Eli Lilly and Company (LLY) and Adocia announced that they have entered into a worldwide licensing agreement for the development of an ultra-rapid insulin, BioChaperone Lispro, for the treatment of patients suffering from type I and type II diabetes.
The ultra-rapid insulin, developed using Adocia's proprietary BioChaperone technology, is currently in phase Ib studies. BioChaperone Lispro is being developed for optimizing glucose levels during and after meals with increased flexibility in the timing of insulin injections.
Terms of the Deal
According to the agreement, Eli Lilly will develop, manufacture and commercialize BioChaperone Lispro. Adocia is entitled to a total upfront payment of $50 million, sales milestones up to $240 million along with tiered sales royalties and potential payments of up to $280 million upon the achievement of certain development and regulatory milestones. Adocia will also receive reimbursements from Eli Lilly pertaining to research and development expenses incurred during the terms of the agreement. The maximum total up-front and milestone payment that can be disbursed under this agreement is $570 million.
Additionally, the collaboration includes an agreement to develop a concentrated formulation of BioChaperone Lispro. However, Adocia retains the right to develop and license its insulin programs, which are not related to prandial ultra-rapid insulin.
We note that the market for diabetes products is highly crowded with Novo Nordisk (NVO) being a leading player in the global insulin market. Some approved drugs for diabetes are Novo Nordisk’s NovoRapid, recently approved Eli Lilly’s Trulicity (type II diabetes) along with diet and exercise, and MannKind’s (MNKD) Afrezza in combination with a long-acting insulin (type I diabetes).
Eli Lilly carries a Zacks Rank #3 (Hold). A better-ranked stock in the biotech sector is Biogen Idec Inc. (BIIB), carrying a Zacks Rank #1 (Strong Buy).
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