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Eli Lilly Inks Deals, Immuno-Oncology & Diabetes in Focus

Eli Lilly and CompanyLLY expanded its existing immuno-oncology partnership with China-based biotech company, Innovent Biologics, Inc. and acquired worldwide rights to an intranasal glucagon candidate.

Expands Immuno-Oncology Deal with Innovent

Eli Lilly and Innovent will collaborate for the development and commercialization of up to three preclinical anti-PD-1 based bispecific antibodies targeting cancer utilizing an antibody sequence contributed by Innovent. The companies will work together over the next decade both inside and outside China. Per the terms of the original agreement, Eli Lilly will exercise its rights to develop, manufacture and commercialize the cancer treatments outside China. If Eli Lilly opts in for co-development and commercialization, Innovent will get the rights to develop, manufacture and commercialize these cancer treatments in China.

The deal with Innovent could see Eli Lilly shelling out milestone payments that may cross $1 billion depending on the achievement of certain development, regulatory and sales milestones both inside and outside China. In addition, Innovent will be entitled to receive royalties and other payments on sales, if commercialized outside China.

While additional financial terms of the agreement were undisclosed, we remind investors that the deal between the two companies was struck in Mar 2015.

Considering that the incidence of cancer in China is soaring with 2.2 million men and women dying each year of cancer, per information provided by the World Health Organization, we are positive on the deal. The deal would give Eli Lilly the opportunity to tap the Chinese oncology market.

Gains Right to Intranasal Glucagon

Eli Lilly also announced that it has acquired global rights to an intranasal glucagon from Canada-based specialty pharmaceutical company, Locemia Solutions. Currently, the intranasal glucagon is in phase III development for the treatment of insulin-treated diabetics suffering from severe hypoglycemia.

The intranasal glucagon is being developed using a proprietary glucagon nasal powder formulation that is delivered in an emergency situation using a single-use, ready-to-use device. Upon approval, the device could be the first needle-free rescue treatment for severe hypoglycemia.

The financial details of the acquisition were undisclosed. We are positive on the deal, which is in line with Eli Lilly's strategy of strengthening its diabetes portfolio. The company's diabetes portfolio currently consists of Jardiance, Tradjenta and Trulicity among others.

Meanwhile, Eli Lilly continues with its research and development (R&D) expansion plans. In its latest move, the company announced plans to add 30,000 square feet of space and about 50 new jobs at its R&D site in New York, the Alexandria Center for Life Science. The expansion focused on accelerating immuno-oncology drug discovery and strengthening research collaboration, is expected to complete in 2016.

Eli Lilly is a Zacks Rank #2 (Buy) stock. Other favorably ranked stocks in the health care sector include AstraZeneca plc AZN , Apricus Biosciences, Inc. APRI and Alcobra Ltd. ADHD . All three carry a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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