Eli Lilly $LLY has agreed to acquire Ajax Therapeutics, a biopharmaceutical company developing treatments for blood cancers, for up to $2.3 billion in cash, the companies said April 27.

Under the terms of the agreement, Lilly said the consideration is structured in two parts: an initial payment at closing, followed by contingent payments that would be triggered by hitting specified clinical and regulatory targets. The transaction is subject to customary closing conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act.

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Myelofibrosis — a rare bone marrow disease in which fibrosis progressively impairs the body's ability to produce healthy blood cells — is the target indication for Ajax's lead compound, AJ1-11095, an investigational oral therapy taken once daily that is currently being evaluated in a Phase 1 study, according to Reuters. The trial, called AJX-101, is evaluating the drug in patients who have previously been treated with an existing class of therapies. Dose selection for future clinical development is expected in 2026, with first proof-of-concept data to be presented later that year.

AJ1-11095 works differently from existing approved treatments. All approved JAK2 inhibitors for myelofibrosis and polycythemia vera bind the so-called Type I configuration of JAK2, Lilly said. AJ1-11095 is designed as a selective Type II JAK2 inhibitor, intended to deliver deeper and more durable efficacy and to offer a treatment option for patients who become resistant to existing therapies.

"As a founding strategic investor in Ajax, Lilly has long believed in the approach and is excited about the potential for AJ1-11095 to deliver deeper and more durable efficacy than available treatments with a tolerability profile that would allow for patients to remain on therapy longer," said Jacob Van Naarden, executive vice president and president of Lilly Oncology and head of corporate business development, in a statement.

Martin Vogelbaum, co-founder and CEO of Ajax Therapeutics, said in a statement that the company was founded to build on the work of five scientific founders, including Ross Levine, MD, chief scientific officer at Memorial Sloan Kettering Cancer Center. "We now look forward to Lilly advancing AJ1-11095 through the clinic and providing a much-needed new therapy for patients with MPNs," Vogelbaum said.

The Ajax acquisition adds to a pattern of oncology dealmaking at Lilly. Earlier this month, the company agreed to acquire Kelonia Therapeutics, a developer of in vivo CAR-T cell therapies for multiple myeloma, for up to $7 billion — a deal that itself followed a $2.4 billion agreement to buy Orna Therapeutics announced in February.

Ropes & Gray is acting as legal counsel to Lilly. Cooley and Kirkland & Ellis are advising Ajax.

Eli Lilly is acquiring blood cancer drug developer Ajax Therapeutics for up to $2.3 billion

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