Transition Licenses Lilly Diabetes Compounds

Transition Therapeutics has acquired the rights to a series of preclinical compounds from Eli Lilly and Co. in the area of diabetes. Transition will receive exclusive worldwide rights to develop and potentially commercialize a class of compounds that showed potential to provide glycemic control and other beneficial effects including weight loss.

Lilly will receive an upfront payment of $1 million and will retain the option to reacquire the rights to the compounds at a later date. Lilly retains this option up until the end of Phase II. If Lilly exercises these rights, Transition would be eligible to receive milestone payments of approximately $250 million and royalties as high as the low double-digits on sales of products containing such compounds should such products be successfully commercialized. If Lilly does not exercise these rights, Lilly would be eligible for low single-digit royalties from Transition on sales of products containing such compounds should such products be successfully commercialized.

David E. Moller, M.D., Lilly’s vice president of Endocrine and Cardiovascular Research, commented, “The Lilly ‘FIPNet’ strategy in R&D embraces the notion of shared-risk discovery and early development efforts that can lead to clinical testing of a broader array of molecules. This new partnership with Transition supports that strategy by allowing for clinical testing and development of a new class of agents for diabetes and related co-morbid conditions that was derived from Lilly’s ongoing diabetes and biotechnology efforts.”