Eli Lilly Agrees to Buy Cancer-Drug Company for $1.6 Billion (1)

Eli Lilly & Co. agreed to acquire ARMO BioSciences Inc. for about $1.6 billion in cash, in a deal that would add some promising cancer therapies to the pharmaceutical giant’s pipeline.

Under the terms of the proposed transaction, Lilly will commence a tender offer to buy all shares of ARMO for $50 a share, according to a news release announcing the deal, a 68 percent premium relative to the $29.80 that the Redwood City, California-based company’s stock closed at in New York trading on Wednesday.

ARMO is developing a number of cancer treatments that harness the body’s immune system to ...