Amylin Gets $125M from Eli Lilly To Make Once-Weekly Diabetes Drug
Amylin Pharmaceuticals said today it has scored a $125 million cash payment from Eli Lilly to manufacture a once-weekly injectable version of exenatide for diabetes. The San Diego-based biotech company will also get a $165 million line of credit from Lilly, which it can draw upon starting in the fourth quarter of 2009 through the second quarter of 2011, Amylin said.
Amylin (NASDAQ: AMLN) and Eli Lilly have long been partners on the original exenatide, a twice-daily injection marketed as Byetta. It’s Amylin’s main cash cow, generating $180 million in sales in the quarter ending September 30, Amylin said today in a statement. Now the companies are betting big that a once-weekly injection will be able to pass muster with the FDA, and ultimately be even more of a hit with patients. The companies have together invested more than $500 million in a West Chester, OH, factory to keep up with the anticipated demand. Under the deal, Amylin will supply the drug for the U.S. market, and provide it to Lilly for sales outside the U.S.
The supply agreement between the two companies comes at a time when they have been under scrutiny over cases of pancreatitis that have been reported in patients taking the currently marketed version of exenatide, including two deaths. It hasn’t crushed product sales, though; in fact, net sales grew 14 percent in the third quarter, Amylin said. Amylin had about $805 million in cash and investments at the end of September, and the new infusion from Lilly will be added on top of that.
“This agreement strengthens our balance sheet and provides us with financial flexibility in the future, while moving us closer to our goal of bringing exenatide once weekly to patients as quickly as possible,” said Amylin CEO Daniel Bradbury, in a statement.