(Reuters) – Eli Lilly and Co remains in the hunt for cancer drugs even after announcing an $ 8 billion purchase of Loxo Oncology this week, but it plans to remain on the sidelines when it comes to two of the hottest areas of drug development.
FILE PHOTO: Eli Lilly & Co CEO Dave Ricks poses for a picture at the J.P. Morgan Healthcare Conference in San Francisco, California, U.S., January 9, 2018. REUTERS/Caroline Humer/File Photo
Lilly Chief Executive Dave Ricks told Reuters that as the company looks for deals to enhance its pipeline of future treatments it will leave CAR-T therapies for cancer and gene therapy for rare diseases to others, for now.
“The data is amazing, but practically, it’s not reaching many people,” Ricks said of CAR-T therapy, which involves extracting disease-fighting T-cells from a patient, re-engineering them to better recognize and attack cancer, and reinfusing them into the body.
Lilly on Monday said it would buy Loxo, which specializes in targeted cancer therapies, in the largest acquisition in the Indianapolis-based drugmaker’s 143-year history.
Loxo’s drugs interfere with specific genetic mutations that drive tumor growth.
The move came on the heels of Bristol-Myers Squibb’s proposed $ 74 billion purchase of Celgene Corp, raising expectations for more large-scale deals in the industry this year.
Under Ricks, who took the helm two years ago, Lilly has grown bolder in its acquisition strategy, a departure from his predecessors who long said the company’s growth would be fueled by in-house research.
In November, Lilly bought Armo BioSciences for $ 1.6 billion with the aim of improving its standing in the red-hot field of immuno-oncology. Lilly recognizes it was “late to the game” in the fast-growing and lucrative field of new cancer drugs, Ricks said in an interview at the JPMorgan Healthcare Conference in San Francisco.
Rivals such as Merck & Co and Bristol-Myers dominate the market for immunotherapies that harness the body’s immune system to fight cancer. Roche and AstraZeneca have also devoted major resources to that field.
Lilly is also developing its own immunotherapies, but would consider future deals in that arena, Ricks said.
But the company is not looking to jump into the CAR-T field, which has attracted billions of dollars of investment by rivals.
Novartis AG and Gilead Sciences Inc in 2017 received U.S. approvals of the first CAR-T treatments for blood cancers, while Bristol-Myers would own an experimental pipeline of CAR-T therapies through its Celgene purchase.
CAR-Ts have led to remarkable improvements for some advanced cancer patients who had run out of other treatment options. But sales have been slow due to complexities of producing the highly individualized treatment and difficulty securing payment from U.S. government health programs with its price tag nearing $ 400,000 per person.
“We have said it’s not for us right now,” Ricks said, adding that Medicare reimbursement levels were leaving hospitals to foot much of the bill for CAR-T therapy.
Lilly is also wary of the emerging field of gene therapy, which aims to cure a variety of serious conditions by fixing the errant gene responsible.
Novartis made an $ 8.7 billion bet on gene therapy last year with its acquisition of AveXis.
“Almost everything I am aware of is single gene edit defects, which ultimately leads you to pretty ultra-rare conditions, which are not our area of interest,” Ricks said.
Lilly, founded in 1876, is bent on remaining independent in an industry with a history of mega-mergers. “I think scale probably destroys more value than it creates,” Ricks said. “What matters is really differentiation of assets.”
The company’s other focus areas are diabetes, neuroscience and immunology. In December, Lilly raised its 2019 financial forecast, citing higher demand for newer medicines including diabetes drug Trulicity and psoriasis drug Taltz.
“We don’t need new areas to grow,” Ricks said. “We think those are the areas of science that can deliver the biggest innovation.”
(This story was refiled to add dropped word ‘not’ in 11th paragraph)
Reporting By Deena Beasley; Editing by Bill Berkrot