Eli Lilly and Boehringer Ingelheim announced Tuesday an agreement to jointly develop and market four experimental diabetes compounds that are in mid- and late-stage development, as well as an option to include a fifth compound. Eli Lilly CEO John Lechleiter noted that the deal "will comprise one of the most robust diabetes pipelines in the pharmaceutical industry," adding that for the drugmaker it will offer "the prospect of near-term revenue opportunities as we address the upcoming loss of patent exclusivity for several of our products."
The agreement covers Boehringer Ingelheim’s oral DPP-4 inhibitor linagliptin, which is being developed for the treatment of type 2 diabetes, and is currently under regulatory review in the US, Europe and Japan, as well as the company's late-stage SGLT-2 inhibitor BI10773. Under the agreed terms, Eli Lilly will make a one-time payment of 300 million euros ($389 million) to Boehringer Ingelheim, which will also be eligible to receive up to 625 million euros ($811 million) in milestones payments for its two drugs.
The alliance also includes Eli Lilly’s basal insulin analogues, LY2605541 and LY2963016, which are expected to enter Phase III testing this year. Eli Lilly will be eligible to receive up to $650 million in milestone payments for the two insulin analogues, the companies noted. In addition, the US drugmaker could receive a further $525 million should Boehringer Ingelheim exercise its options on an anti-TGF-beta monoclonal antibody, which is currently in mid-stage development for patients with diabetes with chronic kidney disease. The parties said they will share ongoing development costs equally, as well as any commercialisation costs, for all products.
Eli Lilly indicated that its earnings in 2011 will be reduced by $0.45 to $0.50 per share due to the transaction. The drugmaker suggested that the deal could slightly add to earnings in 2014, although it anticipates a more significant contribution in 2015 and onwards.
Last year, Eli Lilly experienced a number of setbacks in its diabetes pipeline, including a decision to halt development of an agent that was being developed with Transition Therapeutics for type 2 diabetes, and news that a drug created with MacroGenics for the treatment of type 1 diabetes failed to meet the primary endpoint of a late-stage trial. Furthermore, in October, US regulators requested additional clinical data on a regulatory filing for Bydureon (extended-release exenatide) for the treatment of patients with type 2 diabetes. The compound is being developed with Amylin and Alkermes.
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