Lilly (LLY.US) intends to spend over $2 billion to acquire Kelonia, further expanding its presence in the blood cancer market.

Lilly (LLY.US) is reportedly in advanced negotiations to acquire privately held biotechnology company Kelonia Therapeutics, with the deal valued at over $2 billion. Sources familiar with the matter indicate that if the negotiations proceed smoothly, the agreement could be announced as early as Monday. The final deal structure may also include milestone payments linked to Kelonia's future research and development progress. Kelonia is said to be developing a next-generation therapy for the treatment of multiple myeloma, a type of blood cancer. The company is focused on advancing a novel CAR-T therapy, which uses genetic engineering to help the patient's immune system identify and destroy cancer cells. Kelonia's CEO Kevin Friedman previously stated earlier this year that the company believes its platform has the potential to significantly reshape the treatment landscape. Traditional CAR-T therapies typically require chemotherapy before treatment initiation, followed by the collection of the patient's immune cells. These cells are then engineered in the lab and re-infused back into the patient's body to target the disease. Kelonia aims to streamline this process by eliminating the need for chemotherapy and the personalized manufacturing steps typically associated with CAR-T therapy. Its core project for multiple myeloma is still in the early stages of development. In January of this year, the company announced that the Food and Drug Administration (FDA) had approved a phase I safety trial for the therapy, which could enroll up to 40 participants. Kelonia has reportedly raised just under $60 million in funding, with its most recent public valuation in April 2022 slightly exceeding $100 million. If the acquisition proceeds, it will strengthen Lilly's presence in the rapidly growing blood cancer segment of the global oncology market, estimated at approximately $240 billion. Cancer drugs remain a crucial segment for Lilly, contributing $9.4 billion to its total revenue of $65.2 billion last year. Its existing blood cancer product portfolio includes Jaypirca. Acquiring Kelonia will expand Lilly's oncology treatment product pipeline and help diversify its sources of growth beyond its flagship weight loss and diabetes businesses. With the rapid cash flow growth from weight loss medications, Lilly has accelerated its acquisition pace. Last month, the company agreed to acquire Centessa Pharmaceuticals (CNTA.US) for a upfront payment of about $6.3 billion to expand its neuroscience and sleep medicine capabilities. Earlier this year, Lilly also reached a deal with gene therapy company Orna Therapeutics valued at up to $2.4 billion. In January, the company also announced plans to pay about $1.2 billion to acquire Ventyx Biosciences and its pipeline for immune diseases and neurodegenerative disorders.