Amylin to Pay Lilly $250M to End Exenatide Partnership and Litigation

Lilly will transition diabetes drug to Amylin for global development and commercialization.

Lilly and Amylin inked a deal with $250 million up front that will formally end their exenatide alliance and the outstanding legal wrangle that was instigated by Amylin back in May. Amylin’s claimed that Lilly was in breach of its exenatide responsibilities and acting anticompetitively by using the same sales force to market both exenatide and Boehringer Ingelheim’s competing diabetes drug, linagliptin.

Termination of the firms’ decade-long exenatide partnership will see full responsibility for worldwide development and commercialization of exenatide passed to Amylin. Transition of the U.S. commercial operations from Lilly will be completed by the end of the month, and the firm will then transfer responsibility for commercializing the two exenatide drugs Byetta® and Bydureon® back to Amylin on a market-by-market basis in 2012 and 2013. The firm says it expects to work with one or more partners outside the U.S. to maximize the commercial potential of exenatide products.

Financially, the deal will involve Amylin making a $250 million up front payment to Lilly and future revenue-sharing payments equaling 15% of global net sales of exenatide products, up to $1.2 billion. If the EC-approved, once-weekly Bydureon formulation of exenatide doesn’t receive FDA approval before June 30, 2014, Amylin’s revenue-sharing obligations will be terminated, and the firm will instead pay Lilly 8% of global net sales of exenatide products. Amylin may also have to pay Lilly another $150 million milestone on FDA approval of a once-monthly suspension formulation of exenatide that is currently in Phase II development.

The GLP-1 receptor agonist Byetta was first launched in 2005, and the once-weekly formulation, Bydureon, was approved in the EU in June and is currently under review in the U.S. following a resubmission to FDA. A PDUFA data has been set for January 2012.

Amylin reported net U.S. Byetta sales of $128.1 million in the third quarter of 2011 (ending September 30), compared with $132.4 million in the equivalent period in 2010. Net U.S. sales of the drug in the nine months ending September 30, 2011, were $385.1 million compared with $422.9 million in 2010.

Until now Lilly has received a 50% share of Byetta’s gross margin in the U.S. but has held on to 100% of Byetta and Bydureon sales outside the U.S. The firm reported total exenatide revenue of $106.7 million during the third quarter of 2011, up 4% on the same 2010 period. Worldwide exenatide sales were $171.0 million in the third quarter of 2011 (up 1%). The firm says that while U.S. sales of Byetta were down 4% (as reported by Amylin), primarily due to competitive pressures,  sales of Byetta and Bydureon outside the U.S. increased 18% to $42.9 million.