Eli Lilly & Co. will buy the immuno-oncology biotech ARMO Biosciences Inc. for about $1.6 billion in an all-cash deal, the company announced early Thursday. ARMO Biosciences shares surged 77.6% in premarket trade after the news, while Eli Lilly shares were inactive. ARMO’s lead product candidate, pegilodecakin, is in a late-stage clinical trial for pancreatic cancer and in earlier trials for lung and renal cell cancer, melanoma and other solid tumors. Eli Lilly said the therapy will bolster its immuno-oncology program. The company also has two products that haven’t yet entered clinical trials in humans, and another product that is pre-clinical. The deal values the company at $50 per share, and is expected to close by the end of the second quarter; shares closed at $29.82 on Wednesday. The deal is not expected to change Eli Lilly’s 2018 adjusted earnings-per-share guidance. ARMO shares have dropped 22% over the last three months and Eli Lilly shares have risen 4%, compared with a 3% rise in the S&P 500 and a 1.5% rise in the Dow Jones Industrial Average .