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UPDATE: Lilly to acquire Loxo Oncology in $8B deal

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UPDATE: Lilly to acquire Loxo Oncology in $8B deal

Eli Lilly and Co. is acquiring cancer specialist Loxo Oncology Inc. for about $8 billion, or $235 per share.

Lilly's takeover of Loxo Oncology comes less than a week after Bristol-Myers Squibb Co. announced that it is acquiring Celgene Corp. for $74 billion.

Under the deal's terms, Lilly will begin a tender offer to acquire all of Loxo's outstanding shares at $235 apiece. After closing of the tender offer, Lilly will purchase any Loxo shares that are not tendered through a second-step merger at the same price.

A Loxo shareholder owning a 6.6% stake has agreed to tender its shares in the offer.

Stamford, Conn.-based Loxo Oncology is a biopharmaceutical company developing targeted medicines focused on cancers that are uniquely dependent on single gene abnormalities that can be detected by genomic testing.

Loxo's pipeline includes LOXO-292, expected to be launched in 2020 as treatment to multiple tumor types such as certain lung and thyroid cancers; LOXO-305, which has the potential to treat blood cancers; and Vitrakvi, which recently received U.S. Food and Drug Administration approval to treat tumors with a specific type of genetic mutation irrespective of the organ affected by the disease.

The deal is expected to close by the end of the first quarter and will not be subject to any financing condition. The transaction still needs to meet closing conditions, including regulatory approvals and the tender of a majority of Loxo's outstanding common stock.

"Using tailored medicines to target key tumor dependencies offers an increasingly robust approach to cancer treatment," said Daniel Skovronsky, Lilly's chief scientific officer and president of Lilly Research Laboratories.

Indianapolis-based Eli Lilly said the anticipated impact of the acquisition will be included in the company's fourth-quarter 2018 financial results, to be announced Feb. 13, 2019.

Deutsche Bank serves as the exclusive financial adviser to Lilly in the deal, while Weil Gotshal & Manges LLP acts as legal adviser. Goldman Sachs & Co. LLC is the exclusive financial adviser and Fenwick & West LLP is the legal adviser of Loxo.