ARMO BioSciences (NASDAQ: ARMO) is a late-stage immuno-oncology company that develops a pipeline of novel, proprietary product candidates designed to activate the immune system of cancer patients to recognize and eradicate tumors. On a trailing 12-month basis, it generated a net loss of $42.4 million.

Eli Lilly and Company (NYSE: LLY) overlooked the loss as it eyed the real prize–the addition of pegilodecakin, a PEGylated IL-10, which has demonstrated clinical benefits as a single agent, and in combination with both chemotherapy and checkpoint inhibitor therapy, across several tumor types. Pegilodecakin is currently being studied in a Phase 3 clinical trial in pancreatic cancer, and earlier-phase trials in lung and renal cell cancer, melanoma and other solid tumor types.

ARMO has a number of other immuno-oncology product candidates in various stages of pre-clinical development. There will be no change to Lilly’s 2018 non-GAAP earnings per share guidance as a result of this transaction.

Lilly will pay $50 per share, or approximately $1.6 billion in cash. The share price represents a 67% premium over ARMO’s closing price on May 9, 2018.

This marks Lilly’s second announced transaction in 2018. In April, it entered into a global privately held Sigilon Therapeutics to develop encapsulated cell therapies for the potential treatment of Type 1 diabetes. Sigilon granted Lilly the exclusive worldwide license to its Afibromer technology for islet cell encapsulation.

Lilly paid $63 million upfront, and agreed to pay up to $410 million in milestones, plus royalties, if the research works out.