Eli Lilly to buy Ajax Therapeutics for up to US$2.3 billion in blood cancer bet

A sign for Eli Lilly & Co. sits outside their corporate headquarters in Indianapolis. (AP Photo/Darron Cummings, File)

Eli Lilly said on Monday it would buy privately held cancer drug developer Ajax Therapeutics for up to US$2.3 billion in cash, as the U.S. drugmaker looks to expand its oncology pipeline.

Lilly has been doubling down on its search for next-generation cancer treatments with its recent dealmaking spree, acquiring companies such as Scorpion Therapeutics, Orna Therapeutics and Kelonia Therapeutics.

Ajax’s lead asset, AJ1-11095, is an experimental once-daily oral treatment that is in early-stage testing for previously treated patients with myelofibrosis - a rare, chronic blood cancer where scar tissue builds up in the bone marrow, disrupting normal blood cell production.

Jacob Van Naarden, president of Lilly Oncology, said the company looks forward to using its expertise in blood cancer to “hopefully deliver another important new medicine to patients and hematologists.”

Scotiabank analyst Louise Chen said the deal “builds on Lilly’s established capabilities in blood cancers and helps expand its future commercial products beyond obesity.”

Ajax’s drug works by blocking JAK2, a signaling protein that helps drive several blood cancers. According to the company, the drug is designed to attach to JAK2 in a different way from currently available medicines, which could help it work better or for longer in patients who stop responding to older treatments.

The company is also developing it for related diseases including polycythemia vera, a disorder in which the body makes too many red blood cells.

Lilly said the total deal value includes an upfront payment and subsequent payments upon the achievement of certain clinical and regulatory milestones.

(Reporting by Christy Santhosh in Bengaluru; Editing by Devika Syamnath and Maju Samuel)