Transition Therapeutics and Lilly Expand Diabetes Partnership through Licensing of the Latter’s Preclinical Candidates

Eli Lilly will earn $1 million up front as part of a licensing deal for a series of its preclinical diabetes compounds with Transition Therapeutics.The agreement gives Transition exclusive, worldwide rights to develop and commercialize the compounds.

Lilly retains an option to reacquire rights to the compounds up to the end of Phase II trials. If exercised, Transition would then be eligible for milestone payments of about $250 million plus royalties on future sales. Conversely, if Lilly doesn’t take up its option to reacquire the products, it would be eligible for low single-digit royalties on future sales of relevant commercialized products.

The new deal expands the companies’ existing diabetes collaboration, signed in March 2008, which gave Lilly exclusive, worldwide rights to develop and commercialize Transition's gastrin-based therapies including lead gastrin analogue TT-223. The product has completed Phase II trials in type 2 diabetes patients and is currently undergoing Phase II evaluation in combination with an EGF analogue as a treatment for type 1 and 2 diabetes. TT-223 is also in Phase I trials in combination with metformin for the treatment of type 2 diabetes and in Phase I testing combined with a GLP-1 analogue as a potential therapy for type 1 and 2 disease.

In January Transition reported data from the Phase II trial with TT-223 in type 2 diabetes patients. Results from the randomized, double-blind, placebo-controlled, dose-ranging study showed that patients who received the highest daily dose of TT-223 for 12 weeks experienced a statistically significant reduction in HbA1c of 1.13% six months after completing TT-223. Patients who had received placebo treatment experienced a 0.22% HbA1c reduction six months post-treatment.