Lilly receives exclusive rights to commercialize Acrux's testosterone solution

Eli Lilly and Company (NYSE: LLY) and Acrux (ASX: ACR) announced today that they have entered into an exclusive worldwide license agreement for the potential commercialization of Acrux's experimental underarm testosterone solution (proposed tradename AXIRON™). The new drug application for AXIRON is currently under regulatory review by the U.S. Food and Drug Administration (FDA) for the treatment of testosterone deficiency (hypogonadism) in men.

Under the terms of the agreement, Lilly will receive exclusive worldwide rights to commercialize AXIRON. In exchange for these rights, Acrux will receive an upfront payment of $50 million plus $3 million on the transfer of manufacturing assets. Acrux is further eligible for $87 million upon the issuance of marketing authorization by the FDA, and up to $195 million in potential commercialization milestones, as well as royalty payments on future global sales if AXIRON is successfully commercialized. (All financial terms are denominated in U.S. dollars) As a result of this transaction, Lilly expects to incur a charge to earnings in the first quarter of 2010 of approximately $.03 per share.

"The addition of AXIRON reinforces Lilly's commitment to men's health and, if approved, could provide a new treatment option for men suffering from low testosterone," said Bryce Carmine, president of Lilly's Bio-Medicines. "Lilly hopes to leverage our experience in men's health to advance both the science and clinical outcomes for men with low testosterone.  Some of the needs of patients in approaching therapy include the need for a convenient way to administer therapy over a small and discreet area of the body. AXIRON has the potential to be the first testosterone solution to be applied via an underarm applicator, for patients who have testosterone deficiency. We look forward to working with Acrux and the FDA during the regulatory review process."

"We are delighted to build on our established relationship with Lilly and collaborate on the potential worldwide commercialization of AXIRON," said Dr Richard Treagus, chief executive officer of Acrux. "Through Lilly's considerable global resources and leadership position in the field of men's health, Acrux now has the opportunity to achieve the full commercial potential of AXIRON."