Bayer, Loxo Partner Up For $1.5B Cancer Drug Development

Bayer and Loxo Oncology have announced plans to work together to develop and commercialize two cancer therapies in a deal that potentially brings Loxo up to $1.55 billion over the coming few years. The drugs, larotrectinib and LOXO-195, a follow-on compound, are both TRK inhibitors, which target acquired genetic defects directly in cancer patients.

Loxo will receive $400 million upfront from Bayer, the two companies will then split development costs and U.S. profits equally. Loxo will then be able to receive $450 million and $200 million for milestones once the treatments are approved and sold.

Larotrectinib was found to be a safe drug based on data from earlier this year and puts the treatment in a position as a breakthrough in the field of precision medicine.

Loxo will lead development and file for the drugs US approvals, which it expects to apply for later this year or early next year. Bayer will lead efforts outside of the U.S.