Foghorn Therapeutics Stock Surges After $1.5B Cancer Pact With Eli Lilly

Loxo Oncology, an R&D group of Eli Lilly And Co LLY, and Foghorn Therapeutics Inc FHTX have collaborated to create oncology medicines by applying Foghorn's Gene Traffic Control platform. 

• The collaboration includes a co-development and co-commercialization agreement for Foghorn's selective BRM oncology program and an additional undisclosed oncology target. 
• In addition, the collaboration includes three additional discovery programs using Foghorn's Gene Traffic Control platform.
• Under the agreement terms, Foghorn will receive upfront consideration of $300 million in cash and an equity investment by Lilly of $80 million at $20 per share.
• For the BRM-selective program and the additional undisclosed target program, Foghorn will lead discovery and early research activities. 
• Lilly will conduct development and commercialization activities with participation from Foghorn in operational activities and cost-sharing. 
• Foghorn and Lilly will share 50/50 in the U.S. economics, and Foghorn is eligible to receive royalties on ex-U.S. sales.
• Foghorn will lead discovery and early research activities for the additional discovery programs, and it may receive up to a total of $1.3 billion in potential development and commercialization milestones. 
• Price Action: FHTX shares are up 37.6% at $16.50, LLY stock is up 0.35% at $245.00 during the premarket session on the last check Monday.