(Reuters) - U.S. drugmaker Eli Lilly and Co said on Thursday it will create a new cancer research division that will be run by top executives from Loxo Oncology, a cancer-focused biotech company it acquired earlier this year.
The move highlights Lilly’s efforts to double down on its cancer business following the $8 billion acquisition of Loxo in February.
The company has been focused on increasing sales in core franchises, including diabetes and oncology, as sales of older blockbuster medicines such as diabetes treatment Humalog and erectile dysfunction drug Cialis face pressure from generic competition.
The new unit, to be called Loxo Oncology at Lilly, will include experimental cancer drugs from both Lilly’s and Loxo’s developmental pipelines.
It will be led jointly by former Loxo Chief Executive Josh Bilenker, Jacob Van Naarden, who was chief business officer of the Stamford, Connecticut-based company, and Nisha Nanda, who was its chief development officer.
Indianapolis-based Lilly is also hiring David Hyman to be chief medical officer of the new unit. Hyman currently serves as chief of the early drug development service at Memorial Sloan Kettering Cancer Center in New York.
They will report to Daniel Skovronsky, Lilly’s chief scientific officer.
“We intend to create a balanced pipeline of medicines - whether internally or externally discovered - to help even more people with cancer around the world, and position Lilly as a premier oncology company,” Skovronsky said in a statement.
Chief Executive Officer David Ricks said in October that Lilly will be actively pursuing deals in the oncology space.
Lilly acquired a promising drug called selpercatinib with its Loxo purchase that it intends to submit for regulatory approval later this year, after the drug that treats cancers driven by a rare, specific genetic mutation produced positive lung cancer data.
It also has a number of other cancer drugs in the pipeline, some of which it has developed internally and others brought in from Loxo. As it sets up the new oncology unit, some of its development projects will be shut down, the company said.
Lilly reported lower-than-expected sales in the third quarter, as the company paid high rebates to insurers on top-selling diabetes drug Trulicity.
In October, Lilly received U.S. approval for migraine drug Reyvow.
(The story refiles to remove extraneous word from headline)
Reporting by Carl O'Donnell; Editing by Bill Berkrot