Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) ("Amylin") and Eli Lilly and Company (NYSE: LLY) ("Lilly") today announced an agreement to terminate their alliance for exenatide and resolve the outstanding litigation between the companies. As part of the agreement, the parties will transition full responsibility for the worldwide development and commercialization of exenatide to Amylin, starting in the United States (U.S.) on November 30, 2011, and progressing to all markets by the end of 2013.
After nearly a decade-long partnership that achieved a number of important milestones on behalf of people living with diabetes, the companies determined it was in the best interest of all constituents to amicably terminate the collaboration. Both companies are committed to ensuring a seamless transition of global product responsibility to Amylin while maintaining continuity of patient care.
"As pioneers in the GLP-1 market, we are proud of the truly innovative diabetes products that our two companies have provided patients," said Daniel M. Bradbury, president and chief executive officer of Amylin Pharmaceuticals. "Amylin is excited to assume full responsibility for developing and commercializing exenatide. We anticipate working with one or more partners outside the U.S. in order to maximize the global potential of this innovative molecule and achieve greater operational flexibility and efficiency. This clarity of focus will provide us with an enhanced opportunity to increase shareholder value."
Under the terms of the new global agreement, Amylin will make a one-time, upfront payment to Lilly of $250 million. Amylin will also agree to make future revenue sharing payments to Lilly in an amount equal to 15 percent of global net sales of exenatide products until Amylin has made aggregate payments to Lilly of $1.2 billion plus accrued interest. Amylin will issue a secured note in the amount of $1.2 billion to Lilly under which any revenue sharing payments made to Lilly will reduce amounts outstanding under the note. If Amylin's investigational once weekly version of exenatide, BYDUREON™ (exenatide extended-release for injectable suspension), has not received U.S. Food and Drug Administration (FDA) approval prior to June 30, 2014, Amylin's revenue sharing obligations will terminate, and Amylin shall thereafter pay Lilly 8 percent of global net sales of exenatide products. Amylin will also pay a $150 million milestone to Lilly contingent upon FDA approval of a once monthly suspension version of exenatide that is currently in Phase 2. The companies have also agreed that the maturity date for the $165 million line of credit that Amylin drew from Lilly earlier in the year will be extended from the second quarter of 2014 to the second quarter of 2016.
"This marks an amicable end to a very productive 10-year collaboration that will continue to benefit many people worldwide. Lilly and Amylin are proud of the important accomplishments we achieved together," said Enrique Conterno, president of Lilly Diabetes. "Lilly remains confident that the resubmission package for BYDUREON has addressed the requirements outlined by the FDA and looks forward to Amylin achieving the alliance's long-held goal of making BYDUREON available to patients in the U.S. Looking forward, Lilly Diabetes remains committed to providing a comprehensive portfolio of diabetes treatment options for patients through our currently marketed products and robust clinical pipeline."
The transition of commercial operations to Amylin in the U.S. will be complete by November 30, 2011. Outside the U.S., Lilly will transfer responsibility for commercialization of BYETTA® (exenatide) injection and BYDUREON to Amylin on a market-by-market basis in 2012 and 2013. Amylin will work with Lilly on all plans for markets outside the U.S. during the transition period and will guarantee that Lilly does not experience losses on exenatide-related activities during that period, up to a total cap of $60 million.
The Amylin and Lilly alliance resulted in several innovations in the diabetes market. These innovations include the 2005 launch of the first-in-class GLP-1 receptor agonist, BYETTA, a treatment that has been used by 1.8 million patients worldwide, and submission of the first once-weekly GLP-1 receptor agonist, BYDUREON, an investigational medication for type 2 diabetes designed to deliver continuous therapeutic levels of exenatide in a single weekly dose. BYDUREON received marketing authorization in the European Union in June 2011 and is currently under review in the U.S., with a Prescription Drug User Fee Action (PDUFA) date of January 28, 2012. Amylin will continue to evolve the GLP-1 market with the exenatide franchise through the development of a pen device for BYDUREON and the exenatide monthly suspension program.
Amylin Pharmaceuticals, Inc.; Eli Lilly and Company