Eli Lilly puts $1.3B in biobucks on the line for Foghorn's oncology programs

Eli Lilly is throwing more cash at its $8 billion bet on Loxo Oncology, this time via a $380 million confidence boost in Foghorn Therapeutics to go after multiple cancers. 

The Indianapolis Big Pharma is dishing out $300 million in upfront cash, an $80 million equity investment and up to $1.3 billion in biobucks for Foghorn's BRM-selective program, another undisclosed cancer target and three discovery programs.

That's a full three-course meal and a deal that's six times the size of one entered into by Lilly's Loxo in January for three therapies from Dutch biotech Merus.

Foghorn's shares skyrocketed nearly 52% to $18.15 apiece as of 9:30 a.m. ET.

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This time around, Lilly thinks it can tackle a large swath of cancers through Foghorn's targeting of brahma-related gene-1, or BRG1, mutations. BRG1 mutations are thought to account for about 5% of all tumors and up to 10% of non-small cell lung cancer ones. That Foghorn program is looking to hit BRG1 mutations via protein degradation and by inhibiting enzymes. 

Foghorn will handle discovery and early research and will then extend the baton to Lilly to lead development and commercialization through a licensing agreement for the BRM-selective program and the undisclosed target. The biotech and the Big Pharma will split the U.S. economics, with Foghorn able to receive royalties on ex-U.S. sales.

For the three discovery programs, Foghorn can receive up to $1.3 billion in development and commercialization milestones. The two parties inked the deal Friday, according to Securities and Exchange Commission filings.

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"Oncogenic mutations in BRG1 impact a large population of cancer patients and we believe are best addressed therapeutically with a highly selective BRM inhibitor, though designing such a drug is a difficult chemistry challenge," said Jacob Van Naarden, Lilly Oncology president and Loxo CEO, in a statement