Eli Lilly to buy Scorpion Therapeutics' cancer therapy for up to $2.5 billion

(Reuters) -Eli Lilly said on Monday it plans to buy Scorpion Therapeutics' experimental cancer therapy for up to $2.5 billion in cash to expand its pipeline of cancer treatments.

The company will acquire Scorpion's experimental oral therapy, STX-478, which is currently being tested in early-stage trials for breast cancer and other advanced solid tumors.

The therapy is a PI3K inhibitor, which selectively targets a type of protein called PI3K.

"We look forward to leveraging the great work of the Scorpion team to date, along with Lilly's deep expertise in breast cancer, to further advance STX-478 with speed and focus," said Jacob Van Naarden, president of Lilly Oncology.

The agreement includes an upfront payment and subsequent payments upon achieving certain regulatory and sales milestones.

As part of the deal, Scorpion will spin out a new entity to house its non-PI3K pipeline assets and employees. The new, independent company will be owned by Scorpion's current shareholders, with Lilly holding a minority equity interest.

(Reporting by Sneha S K; Editing by Shilpi Majumdar and Shounak Dasgupta)