Eli Lilly exercises rights to type 2 diabetes drug under deal with Transition Therapeutics

The assumption of rights to TT-401, a dual agonist of the Glucagon-Like Peptide-1 and glucagon receptors, by Eli Lilly triggers a $7m milestone payment to Transition.

As per the amended agreement between the companies, Lilly is responsible for costs, future development and commercialization activities of TT-401 while $14m will paid by Transition in three separate installments during the Phase 2 study.

Upon the commercialization of the product, Transition will earn $240m in additional milestone payments in addition to sales-based royalties.

Lilly endocrine and cardiovascular research and clinical investigation vice president David Moller said, "We are encouraged by the early data seen to date with TT-401, and are pleased by the efficient and thorough process by which Transition Therapeutics conducted the Phase 1 studies."

Transition chairman and chief executive officer Dr. Tony Cruz said, "Our additional financial contribution secures a greater vested interest for Transition, and we welcome the opportunity to invest in this drug candidate that has shown encouraging data in the recently announced human proof-of-concept study."