Transition Therapeutics Inc.
) recently licensed exclusive development and commercialization
rights to TT-601, from
Eli Lilly and Company
). TT-601 has been evaluated in preclinical trials. Transition
Therapeutics plans to initiate clinical trials on the candidate
in the first half of 2014. The company will evaluate TT-601 in
patients suffering from osteoarthritis pain, who experienced
insufficient response to non-steroidal anti-inflammatory drugs
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As per the terms of the agreement, Transition Therapeutics will
be obligated to pay a low single-digit royalty to Eli Lilly on
net sales of TT-601. However, post review of proof-of-concept
study data, Eli Lilly has an option to reacquire TT-601 rights.
In case Eli Lilly exercises this option, Transition Therapeutics
will be eligible to receive approximately $130 million in
milestone payments and high single-digit royalty on net sales of
products containing TT-601.
We note that Transition Therapeutics and Eli Lilly are not
strangers to each other. Last month, Transition Therapeutics
announced that Eli Lilly has exercised its option and acquired
all rights related to type II diabetes candidate, TT-401 from
Transition Therapeutics. This triggered a milestone payment of
approximately $7 million from Eli Lilly to Transition
In Mar 2010, Transition Therapeutics had inked a deal with Eli
Lilly and Company, wherein it acquired the rights to several
pre-clinical compounds from Eli Lilly, including TT-401.
Transition Therapeutics, a biopharmaceutical company, carries a
Zacks Rank #3 (Hold). Biopharma stocks that currently look
attractive include companies like
Cadence Pharmaceuticals Inc.
Jazz Pharmaceuticals Public Limited Company
). Both the companies carry a Zacks Rank #1 (Strong Buy).