Bayer takes on full rights to Vitrakvi and BAY 2731954

German pharma and crop sciences major Bayer (BAYN: DE) has exercised its option, under a change-in-control clause in the collaboration agreement with Loxo Oncology, to obtain the exclusive licensing rights for the global development and commercialization, for Vitrakvi (larotrectinib) and BAY 2731954 (LOXO-195).

Both compounds are being developed globally for the treatment of adult and pediatric patients with advanced solid tumors harboring NTRK gene fusions. The option was triggered by the$8 billion acquisition of Loxo Oncology by Eli Lilly (NYSE: LLY), which became effective today. As a result of this exercise, the joint co-promotion agreement in the USA between Bayer and Loxo Oncology is being converted to full commercialization in the USA by Bayer. Vitrakvi gained US Drug Administration approval in November last years

Bayer’s original deal with Loxo was agreed in November 2017, ways before Lilly announced its intention of acquiring the company, and could have earned Loxo as much as $1.55 billion, of which $400 million was paid up front. Today’s news saw Bayer’s shares gain 4.1% to 68.24 euros by close of trading.