Lilly and Alkermes link up on inhaled insulin

Eli Lilly and Alkermes have entered into an agreement to develop apulmonary formulation of insulin for the treatment of diabetes that will utilize Alkermes' AIR drug delivery system. The two companies are already developing an inhaled version of human growth hormone (Marketletter February 14, 2000). Financial arrangements were not disclosed, although analysts have suggested that the deal could be worth up to $100 million to the drug delivery firm.

Under the terms of their agreement, Alkermes will get funding for product development, milestone payments and royalties on product sales. In exchange, Lilly gains exclusive global rights to products resulting from the collaboration, and will be responsible for conducting clinical trials, securing regulatory approvals and overseeing manufacturing and marketing.

J P Morgan analyst Franklin Berger told CBS MarketWatch that the partners are likely developing both short- and long-acting forms of insulin, while Robert Hazlett of Robertson Stephens noted that the agreement also covers other potential products for the treatment of diabetes; he believes one of these will be the peptide GLP-1, an insulin production stimulator "with significant therapeutic potential."