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news.Amylin Pharmaceuticals, a biopharmaceutical company, and Eli Lilly and Company have signed a product supply agreement for exenatide once weekly, a development compound that, if approved, would become the first once weekly therapy to treat Type 2 diabetes.
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Under terms of the agreement, Lilly will make an initial cash payment of $125 million to Amylin, and Amylin will supply product for sales in the US and to Lilly for sales outside of the US.
In addition to the $125 million upfront payment, Lilly will reimburse Amylin for its share of the more than $500 million capital investment in the West Chester, Ohio facility through the cost of goods sold for exenatide once weekly.
As part of the overall supply arrangement, Lilly will make available to Amylin a $165 million line of credit that Amylin can draw upon beginning in the fourth quarter of 2009 through the second quarter of 2011. Any debt from the credit facility will be due three years from the date that the full amount has been drawn or the second quarter of 2014, whichever occurs first.
John Lechleiter, president and CEO of Lilly, said: “Amylin and Lilly continue to strengthen our exenatide alliance, building on the success of Byetta, our first-in-class medicine that has been used by approximately one million patients worldwide. With this agreement, we acknowledge Amylin’s commitment in making this important investment to build critical manufacturing capacity.”