Eli Lilly Enters Into Collaboration With Incyte

Eli Lilly and Incyte have entered into an exclusive worldwide license and collaboration agreement for the development and commercialisation of Incyte’s oral JAK1/JAK2 inhibitor, INCB28050, and certain follow on compounds, for inflammatory and autoimmune diseases.

The lead compound, INCB28050, is currently being studied in a six-month dose-ranging phase II trial for rheumatoid arthritis.

As per the terms of the agreement, Lilly is expected to receive worldwide rights to develop and commercialise INCB28050 as an oral treatment for all inflammatory conditions.

Additionally, Incyte will receive an initial payment of $90m and is eligible for up to $665m in additional potential development, regulatory, and commercialisation milestones, as well as tiered, double-digit royalty payments on future global sales with rates ranging up to 20%, if a product is successfully commercialised.

Furthermore, Incyte will retain the option to co-develop its JAK1/JAK2 inhibitors with Lilly on a compound-by-compound and indication-by-indication basis beginning at the initiation of phase IIb development.

Under the agreement, if Incyte elects to co-develop any compounds and/or indications, it would be responsible for funding 30% of the associated future global development costs from the initiation of a phase IIb trial.

Reportedly, Incyte would receive an incremental royalty rate increase across all tiers resulting in effective royalty rates ranging up to the high twenties on potential future global sales for compounds and/or indications that Incyte elects to co-develop.

Incyte expects that the earliest it would consider exercising a co-development option would be in the second half of 2010, concurrent with the potential initiation of a phase IIb trial with INCB28050. Development of the JAK1/JAK2 inhibitors will be governed by a joint development committee. Incyte also has the option to co-promote products in the US.

Paul Friedman, president and CEO of Incyte, said: “Lilly’s success in bringing novel therapies to market, their commitment to building a franchise in inflammation and autoimmunity, and their enthusiasm regarding the potential of JAK inhibition gives us confidence that the full therapeutic and commercial potential of INCB28050 in RA as well as other autoimmune and inflammatory conditions can be rapidly and effectively achieved through this agreement.

“This collaboration leverages the capabilities and strengths of each partner and achieves our objective to retain significant value for Incyte’s shareholders.”