Amylin diabetes drug exenatide deal with Eli Lilly terminated, with $1.45 billion settlement to Lilly

Shares of US biotech firm Amylin Pharmaceuticals fell 8.4% to $10.01 in pre-market trading yesterday, when it was revealed it had agreed to terminate its decade long alliance with drug major Eli Lilly (NYSE: LLY) for the exenatide-based diabetes drugs Byetta and the extended-release version Bydureon, and resolve the outstanding litigation between the companies.

Earlier this year, San Diego -based Amylin filed a law suit against Lilly in the US District Court for the Southern District of California, alleging that Lilly is engaging in anticompetitive activity and breaching its strategic alliance agreements with Amylin to maximize commercialization of exenatide (The Pharma Letter May 17). Notably, Amylin viewed Lilly’s deal with Germany’s Boehringer Ingelheim for the diabetes drug Tradjenta (linagliptin) as improper and anticompetitive.

As part of the agreement announced yesterday, the parties will transition full responsibility for the worldwide development and commercialization of exenatide to Amylin, starting in the USA on November 30, 2011, and progressing to all markets by the end of 2013.