Pharmaceutical major Eli Lilly Co. and Korea-based Hanmi Pharmaceutical Co. are collaborating to develop an autoimmune disease treatment, the companies informed in a statement this week.
As part of this alliance, the two pharmaceutical industry players will study whether this new treatment (HM71224) can effectively treat conditions such as lupus and rheumatoid arthritis. The agreement will give Lilly worldwide rights for this new molecule being developed. The rights, however, will not be applicable in Korea, China, Hong Kong and Taiwan.
The deal will see Hanmi initially receiving a payment to the tune of U$50 million. Besides this, the company stands to earn an additional US$640 million from Eli Lilly if the former is able to achieve certain pre-decided milestones. If the treatment is successfully commercialized, Hanmi will also be entitled to tiered royalty payments, which have not been specified but are believed to be in double-digits.
According to a senior VP at Eli Lilly, Thomas Bumol, there is a significant degree of unmet needs in patients suffering from autoimmune diseases. In many cases, the individual requirements of patients cannot be adequately addressed and treated with the available drugs.
On the other hand, according to preclinical studies that have been conducted thus far, HM71224 has exhibited encouraging results. A separate Phase I study that was conducted in Europe has also shown positive results, said Hanmi’s CEO, Gwan Sun Lee.
Like many other big pharmaceutical companies, Lilly is bracing for an imminent wave expirations of drug patents. Because this directly dents sales, Lilly is now focusing on broadening its business models and research capabilities. Earlier, in February 2015, the company signed two separate collaboration agreements with Bristol-Myers Squibb Co. and Merck Co. for immunotherapy drug trials.