The USA-based company bases its approach on two scientific trends: the increasing use of genetic testing in cancer clinical medicine and improving chemistry approaches to building highly selective inhibitors against single targets in the cancer cell.

In November 2017, Loxo announced that it had entered into a deal with German pharma major Bayer (BAYN: DE) that could earn it as much as $1.55 billion. The agreement is for the development and commercialization of larotrectinib (LOXO-101) and LOXO-195. Both compounds are being investigated in global studies for the treatment of patients with cancers harboring tropomyosin receptor kinase (TRK) gene fusions, which are genetic alterations across a wide range of tumors resulting in uncontrolled TRK signaling and tumor growth.