Lilly assumes development rights to potential type 2 diabetes drug

Eli Lilly and Company has exercised its option to assume all development and commercialization rights to type 2 diabetes drug candidate, TT-401, from Canada's Transition Therapeutics, who will receive a US $7 million milestone payment.

The original 2010 agreement between Lilly and Transition has been amended, with Lilly now assuming all costs and perform all future development and commercialization activities. However, Transition will contribute $14 million to Lilly in three separate installments during the phase 2 clinical trials. If TT-401 is successfully commercialized, Transition is eligible to receive around $240 million in additional milestone payments.

"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. We look forward to continuing the development of TT-401, as it supports our strategy of offering a broad portfolio of therapies for people with diabetes."

David Moller, vice president of endocrine and cardiovascular research and clinical investigation for Lilly.

Approximately 347 million people worldwide have diabetes, with type 2 diabetes accounting for 90% of the cases, according to the World Health Organisation.