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Bayer Obtains Full Rights to Vitrakvi From Lilly's Loxo

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Bayer AG (BAYRY - Free Report) announced that it has exercised a right to gain exclusive licensing rights for the global development and commercialization of the TRK inhibitors — Vitrakvi (larotrectinib) and BAY 2731954 (LOXO-195). Bayer has exercised this right under a change-in-control clause in the collaboration agreement with Loxo Oncology. Both Vitrakvi and BAY 2731954 are being developed globally for the treatment of adult and pediatric patients with advanced solid tumors harboring neurotrophic receptor tyrosine kinase (NTRK) gene fusions.

Shares of Bayer have declined 36% in the past year against the industry’s growth of 9.2%.

We remind investors that Bayer and Loxo Oncology entered into a global collaboration for the joint development and commercialization of larotrectinib and BAY 2731954. Following the change of control, Bayer will be solely responsible for the global development and commercialization of both larotrectinib and BAY 2731954. The sharing of U.S. commercial costs and profits in equal parts will now be replaced by royalties to be paid by Bayer.

Larotrectinib was approved in November 2018 in the United States under the brand name Vitrakvi for the treatment of adult and pediatric patients with solid tumors with a NTRK gene fusion without a known acquired resistance mutation that are either metastatic or where surgical resection will likely result in severe morbidity, and have no satisfactory alternative treatments or have progressed following treatment. 

BAY 2731954 is an oral candidate, which is in development for the treatment of patients with cancers that have acquired resistance to initial TRK therapy.

Bayer aims to strengthen its leadership in the field of cancer care, and has two very promising compounds in its precision oncology portfolio.

We further remind investors that Eli Lilly and Company (LLY - Free Report) announced a definitive agreement to acquire Loxo Oncology for $8 billion and the deal closed on Feb 15.

Zacks Rank and Stocks to Consider

Bayer currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks are GlaxoSmithKline (GSK - Free Report) and Bristol-Myers Squibb (BMY - Free Report) . While GlaxoSmithKline sports a Zacks Rank #1 (Strong Buy), Bristol-Myers carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GlaxoSmithKline’s earnings per share estimates have increased from $2.86 to $2.95 for 2019 and from $2.93 to $3.05 for 2020 in the past 60 days. The company delivered a positive earnings surprise in two of the trailing four quarters, with average of 3.74%.

Bristol-Myers’ earnings per share estimates have increased from $4.07 to $4.16 for 2019 in the past 60 days. The company delivered a positive earnings surprise in all the trailing four quarters, with average of 14.26%.

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