Eli Lilly enters supply agreement for exenatide

Eli Lilly and Amylin Pharmaceuticals have entered into a product supply agreement for exenatide once weekly – a development compound that would become the first once-weekly therapy to treat Type 2 diabetes if approved.

The former explains that, under the terms of the deal, it will provide the latter with an initial cash payment of $125 million (74.8 million pounds).

In turn, Amylin will supply product for sales in the US and to Lilly for sales outside the US.

As well as the upfront payment, Lilly will reimburse Amylin for its share the more than $500 million capital investment in the Ohio facility via the cost of goods sold for exenatide once weekly.

Commenting on the move, Dr John C Lechleiter, president and chief executive officer of Lilly, states the two firms continue to strengthen their exenatide alliance. He adds the agreement acknowledges Amylin’s commitment by making the “important investment” to build “critical” manufacturing capacity.

Daniel M Bradbury, president and chief executive officer of Amylin Pharmaceuticals, adds: “The state-of-the art manufacturing facility in Ohio is readying for full-scale commercial manufacturing of exenatide once weekly.

“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.”

Lilly’s board of directors recently declared a dividend of 47 cents for the fourth quarter of 2008.