Jan 13 (Reuters) - Eli Lilly ( LLY ) said on Monday it

would buy cancer therapy developer Scorpion Therapeutics for up

to $2.5 billion in cash.

Lilly 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.

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

hold its employees and non-PI3K pipeline assets. The new,

independent company will be owned by Scorpion's current

shareholders, with Lilly holding a minority equity interest.