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Oct 18, 2007

Lilly and MacroGenics Ink Billion-Dollar Deal

  • Eli Lilly and MacroGenics are partnering to further anti-CD3 mAbs including MacroGenics lead candidate, teplizumab, for the treatment of diabetes. Lilly will acquire the exclusive rights to this drug for $44 million with the potential to pay $1.05 billion in milestone fees. Lilly may also make an equity investment of up to $10 million in the company’s next private financing round or initial public offering.

    Teplizumab is currently being studied in a global, pivotal Phase II/III trial for individuals with recent-onset type 1 diabetes. MacroGenics will continue to oversee this study.

    Under the terms of the agreement, MacroGenics will receive an initial payment of $41 million and $3 million in other committed funds. The company may also receive up to $200 million in development milestones for the type 1 diabetes indication. If teplizumab is successfully commercialized, Lilly could pay up to $250 million in sales milestones and would receive escalating royalties.

    Lilly may also decide to pursue several additional autoimmune-related indications for teplizumab or other next-generation anti-CD3 molecules developed with MacroGenics. If Lilly pursues each one of those indications, and they all ultimately gain approval, additional milestone payments to MacroGenics could exceed $600 million. MacroGenics holds the option to copromote teplizumab for certain indications in the U.S.

    The transaction should become effective in the fourth quarter of 2007. At closing, Lilly expects a charge to earnings for acquired in-process R&D. The amount of the charge has not yet been determined, but is estimated to be $0.03 per share, according to the company.

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Scientifically Studying Ecstasy

MDMA (commonly known as the empathogen “ecstasy”) is classified as a Schedule 1 drug, which is reserved for compounds with no accepted medical use and a high abuse potential. Two researchers from Stanford, however, call for a rigorous scientific exploration of MDMA's effects to identify precisely how the drug works, the data from which could be used to develop therapeutic compounds.

Do you agree that ecstasy should be studied for its potential therapeutic benefits?

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