The oncology compound was discovered originally through a Lilly research and development program.
AK-01 was sold by Lilly in 2016 to TVM Capital Life Science following a review of its clinical pipeline priorities. Almost two years later, Lilly will be acquiring the compound in a move to expand its oncology pipeline.
TVM Capital Life Science managing partner Luc Marengere said: "Through the unique healthcare venture capital model pioneered by TVM Capital Life Science, companies such as AurKa have been established to more quickly and efficiently bring promising compounds to clinical proof-of-concept.
"We are pleased that the scientific advances made by AurKa could contribute to the development of AK-01 and hopefully help deliver a potential new medicine for cancer patients."
AK-01 is believed to have the ability to treat some forms of solid tumors such as small cell lung cancer and treatment-resistant breast cancer. Currently, it is being assessed in phase 1 clinical trials across multiple types of solid tumors.
As per the terms of the deal, Lilly will pay an upfront payment of $110m to AurKa Pharma shareholders. The Canadian firm will also be eligible to get payments of up to $465m in the form of regulatory and sales milestones, provided the drug gets approved in the US and other markets, and register certain sales levels.
Lilly Oncology global development and medical affairs senior vice president Levi Garraway said: "Lilly Oncology is focused on the development of innovative cancer therapies that can make a meaningful difference for patients.
"The acquisition of AurKa Pharma expands our pipeline with a promising oncology compound targeting a distinct cell cycle pathway. The work done by AurKa will allow Lilly to leverage emerging data about cancers in which this molecule might be effective, and determine if it can be beneficial to people living with various forms of cancer."
Lilly’s proposal to buy AurKa Pharma follows its recent deal to acquire US-based late-stage immuno-oncology company Armo BioSciences for about $1.6bn.
Image: Eli Lilly and Company's global headquarters, in Indianapolis, Indiana. Photo: courtesy of Guanaco152003/Wikipedia.org.