Eli Lilly nears $2B-plus deal for Kelonia to expand cancer pipeline: WSJ

[Indianapolis - April 2016: Eli Lilly and Company V]
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Eli Lilly (LLY [https://seekingalpha.com/symbol/LLY]) is in advanced negotiations to acquire Kelonia Therapeutics in a transaction valued at more than $2 billion, The Wall Street Journal reported Sunday, citing people familiar with the discussions.

The agreement could be announced as soon as Monday if talks are completed successfully, the sources said. The final structure may also include milestone-based payments tied to Kelonia’s future progress.

Kelonia, a privately held biotechnology company, is developing a next-generation treatment for multiple myeloma, a form of blood cancer. An acquisition would strengthen Lilly’s presence in the fast-growing hematology segment of the global oncology market, estimated at roughly $240 billion.

According to PitchBook data, Kelonia has raised just under $60 million and was last publicly valued at slightly above $100 million in April 2022.

The company is focused on advancing a new type of CAR-T therapy, which uses genetic engineering to help a patient’s immune system recognize and destroy cancer cells.

Kelonia Chief Executive Kevin Friedman said earlier this year that the company believes its platform could significantly reshape the treatment landscape.

Traditional CAR-T therapies often require chemotherapy before treatment begins, followed by the collection of a patient’s immune cells. Those cells are then modified in a lab and infused back into the patient to target the disease.

Kelonia aims to simplify that process by eliminating the need for chemotherapy and the customized manufacturing steps typically associated with CAR-T treatments.

Its lead multiple myeloma program remains in the early stages of development. In January, the company said the U.S. Food and Drug Administration cleared the therapy to begin Phase 1 safety testing in as many as 40 participants.

Cancer medicines remain a major business for Lilly, generating $9.4 billion of the company’s $65.2 billion in revenue last year. Its existing blood-cancer portfolio includes Jaypirca.

A successful Kelonia acquisition would broaden Lilly’s oncology pipeline and help diversify growth beyond its blockbuster obesity and diabetes franchises.

Lilly has accelerated dealmaking as cash flow from weight-loss products surges. Last month, the company agreed to acquire Centessa Pharmaceuticals in a deal worth about $6.3 billion upfront to expand its neuroscience and sleep medicine capabilities.

Earlier this year, Lilly also struck a deal worth up to $2.4 billion for genetic medicine company Orna Therapeutics. In January, it said it would pay roughly $1.2 billion for Ventyx Biosciences and its pipeline of immune and neurodegenerative disease treatments.

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