Eli Lilly to buy oncology drug developer. What is it paying up to $7 billion for?

US pharmaceutical giant Eli Lilly has agreed to buy biotech company Kelonia Therapeutics in a deal worth up to $7 billion, according to a press release. Lilly will pay $3.25 billion outright, with the remainder of the amount contingent on the achievement of clinical, regulatory and commercial milestones. The deal is expected to close in the second half of the year.

Kelonia is developing a technology to reprogram a patient's T-cells right in the body so they can attack cancer, CNBC writes. It is called in vivo CAR-T therapy. In existing methods, this is done outside the body (ex vivo): cells are extracted, modified in the laboratory and then returned to the patient. Despite the complexity of the process, this approach has been successful in treating blood cancers such as multiple myeloma, the channel notes. However, due to barriers related to safety and accessibility, only a fraction of patients can receive the treatment. Kelonia's development could make it faster and more accessible, eliminating the need for chemotherapy, Barron's explains.

"It's an intravenous therapy that is administered once. It targets the body's T-cells, turns them into a tool to attack the cancer and doesn't require the body to be prepped beforehand," Jacob Van Naarden, head of oncology at Lilly, told CNBC.

Shares of Eli Lilly at trading on April 20 initially went down by 0.3%, but then turned around and at the time of publication of this text added about 0.1%. Since the beginning of the year, the pharma giant's capitalization has decreased by 14%.

The acquisition of Kelonia will allow Eli Lilly to strengthen its position in the lucrative blood cancer treatment segment of the roughly $240 billion global anticancer market, notes The Wall Street Journal. Despite the popularity of Lilly's best-selling drugs for obesity and diabetes, anti-cancer therapies remain an important area for the company: last year, they accounted for $9.4 billion of total revenue of $65.2 billion.

If Kelonia's technology proves successful, it will allow Lilly to expand its lineup for blood disorders, which already includes drugs such as Jaypirca, WSJ reports. The company will also be able to strengthen its position in the segment of next-generation oncology drugs, reducing its dependence on the business of popular injections and diabetes pills.

"We intend to become a prominent player in hematology. It is important to have another drug that can be offered to physicians and is suitable for widespread use, rather than being limited to specialized medical centers that can deliver personalized cell therapy outside the body," CNBC quoted Jacob Van Naarden as saying.

This article was AI-translated and verified by a human editor