Loxo Oncology to develop, commercialize cancer drugs with Bayer

Elaine Thompson  AP

Elaine Thompson AP

Loxo Oncology will collaborate with Germany's Bayer to develop and commercialize two of its cancer therapies, the companies said, in a deal that could bring the USA drug developer up to $1.55 billion over the next few years.

LOXO-195 is in development to treat cancer patients who have developed resistance to initial TRK therapy such as larotrectinib.

Loxo will receive a $400 million upfront payment. The two companies will jointly develop the two products, equally sharing development costs. It is eligible for an additional $450 million in milestone payments for larotrectinib and a further $200 million in milestone payments for LOXO-195.

Loxo said it expects to apply for US marketing approval of larotrectinib later this year or early next year.

Loxo will lead development of the drugs and file for their US approvals, while Bayer will file for regulatory approvals and lead commercialization outside the United States.

Bayer and Loxo will co-promote the products in the USA, sharing commercial costs and profits on a 50/50 basis, while Bayer will pay Loxo a $25 million milestone payment when a certain U.S.net sales threshold is crossed.

"These agents have the potential to fullfil the promise of precision medicine, where tumor genetics rather than tumor site of origin define the treatment approach for patients", said Robert LaCaze, executive vice president and head of the oncology strategic business unit at Bayer.