Eli Lilly's buy of Loxo means immediate revenue stream, notes analyst

9 January 2019

Following the announcement of Eli Lilly’s (NYSE: LLY) acquisition of Loxo Oncology (Nasdaq: LOXO), which marks the second multibillion-dollar deal in 2019,Volkan Gunduz, senior oncology and hematology analyst at analytics firm GlobalData, offers his views on the deal.

“Eli Lilly’s choice of Loxo is highly strategic due to Loxo’s unique oncology portfolio as well as its potential for quick return of investment. To this end, Lilly will immediately collect sales revenues from Loxo’s recently branded first-in-class tropomyosin receptor kinase (TRK) inhibitor Vitrakvi (larotrectinib),” he stated.

Other analysts have forecast the drug will bring in blockbuster sales of $1 billion or more, but Vitrakvi is subject of a licensing deal with Germany’s Bayer (BAYN: DE), which shared 50 % of commercialization costs for the drug and is entitled to 50% of profits.

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