ARMO Armo Biosciences, Inc. (delisted)

By Austen Hufford 

Eli Lilly and Co. is buying ARMO BioSciences Inc. for $1.6 billion, the latest investment in the hot area of immunotherapy cancer treatments.

Immunotherapy, or immune-cell therapy, describes a range of treatments that harness a patient's own immune system to target cancer. The approach doesn't work in all patients, but has worked well against hard-to-treat cancers in some and has become the most closely watched area in cancer pharmaceuticals.

Lilly said Thursday it reached a deal to buy ARMO, which had an initial public offering in January, for $50 a share in cash, a 68% premium to its closing price Wednesday. ARMO's IPO priced at $17 a share.

ARMO shares rose 67% to $49.85 in premarket trading Thursday.

The company's leading drug candidate, called pegilodecakin, is designed to stimulate the survival, expansion and tumor-killing ability of a particular type of white blood cell in the body's immune system. The drug is currently being used in a late-stage clinical trial for treating patients with a type of pancreatic cancer. ARMO expects to evaluate progress of the study again in 2020 and the results could set the stage for an application to the U.S. Food and Drug Administration.

Lilly said it would continue to pursue drugs that use the body's immune system to treat cancers. In August, Gilead Sciences Inc. bought Kite Pharma Inc. for about $11.2 billion in a immunotherapy cancer bet.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

May 10, 2018 09:01 ET (13:01 GMT)

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