Eli Lilly will acquire worldwide rights from KeyBioscience to develop and commercialize its pipeline of dual amylin calcitonin receptor agonists (DACRAs) for type 2 diabetes and other metabolic disorders, the companies said today.

The companies have agreed to collaborate on developing new treatments based on KeyBioscience’s DACRA platform. That pipeline includes KBP-042—now in Phase II development—as well as KBP-089, KBP-056, and other candidates in phases ranging from preclinical to Phase I.

The companies reason that the dual activation of calcitonin and amylin receptors can successfully improve insulin sensitivity, suppress food intake, reduce fat deposition, improve blood glucose levels, and cause weight reduction.

“Our strategic collaboration with KeyBioscience AG will open the door to a potentially innovative treatment approach for people with type 2 diabetes and, possibly, other metabolic conditions,” Enrique Conterno, president, Lilly Diabetes and Lilly USA, said in a statement.

Added Morten Karsdal, Ph.D., KeyBioscience chairman of the board: “The dual activation of the calcitonin and amylin receptors is exciting research in the diabetes space. We look forward to partnering with Lilly to advance this important work.”

Lilly agreed to pay KeyBioscience an initial $55 million, plus additional undisclosed payments tied to achieving development, regulatory, and commercialization milestones, as well as tiered royalties on future sales.

The deal is subject to clearance under the Hart–Scott–Rodino Antitrust Improvements Act and other customary closing conditions.

Lilly expects to incur an acquired in-process research and development charge against 2017 earnings of approximately $0.03 per share. The company’s reported earnings per share guidance in 2017 is expected to be reduced by the amount of the charge, Lilly said.

In reporting first quarter results on April 25, Lilly lowered its reported EPS guidance to between $2.60 and $2.70, down from its original 2017 guidance of between $2.69 and $2.79, “due to severance costs incurred as a result of actions taken to reduce the company's cost structure.”

There will be no change to the company's non-GAAP earnings per share guidance, Lilly added. That range was set at $4.05 to $4.15 when the company reported fourth quarter results on January 31 and was not changed in April.

KeyBioscience is a fully owned subsidiary of Nordic Bioscience, a global drug development organization specializing in clinical research and innovative biomarker research focused on connective tissue diseases.

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