-01 gain approval in the United States and other markets and achieve certain sales levels. This transaction is subject to customary closing conditions. 

Aurora kinases, consisting of Aurora A, Aurora B, and Aurora C, are key mitotic regulators required for genome stability and are frequently overexpressed in cancerous tumors, according to the companies. AurKa's AK-01 has been shown to be highly selective for Aurora A, with potential clinical benefit observed in Phase I studies.

"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, senior vice president of corporate business development at Lilly, in a company press release. "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."

Lilly sold the compound to TVM Capital Life Science in 2016, which then established AurKa as part of the TVM Life Science Ventures VII fund. The fund is an investment model that seeks to develop early-stage pharmaceutical assets. 

"The acquisition of AurKa Pharma expands our pipeline with a promising oncology compound targeting a distinct cell cycle pathway,” said Levi Garraway, MD, PhD, senior vice president, global development and medical affairs, Lilly Oncology, in the release. “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."

Building up an oncology pipeline

Earlier in May 2018, Lilly also 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.

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.

Source: Eli Lilly