Point Biopharma spikes after Eli Lilly agrees to buy cancer-drug firm for $1.4 bn

Investing.com -- Point Biopharma (NASDAQ:PNT) shares surged by more than 80% in early U.S. trading on Tuesday after Eli Lilly&Co (NYSE:LLY) said it had agreed to buy the cancer biotech for around $1.4 billion.

Under the terms of the deal, Lilly is offering $12.50 per Point Biopharma share held, representing a premium of roughly 87% compared to its latest close. Shares in the Indiana-based Lilly dipped following the announcement.

The move expands Lilly's oncology therapy portfolio into radioligand treatments, which deliver radiation to tumor cells at a closer range while sparing surrounding healthy tissue. Point's lead programs are in late-stage development, Lilly noted.

Lilly has seen its market value rise recently thanks to enthusiasm around the potential sales of its drugs for Alzeheimer's disease and weight loss, but the company has still been aiming to add more cancer-focused treatments. Oncology therapies present a possibly lucrative opportunity for pharmaceutical firms, with global sales of these drugs amounting to $200 billion last year, according to Bloomberg News.

"Over the past few years, we have seen how well-designed radiopharmaceuticals can demonstrate meaningful results for patients with cancer and rapidly integrate into standards of care, yet the field remains in the early days of the impact it may ultimately deliver," Jacob Van Naarden, President of Lilly's oncology unit, said in a statement.

Both Point and Lilly expect the deal to close by the end of the year.