Lilly to pay up to $500 million for AstraZeneca Alzheimer's candidate

Anglo-Swedish pharma major AstraZeneca (LSE: AZN) and US peer Eli Lilly (NYSE: LLY) have entered an agreement to jointly develop and commercialize AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor currently in development as a potential treatment for Alzheimer’s disease.

AZD3293 is an oral, potent and selective small molecule inhibitor of BACE that has been shown in Phase I studies to significantly and dose-dependently reduce levels of amyloid beta in the cerebro-spinal fluid of Alzheimer’s patients and healthy volunteers. AstraZeneca announced earlier in 2014 its plan to move AZD3293 into registration trials.

Under the terms of the deal, Lilly will pay AstraZeneca up to $500 million in development and regulatory milestone payments. AstraZeneca expects to receive the first milestone payment of $50 million in the first half of 2015. The companies will share all future costs equally for the development and commercialization of AZD3293, as well as net global revenues post-launch. The agreement is subject to customary terms and conditions. It will have no impact on AstraZeneca’s 2014 core earnings per share, the London-based company said.