Deciphera Pharmaceuticals — a Lawrence start-up company that recently signed a multimillion-dollar deal with drug giant Eli Lilly — is the company a local development group has been working to lure to downtown Lawrence.

Tim Fritzel, a leader of the group that owns office space in the 600 block of Massachusetts Street, confirmed that he has a deal with Deciphera to occupy about 6,000 square feet of office space along Massachusetts Street.

But he said he’s still working to sign the company to a deal to locate its laboratory operations in downtown as well.

“We think this could be real good news for the community because this is the type of company we want to have in Lawrence,” Fritzel said.

The company already has moved its administrative offices into the second-floor space formerly occupied by Cardinal Brands at 643 Mass.

And Fritzel’s group recently won City Commission approval to convert former office space at 647 Mass. into laboratory space.

Fritzel said talks are ongoing for the company to move its laboratory operations into that second-floor space, which is above Starbucks and other retailers.

Deciphera has about 10 employees in downtown, Fritzel said. Several more could be added if the laboratory operations move to downtown, he said.

Attempts to reach Dan Flynn, Deciphera president and CEO, were not immediately successful Tuesday.

Deciphera in late 2008 signed an 18-month lease for 7,700 square feet of laboratory space owned by Kansas University at Bob Billings Parkway and Wakarusa Drive, near its operations at 4950 Research Park Way.

But Deciphera is expected to have growing space needs after signing a deal in October to collaborate on research with Eli Lilly and Co. The deal could potentially provide Deciphera with up to $130 million in capital, if certain benchmarks are met.

The company, which was started in 2003, has been a prime target for economic development leaders in the area. When it became clear the company would grow out of its west Lawrence space, the city and Lawrence Chamber of Commerce worked to complete a deal to move the firm into East Hills Business Park. After that deal fell apart, concern grew that the company would move to the Kansas City area or elsewhere.

Recently there’s been speculation that the former Farmland Industries site east of Lawrence could be converted into a life sciences business park, but efforts by the city to purchase that property through the federal bankruptcy court have been slowed.

It wasn’t immediately clear whether the downtown space would meet the company’s long-term needs, but Fritzel said it was important for the community to come up with options for Deciphera to remain in Lawrence.

“This deal will keep more bodies in downtown, but the big thing with this is that it keeps the company in town,” Fritzel said.

— City reporter Chad Lawhorn also has a Town Talk blog.