With the acquisition, Lilly expects to strengthen its immuno-oncology program by adding Armo's lead product candidate pegilodecakin.
Armo said pegilodecakin is a long-acting PEGylated form of recombinant human Interleukin-10 (IL-10) which delivers an anti-cancer effect by stimulating the survival, expansion and killing potential of CD8+ T cells.
Lilly Oncology global development and medical affairs senior vice president Levi Garraway said: "As we develop our immuno-oncology portfolio, Lilly will pursue medicines that use the body's immune system in new ways to treat cancer.
"We believe that pegilodecakin has a unique immunologic mechanism of action that could eventually allow physicians to offer new hope for many cancer patients."
Pegilodecakin has so far shown clinical benefit as a single therapy, and also in combination with chemotherapy and checkpoint inhibitor therapy, for various tumor types, said Lilly.
Currently, the drug is being evaluated in a phase 3 clinical trial in pancreatic cancer and also in earlier-phase trials in lung and renal cell cancer, melanoma and other solid tumor types.
In addition to pegilodecakin, Armo also boasts of other immuno-oncology product candidates, which are in various stages of pre-clinical development.
Armo BioSciences president and CEO Peter Van Vlasselaer said: "Armo is proud of the work we have done to advance the study of immunotherapies and of the development of pegilodecakin to-date.
"Given the resources that Lilly, a leader in oncology R&D, can bring to bear to maximize the value of pegilodecakin and the rest of the Armo pipeline, we believe it is in the best interest of Armo, our stockholders and the patients we serve, to execute this transaction."
The transaction, which will see Lilly offer $50 per share in cash for Armo’s shareholders, is anticipated to be completed by the end of the second quarter of 2018. The closing of the deal will be subject to customary closing conditions such as receipt of necessary regulatory approvals.
Image: Eli Lilly and Company's global headquarters, in Indianapolis, Indiana. Photo: courtesy of Guanaco152003/Wikipedia.org.